Commodity House of the Year, 2010

Winner: Morgan Stanley

Today, Morgan Stanley Commodities is a global team comprising over 400 professionals from over 40 countries ... including traders, originators, salespeople, quantitative analysts, traffic support, analysts and principal investment personnel, spread around the globe.

Morgan Stanley’s expertise in the paper business has evolved alongside its physical business since its inception in the early 1980s into a derivative and physical trading platform which provides the duality of offering a total physical and derivative risk management solution to clients. Their presence in the entire commodity supply chain allows them to speak credibly on real-time demand and supply flows occurring in the market, having made a number of strategic acquisitions /participations in the energy sector particularly.

Their offering has expanded to include coal, LNG, dry freight and emissions, developing into an all-round commodity house. Morgan Stanley is also one of the main players in financially-settled forward freight agreements (FFA) associated with all major vessel grades quoted on the Baltic Exchange in London. Morgan Stanley actively trades emissions such as CER’s in the U.N. sponsored CDM scheme and EUA’s in the European Emissions Trading Scheme

In the last year Morgan Stanley have had several stellar achievements and initiatives. On October 8th 2009 Morgan Stanley and BTMU closed a $900MM pre-export credit facility for Petroleum Export Limited III. This was the first Morgan Stanley-led deal in the pre-export finance bank market. It completes $1.4bn of financing for EGPC over the preceding 4 months led by Morgan Stanley.

The successful execution demonstrated Morgan Stanley’s cross-divisional capabilities. The Project and Structured Finance Group structured and syndicated the transaction while Morgan Stanley Commodities structured and executed the physical off-take and commodity price hedge. Additionally Morgan Stanley ran the credit auction for the interest rate swap syndication process in order to ensure the best terms for the borrower. This transaction is one of the few pre-export finance transactions closed in 2009 of any significant size. It signalled a marked improvement in the international lending market gathering strong support form the international and domestic bank lending community.

In January this year Morgan Stanley traded the first ever container freight derivative with Bocimar/Delphis. And in the second week of March 2010 Morgan Stanley traded the first derivative (Forward Freight Agreement) linked to shipping iron ore from India to China – a key trading route.

Finally, using insights from the Morgan Stanley Research and trading teams they have created a number of compelling structures over the past year. These include their offering of commodity contingent equity, interest rate and foreign exchange hedges.

In the last year, Morgan Stanley have had several stellar achievements. Voters in this category were also suitably impressed making Morgan Stanley this year’s winner of the coveted Commodity House of the Year Award.

The Award for Commodity House of the Year was presented to Steve Jones, Managing Director with Morgan Stanley by Gyles Brandreth, celebrated British author, broadcaster, actor and former Conservative Member of Parliament.