Banks
Morgan Stanley Hit by Moody's Review
06/27/08 - 04:55 PM EDT
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Updated from 2:31 p.m. EDT Moody's Investors Service has placed Morgan StanleyMS on review for a possible downgrade, the ratings agency said Friday. "Since the onset of the credit crisis one year ago, Morgan Stanley's financial performance and risk management has been inconsistent, and below the levels expected of a Aa3-rated financial institution," Moody's analysts Robert Young and Peter Nerby said a press release. The review will look at, "Morgan Stanley's ability to control risk and generate higher levels of profitability over the next one to two years," the release said. The ratings agency said "the more likely" result of its review would be a downgrade of Morgan Stanley's long-term debt to A1. A Morgan Stanley spokesman declined to comment. A call to Moody's was not immediately returned. The downgrade comes at the end of a week in which financial stocks were rocked by grim outlooks from analysts. Goldman Sachs on Thursday predicted fresh writedowns at CitigroupC and Merrill LynchMER and a Lehman Brothers analyst on Friday lowered his estimates for Merrill. Shares of Morgan Stanley closed down fractionally to $36.71.
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