Tag Archives: morgan stanley

Stacy Summary:  Wow, this is looking like business as usual in the wrong kind of way.  Oh boy, this isn’t going to end well . . .  By the way, check out the cool cartoon / art work created by Dave Miller.  It’s about ‘working for free’ and it’s on our forum board!

• Morgan Stanley plans to turn downgraded loan CDO into AAA bond

Morgan Stanley plans to repackage a downgraded collateralized debt obligation backed by leveraged loans into new securities with AAA ratings in the first transaction of its kind, said two people familiar with the sale.

Morgan Stanley is selling $87.1 million of securities that it expects to receive top AAA ratings and $42.9 million of notes graded Baa2, the second-lowest investment grade by Moody’s Investors Service, according to marketing documents obtained by Bloomberg News. The bonds were created from Greywolf CLO I Ltd., a CDO arranged in January 2007 by Goldman Sachs Group Inc. and managed by Greywolf Capital Management LP, an investment firm based in Purchase, New York.

Two years after the credit markets began to seize up, costing the world’s biggest financial institutions $1.47 trillion in writedowns and losses, banks are again taking so- called structured finance securities and turning them into new debt investments with top credit ratings. While the Morgan Stanley deal is the first to involve CDOs of loans, banks have being doing the same with commercial mortgage-backed securities in recent weeks.