We advised Morgan Stanley on its investment-grade global offering of fixed-to-floating-rate notes

Davis Polk advised Morgan Stanley in connection with its SEC-registered global offering of £1.25 billion aggregate principal amount of fixed-to-floating-rate senior notes due 2033. This is one of the first SEC-registered offering of notes based on the Sterling Overnight Index Average rate (SONIA). SONIA is the Working Group on Sterling Risk Free Reference Rates’ preferred benchmark for the transition to sterling risk-free rates from LIBOR. During the floating rate period, the notes bear interest by reference to SONIA, compounded daily over a backward-shifted observation period in respect of each quarterly interest payment period. The SONIA compounding mechanics are based on those used in many SOFR offerings.

The Davis Polk corporate team included partner Christopher S. Schell and counsel Vidal Vanhoof. The tax team included partner Lucy W. Farr, counsel David S. Fisher and associate Lucy Mo. Partner Gregory S. Rowland, counsel Sarah E. Kim and associate Leon E. Salkin provided 1940 Act advice. All members of the Davis Polk team are based in the New York office.