Davis Polk advised Morgan Stanley in connection with its SEC-registered global offering of $750 million aggregate principal amount of floating-rate senior notes due 2022. This is the first SEC-registered offering of notes based on the Secured Overnight Financing Rate (“SOFR”) by a U.S. G-SIB ahead of the expected discontinuation of LIBOR at the end of 2021. The notes bear interest by reference to SOFR, compounded daily over each quarterly interest payment period. The SOFR compounding mechanics are based on those published by ISDA, while the waterfall of benchmark replacements and related adjustments that would apply upon a discontinuation of SOFR are based on the Alternative Reference Rates Committee’s recommended fallback language.

The Davis Polk corporate team included partner Christopher S. Schell, counsel Vidal Vanhoof and associates Jeremy Larkins and Jack A. Liechtung. The tax team included partners Po Sit and Rachel D. Kleinberg, counsel Alon Gurfinkel and associate Andrew A. Smith. Partner Gregory S. Rowland and counsel Sarah E. Kim provided 1940 Act advice. Members of the Davis Polk team are based in the New York, Northern California and London offices.

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