Morgan Stanley has sold an innovative €256.8m ($227.9m) equity-linked bond for Parmalat, the Italian food company, which is the first time that a European corporate has issued convertible preferred stock.

The US bank has named the structure Clocs, which stands for convertible long-dated capital securities. The issue has a 30-year maturity, is subordinated and has an interest deferral clause, which means that if the company chooses not to pay interest on the bond it cannot pay dividends on its shares. Convertibles are usually given the status of debt by the ratings agencies but in this case the agencies have indicated that it will generate an equity credit.