Morgan Stanley 1998 Annual Report Download - page 63

Under the terms of the MSDW Facility, the banks are committed to
provide up to $6.0 billion. The MSDW Facility contains restrictive
covenants which require, among other things, that the Company main-
tain shareholders’ equity of at least $9.1 billion at all times. The
Company believes that the covenant restrictions will not impair the
Company’s ability to pay its current level of dividends. At November
30, 1998, no borrowings were outstanding under the MSDW Facility.
Riverwoods Funding Corporation (“RFC”), an entity
included in the consolidated financial statements of the Company,
maintains a senior bank credit facility to support the issuance of
asset-backed commercial paper in the amount of $2.6 billion.
Under the terms of the asset-backed commercial paper program, cer-
tain assets of RFC were subject to a lien in the amount of $2.6 bil-
lion at November 30, 1998. RFC has never borrowed from its senior
bank credit facility.
The Company maintains a master collateral facility that
enables MS&Co. to pledge certain collateral to secure loan arrange-
ments, letters of credit and other financial accommodations (the
“MS&Co. Facility”). As part of the MS&Co. Facility, MS&Co. also
maintains a secured committed credit agreement with a group of
banks that are parties to the master collateral facility under which
such banks are committed to provide up to $1.875 billion. The credit
agreement contains restrictive covenants which require, among
other things, that MS&Co. maintain specified levels of consolidated
shareholders’ equity and Net Capital, as defined. In January 1999,
the MS&Co. Facility was renewed. At November 30, 1998, no bor-
rowings were outstanding under the MS&Co. Facility.
The Company also maintains a revolving committed
financing facility that enables MSIL to secure committed funding from
a syndicate of banks by providing a broad range of collateral under
repurchase agreements (the “MSIL Facility”). Such banks are com-
mitted to provide up to an aggregate of $1.85 billion available in 12
major currencies and, effective January 1, 1999, the euro. The facil-
ity agreements contain restrictive covenants which require, among other
things, that MSIL maintain specified levels of Shareholders’ Equity
and Financial Resources, each as defined. At November 30, 1998,
no borrowings were outstanding under the MSIL Facility.
The Company anticipates that it will utilize the MSDW
Facility, the MS&Co. Facility or the MSIL Facility for short-term fund-
ing from time to time.
*SIXTY
-SEVEN *
MORGAN STANLEY DEAN WITTER *1998 ANNUAL REPORT
LONG-TERM BORROWINGS
MATURITIES AND TERMS
Long-term borrowings at fiscal year-end consist of the following:
U.S. DOLLAR NON-U.S. DOLLAR(1) AT NOVEMBER 30
Index/
Fixed Floating Floating Fixed Floating 1998 1997
(dollars in millions) Rate Rate(2) Linked Rate Rate(2) TOTAL Total
Due in fiscal 1998 $ — $ — $ — $ — $ — $ — $ 6,170
Due in fiscal 1999 842 2,627 587 208 767 5,031 4,693
Due in fiscal 2000 1,568 4,396 347 62 490 6,863 2,418
Due in fiscal 2001 1,496 1,596 88 115 604 3,899 2,282
Due in fiscal 2002 1,077 1,033 42 17 332 2,501 2,623
Due in fiscal 2003 1,093 1,034 105 428 235 2,895 1,621
Thereafter 4,460 899 217 642 28 6,246 4,985
Total $10,536 $11,585 $1,386 $1,472 $2,456 $27,435 $24,792
Weighted average
coupon at fiscal
year-end 7.4% 5.7% n/a 5.4% 4.9% 6.1% 6.1%
(1) Weighted average coupon was calculated utilizing non-U.S. dollar interest rates.
(2) U.S. dollar contractual floating rate borrowings bear interest based on a variety of money market indices, including London Interbank Offered Rates (“LIBOR”) and Federal Funds rates.
Non-U.S. dollar contractual floating rate borrowings bear interest based on Euro floating rates.
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