According to Tracy Alloway, of Financial Times fame, James Gorman, Morgan Stanley’s CEO, has been in discussions with Moody’s in an attempt to maintain its credit ratings and stave off a downgrade that could diminish the bank’s ability to buy the rest of Citigroup brokerage Smith Barney, according to people familiar with the matter.
Morgan Stanley owns 51 percent of Smith Barney, and holds an option, which kicks in at the end of May, to increase its stake to 65 percent. Taking full control of the brokerage is a centrepiece of Mr Gorman’s strategy. Morgan Stanley declined to comment.
People familiar with the bank’s thinking have said Morgan Stanley could consider buying all of Smith Barney outright, but its ultimate decision will depend on price. Analysts have valued Citi’s remaining Smith Barney stake at around $10 billion….
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