Morgan Stanley mulls bond issue amid turbulence

MORGAN Stanley is considering raising $5bn (£3.25bn) from a Japanese bond sale as concern grows over its exposure to the Eurozone.

Yesterday it filed a shelf registration at Japan’s finance ministry, which would allow it to sell bonds to investors. Sources indicated Morgan Stanley could launch a uridashi bond but an issue would not take place immediately.

The bank, which took a US Federal Reserve loan at the height of the 2008 crisis, has recently faced rumours about its investments in French banks. However it has a net exposure of zero, City A.M. understands.

Morgan Stanley received a boost from one major investor yesterday when Mitsubishi UFJ Financial Group gave its backing to the bank.

In a statement it said: “In response to recent market volatility MUFG wishes to reiterate that we are firmly committed to our long-term strategic alliance with Morgan Stanley. The special relationship we have formed remains core to our global business strategy.”

Shares in Morgan Stanley closed up 12 per cent last night, but its shares are still off 48.5 per cent this year.

Separately Greg Fleming, the head of its wealth management arm, told a Reuters summit that achieving a 20 per cent pre-tax operating margin depends mainly on market conditions. The brokerage aims to achieve margins in the mid-teens over the next six to eight quarters, he said.