Davis Polk Advises Morgan Stanley on Its $2 Billion Offering of Fixed-to-Floating-Rate Senior Notes Based on the Secured Overnight Financing Rate

Davis Polk advised Morgan Stanley in connection with its SEC-registered global offering of $2 billion aggregate principal amount of fixed-to-floating-rate senior notes due 2025. During the floating interest rate period, the notes bear interest by reference to the Secured Overnight Financing Rate (“SOFR”), compounded daily over each quarterly interest payment period. The SOFR compounding mechanics are based on those published by ISDA, while the waterfall of benchmark replacements and related adjustments that would apply upon a discontinuation of SOFR are based on the Alternative Reference Rates Committee’s recommended fallback language. The lead manager for the underwriters was Morgan Stanley & Co. LLC.

The Davis Polk corporate team included partner Christopher S. Schell, counsel Vidal Vanhoof and associate Jack A. Liechtung. The tax team included partner Po Sit, counsel Alon Gurfinkel and associates Andrew A. Smith and Sunny Kim. Partner Gregory S. Rowland, counsel Sarah E. Kim and associate Sijia Cai provided 1940 Act advice. Members of the Davis Polk team are based in the New York and London offices.