Moody's ups Morgan Stanley, E*Trade

Moody's Investors Service said it upgraded Morgan Stanley's long-term senior unsecured rating to A2 from A3. Moody's also upgraded by one notch the long-term ratings and assessments of Morgan Stanley’s principal U.S. bank subsidiary, Morgan Stanley Bank, NA to Aa3 from A1 and Morgan Stanley Finance LLC to A2.

The rating actions followed MS reporting it completed the acquisition of E*Trade Financial Corp., and concludes the review for upgrade, which began on Feb. 21, after MS announced it intended to acquire E*Trade, Moody’s said.

Moody’s also upgraded E*Trade’s senior unsecured ratings to A3 from Baa2 and withdrew its issuer rating.

“Moody's said the upgrade of E*Trade's senior unsecured notes to A3 from Baa2 reflects the benefits to E*Trade's credit profile from being owned by Morgan Stanley,” the agency said in a press release.

E*Trade’s preferred shares were canceled and new Morgan Stanley preferred shares were issued in exchange.

The outlooks are stable.

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