Morgan Stanley raising its common equity by $2.2 billion

Morgan Stanley, global financial services firm and a market leader in securities, asset management and credit services, declared on Tuesday about its plans to raise $2.2 billion in its common equity in order to be closer to repaying its TARP loans. 

As bank holding company said by selling shares it would be easier to satisfy the criteria for repaying the $10 billion it borrowed under the U.S. Treasury's Troubled Asset Relief Program. As he added, some of the shares would be purchased by Morgan Stanley shareholders China investment Corp, which would buy 44.7 million shares of common stock at the public offering price, and Mitsubishi UFJ Financial Group Inc, which in its turn would purchase 16 million shares.

Although approval to pay back TARP loans hasn’t yet been received, Morgan Stanley is planning to repay it this month. A day earlier, JPMorgan Chase and American Express Co also announced about their intension to sell common stock in order to be able for debt repayment.

According to the Federal Reserves announcement on Monday the names of lenders, which would be allowed to repay their loans, will be known next week. One condition for repayment is that the banks are able to raise money in the public equity markets. 

There are 19 lenders that underwent "stress tests". Morgan Stanley was required under the stress test to raise $1.8 billion. Last month it sold $4.6 billion in stock and $4 billion in debt.