Morgan Stanley 2014 Annual Report Download - page 107

Senior Indebtedness.
At December 31, 2014 and December 31, 2013, the aggregate outstanding carrying amount of the Company’s
senior indebtedness (including guaranteed obligations of the indebtedness of subsidiaries) was approximately
$142 billion and $143 billion, respectively.
Long-Term Borrowings.
The Company believes that accessing debt investors through multiple distribution channels helps provide
consistent access to the unsecured markets. In addition, the issuance of long-term debt allows the Company to
reduce reliance on short-term credit sensitive instruments (e.g., commercial paper and other unsecured short-term
borrowings). Long-term borrowings are generally managed to achieve staggered maturities, thereby mitigating
refinancing risk, and to maximize investor diversification through sales to global institutional and retail clients
across regions, currencies and product types. Availability and cost of financing to the Company can vary
depending on market conditions, the volume of certain trading and lending activities, the Company’s credit
ratings and the overall availability of credit.
The Company may engage in various transactions in the credit markets (including, for example, debt retirements)
that it believes are in the best interests of the Company and its investors.
Long-term borrowings by maturity profile at December 31, 2014 consisted of the following:
Parent Subsidiaries Total
(dollars in millions)
Due in 2015 ........................................ $ 17,781 $2,959 $ 20,740
Due in 2016 ........................................ 18,963 1,680 20,643
Due in 2017 ........................................ 22,643 1,357 24,000
Due in 2018 ........................................ 16,728 951 17,679
Due in 2019 ........................................ 16,660 911 17,571
Thereafter .......................................... 50,292 1,847 52,139
Total .......................................... $143,067 $9,705 $152,772
Long-Term Borrowing Activity in 2014.
During 2014, the Company issued and reissued notes with a principal amount of approximately $36.7 billion. In
connection with these note issuances, the Company generally enters into certain transactions to obtain floating
interest rates. The weighted average maturity of the Company’s long-term borrowings, based upon stated
maturity dates, was approximately 5.9 years at December 31, 2014. During 2014, approximately $33.1 billion in
aggregate long-term borrowings matured or were retired. Subsequent to December 31, 2014 and through
January 31, 2015, the Company’s long-term borrowings (net of repayments) increased by approximately
$5.4 billion. This amount includes the Company’s issuance of $5.5 billion in senior debt on January 27, 2015 and
the issuance of $1.7 billion in senior debt on January 30, 2015. For a further discussion of the Company’s long-
term borrowings see Note 11 to the Company’s consolidated financial statements in Item 8.
Credit Ratings.
The Company relies on external sources to finance a significant portion of its day-to-day operations. The cost and
availability of financing generally are impacted by, among other variables, the Company’s credit ratings. In
addition, the Company’s credit ratings can have an impact on certain trading revenues, particularly in those
businesses where longer-term counterparty performance is a key consideration, such as OTC derivative
transactions, including credit derivatives and interest rate swaps. Rating agencies consider company-specific
factors; other industry factors such as regulatory or legislative changes; the macroeconomic environment; and
perceived levels of government support, among other things.
103