The Leveraged Loan by Morgan Stanley to CF Industries says buy Morgan and Sell Terra
The prior weekend, it was announced that Morgan Stanley (MS) had agreed to provide CF Industries (CF) with $2.5B in financing for the potential takeover of Terra Industries (TRA). Considering that we've been bullish on this deal and negative on MS for not being more aggressive in lending, this appears to be a game changer in both ways. Also, Bloomberg reported that this $2.5B deal is the largest leveraged lender commitment this year. It should provide plenty of fees for MS and signals a turn in MS that we find appealing. Especially considering they have chosen a very juicy sector to start loading up on. Even though the deal possibly won't go through as the drama in the numerous deals in the fertilizer sector continue to unfold. Morgan Stanley’s outstanding loans and lending commitments to non-investment grade companies peaked at $43 billion as of Aug. 31, 2007, before shrinking to $18.5 billion as of Sept. 30 of this year, according to the firm’s quarterly financial statement...