Morgan Stanley, which won clearance last week to repay $10 billion to the Treasury Department, said Tuesday that it also will cease issuing new debt that carries a guarantee from the Federal Deposit Insurance Corp.
"Morgan Stanley does not plan nor expect to issue any more debt under the FDIC-guaranteed debt program," said Mark Lake, a spokesman for the New York firm.
The FDIC guarantees, which became available in November as part of the government's effort to prop up the financial system, enabled companies such as Morgan Stanley to sell triple-A-rated bonds at a lower interest rate than investors would have demanded otherwise. Morgan Stanley has issued about $24 billion of debt under the Temporary Liquidity Guarantee Program since Nov. 26, according to data compiled by Bloomberg.
JPMorgan Chase & Co. also won clearance last week to repay the Treasury, and it too will stop issuing new FDIC-guaranteed debt, Michael Cavanagh, its chief financial officer, said in an interview on CNBC last week.