Americas Loan House: Morgan Stanley

IFR Review of the Year 2017
4 min read
Michelle Sierra

Full spectrum

Being the bank of choice when it comes to funding companies in every ratings bracket comes with hard work, consistency and expertise. For delivering tailored financings and leading game-changing transactions with a seamless approach to the M&A and financing process, Morgan Stanley is IFR’s Americas Loan House of the Year.

2017 was Morgan Stanley’s year. The bank not only worked on some of the most transformative transactions in the leveraged and investment-grade markets, but also showed that it has become the go-to firm for issuers looking for smooth integration between advisory and funding.

“It takes time to build the reputation, build the credibility with clients, with banking teams, to make sure you have all the right pieces in the right place at the right time to end up with really good outcomes,” said Dan Toscano, global head of leveraged finance at Morgan Stanley. “This year really embodies what we’re capable of doing.”

Whether in investment-grade or leveraged lending, the bank’s success comes from coordinating its M&A capabilities and financing firepower.

“The intersection of our M&A franchise and our financing capabilities has never been better,” Toscano said. “We finally have got all the pieces of the puzzle put together in a way that just flows on a daily basis.”

Morgan Stanley made an important push on the investment-grade side, moving to seventh from 13th place in 2016 with US$21.4bn in volume. The firm led important transactions such as a US$6.5bn bridge loan for United Technologies’ acquisition of Rockwell Collins, a US$7.12bn loan package for Sempra Energy’s acquisition of Energy Future Holdings, and a US$5.8bn loan package for Tyson Foods’ acquisition of AdvancePierre Foods.

“I don’t think you can point to a firm that has as broad a business as we do and has touched on each of the really important pockets of the market,” said Anish Shah, global head of investment-grade acquisition finance at the bank.

“In the spectrum of investment-grade event financings all the way down to sponsor-driven leveraged buyouts, we really led across the board.”

One investment-grade trade that stood out was the financing that backed Crown Castle International’s purchase of privately held Lightower Fiber Networks for about US$7.1bn in cash in July.

Morgan Stanley was lead-left on the US$11.3bn committed financing package, which is IFR’s North America Loan of the Year. The deal backed the acquisition that allowed the telecoms tower operator to expand its fibre-optic footprint in urban areas of the US north-east.

The financing put the company in a uniquely strong position to win a competitive M&A process. It was the third-largest bridge-to equity financing ever executed. Morgan Stanley navigated a necessary amendment to Crown Castle’s existing credit facilities and covenant issues with existing loans, which required a unique backstop structure.

“We look at everything together. There is no wall across investment-grade and non-investment-grade,” Shah said.

On the non-investment-grade side, the bank was consistent and dependable and issuers kept coming back for more.

“Our goal is to be predictable to our clients,” Toscano said.

Morgan Stanley was lead-left on a US$5.5bn Term Loan B for aircraft leasing business Avolon, which was the largest Term Loan B issued since 2015, and among the top 10 largest Term Loan Bs issued since 2008. The deal backed Avolon’s US$10.4bn purchase of CIT Group’s aircraft leasing business.

Morgan Stanley was also lead-left arranger and joint bookrunner on Misys’ US$6.15bn credit facility backing the acquisition of DH Corp and refinancing existing debt at both Misys and DH.

The bank coordinated the entire financing process: it was lead-left on the US dollar first-lien facility, the lead-left M&A adviser and reopened the jumbo LBO loan market with the largest LBO/M&A loan financing package for a Single B borrower since 2014.

It was a highly complex cross-border financing that reintroduced Misys to the capital markets after a failed IPO and also opportunistically substituted a second-lien structure for a bond and holding company structure to increase prepayment flexibility.

The 6.2 times total-leverage profile and B3 ratings greatly increased the difficulty of the execution.

To see the digital version of this review, please click here.

To purchase printed copies or a PDF of this review, please email

Americas Loan House: Morgan Stanley