Morgan and Wells Successfully Raise Cash

Morgan Stanley (MS) successfully priced a public offering of 146m shares of common stock, at $24 per share, in the rush to raise capital following government stress testing. And, the NYC firm is not alone, as Wells Fargo (WFC) offered shares, in oversubscribed trading, that saw 1.25bn of common stock go for $7.5bn, or $22 per share. The Morgan Stanley total gross brought in proceeds of approximately $3.5bn, nearly double it initial hopes to raise $2bn. The underwriters in the deal may also exercise a 30-day option to purchase up to an additional 21.9m shares of common stock from the financial services firm. Market commentary this morning on Bloomberg news haled the success of the trading as a sign that confidence in the market is returning. They also downplayed the below-par pricing of the shares. For Morgan, the share offering represents only one means of raising capital. The firm also today priced a public offering of $4bn in aggregate principal amount of senior notes, despite lacking an FDIC guarantee. The Wells stock is only about half the capital the firm needs to raise to satisfy the government stress tests. Bank of America (BAC) announced yesterday the Federal Reserve notified it of its need to increase Tier 1 common capital by $33.9bn in order to weather two years of the most severe economic circumstances. Write to Jacob Gaffney.