Morgan Stanley Blows another $5.7 billion
Wow. Only $5.7 billion worse than you thought a few weeks back, guys? Begging for moolah from the Chinese? Nice.
Oh, and watch the misdirect here. These are "equity units." Nice! Equity! That's cheap financing, right? Or wait...
Each Equity Unit is mandatorily convertible into Morgan Stanley shares at prices between a reference price and a threshold price at a premium of 20 percent to the reference price. The reference price will be determined the week of December 17, 2007. The Equity Units convert to Morgan Stanley common shares on August 17, 2010, subject to adjustment of the stock purchase date. Each Equity Unit will pay a fixed annual payment rate of 9 percent, payable quarterly.
Equity? Debt? What's the difference?