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Morgan Stanley Weighs Derivative Options As It Awaits Moody’s Action


 

NEW YORK (Dow Jones)–As a potential credit-rating downgrade draws closer, Morgan Stanley (MS) Chairman and Chief Executive James Gorman may have a few cards up his sleeve, but Wall Street isn’t sure if it’s a good hand.

The securities firm may need to post $9.6 billion in additional collateral to counterparties and certain exchanges if two ratings firms were to cut its long term credit rating by three levels. Moody’s Investors Service is weighing such an action, which would drop Morgan Stanley from A2 to Baa2–a decision that is expected by June.

Headlines:

  1. JPMorgan Loses $2 Billion as ‘Mistakes’ Trounce Hedges
  2. Morgan Stanley Weighs Derivative Options As It Awaits Moody’s Action
  3. Postal Service loses $3.2 billion, will skip health payment
  4. NY Rockland County credit cut 3 notches to Baa3-Moody’s
  5. Spain set to miss deficit target
  6. States Borrow to Cover Pension Fund Shortfalls
  7. Metrolink may raise fares up to 9 percent (California)
  8. Banks prepare for the return of the drachma

 

– Sax

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