Morning Coffee: The Morgan Stanley banking MD due the biggest bonus this year. How to tell if JPMorgan might be spying on you

If Morgan Stanley likes you, it will pay you very well. Witness Michael Grimes, the very-darling technology banker there, who was paid a $10.5m annual salary and $56m of deferred bonuses over three years before he left for government in 2025, and who then received an undisclosed inducement to return to Morgan Stanley earlier this year. 

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Despite seemingly being beaten to pole position on the SpaceX IPO, Morgan Stanley will probably renumerate Grimes very well for 2026. But it may not remunerate him the best of all. In banking, at least, that distinction could go to the lesser known figure of William Graham, co-head of leveraged finance. 

Unlike Grimes, who is particularly famed for his past moonlighting as an Uber driver to win Uber as a client, little can be said about Graham. He's been at Morgan Stanley for 21 years and was at Citi before that. Someone of his name was made managing director (MD) at the bank in 2008.

It's only recently, though, that Graham seems to have committed an incontravertible act of self-differentiation. The Financial Times reports that he's invented a new "template" for financing AI infrastructure deals and that this template has enabled Morgan Stanley to lead the AI infrastructure financing boom. In this way, the bank increased the fees it earned from capital markets financing deals from $1.3bn to $2.4bn in the first half of this year. 

The Graham template involves a "lockbox" that ringfences payments on a lease and sends them directly to bond investors. The lockbox is then "wrapped" or guaranteed by a third party, so that if the lease payments don't happen, the third party pays them anyway. 

Graham's structure was in action when data centre developer TeraWulf raised $3.2bn in a bond sale last October. Anthropic and Fluidstack (a cloud provider) make lease payments to TeraWulf. These lease payments go into a lockbox and pay for a 7.75% coupon on the bond. The lockbox is guaranteed by Google, which pays the coupon if the lease money stops flowing. Without Google's wrapping, the FT notes that the bond would likely have required double digit coupon payments given that TeraWulf doesn't actually have much in the way of revenues. 

TeraWulf's bond issue was last October, but the FT says Graham's template has been repeated many times since and has been used to finance all sorts of related deals in the AI zone. The only danger, for Graham and for Morgan Stanley, is that the revenues at TeraWulf and elsewhere don't increase ten times as expected in the next three years, in which case Graham may find himself lambasted instead of feted for enabling the financing. For the moment, though, his 2026 bonus could be large indeed. 

Separately, a former chief operating officer at JPMorgan is subject to accusations of spying on employees. 

The COO in question left JPMorgan long ago in 2013, but the Wall Street Journal says he's now accused of accessing internal communications while he worked there, both to keep a 'tight rein on employees' and to 'undermine' his rivals. He absolutely refutes this. His lawyer told the WSJ he "never directed anyone to look through any employee’s or executive’s communications or engaged in any form of surveillance.”

The COO's accusers claim they unearthed the snooping by placing a code phrase in an email, which the COO then repeated back to them. He denies this too, but it sounds like a fine strategy if you think someone might be illicitly reading your emails, either at JPMorgan or somewhere else. 

Meanwhile...

Carsten Stoehr from Credit Suisse is now APAC deputy head at SMBC. He is pushing the bank towards riskier, higher-yielding structured credit deals and has hired new people from UBS Group AG and Morgan Stanley. Since he arrived in 2024, more than two dozen employees have departed, including roughly a third of the loan capital markets department. (Bloomberg) 

Jamie Dimon is warning about a new bank surcharge in the UK. “If you have a uncompetitive tax system, capital leaves your country.” A bank tax “may sound great,” but such policies “have adverse consequences.” (Bloomberg) 

Qualities required of the CEO of JPMorgan, as described by Jamie Dimon: “You want to be good at management, you want to be good at people, you want to be analytical, you want to be detailed, you want to be a culture carrier, you want to be curious, you want to have heart, you want to have grit, you want to have soul, you want to have work ethic, you want to be able to travel, you want to be able to walk in operating centers and deal with CEOs and prime ministers. It’s all of that.” (Net Interest) 

Apollo Global Management, Elliott Management, Farallon Capital Management and Silver Point Capital are among the 100 institutional investors in London & Valley Water (L&VW), which holds £17bn of Thames Water's £21bn debt. (The Guardian) 

Apollo, Blackstone and Brookfield plan to take over up to £500bn in British pension liabilities over the next decade. They appear to have invested more than 10% of their portfolios in private loans issued to things like data centres. (Financial Times) 

A 31 year old tech worker in San Francisco who earns $550k in combination with her husband, was asked by the husband to take on all parenting responsibilities for a few months so that he could become "AI native." He spent days, nights and weekends, locked in his office toiling away on AI projects. But her husband eventually thanked her: He was now the top user of AI in his company. (Washington Post) 

If you pay Donald Trump $100k you can receive privileged access to his Tweets on his "Truth API." (Financial Times) 

It's now more expensive to live in Miami than New York City. (Bloomberg) 

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