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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (140576)	8/11/2008 9:15:50 PM
From: DebtBomb	Respond to of 306849

Morgan Stanley Rating Cut by Moody's on Risk Controls (Update2) By Yalman Onaran Aug. 11 (Bloomberg) -- Morgan Stanley had its long-term credit rating lowered by Moody's Investors Service, which cited the second-biggest U.S. securities firm's failed risk-management practices. Morgan Stanley's debt was downgraded one level to A1 from Aa3, Moody's said in a statement today. Both firms are based in New York. A1 is the fifth-highest investment-grade rating. ``Performance of the company over the past year has shown that the risk controls haven't worked,'' said Peter Nerby, an analyst at Moody's. ``The firm has said it's making changes to the risk management systems.'' Morgan Stanley lost its AA rating from Standard & Poor's on June 2, when the credit rating was reduced by one level to A+. Morgan Stanley is still ranked one grade above Merrill Lynch & Co. and Lehman Brothers Holdings Inc., which had their ratings cut in recent months due to mortgage-market writedowns. Morgan Stanley has recorded $14.4 billion of writedowns on its mortgage-related portfolio since the third quarter of last year. Merrill's writedowns have exceeded $46 billion. Moody's said Morgan Stanley's rating would be cut further if the firm lost an additional $7 billion on its mortgage assets. Following the downgrade today, credit-default swaps tied to Morgan Stanley climbed 7 basis points to 210 basis points as of 4:26 p.m. in New York, according to broker Phoenix Partners Group. The company's shares fell as much as 2.4 percent to $44.32 in after-hours trading. bloomberg.com