New Issue: Morgan Stanley prices $53.28 million contingent income autocallables tied to Apple

By Marisa Wong

Madison, Wis., Oct. 25 - Morgan Stanley priced $53.28 million of contingent income autocallable securities due Oct. 26, 2015 linked to the common stock of Apple Inc., according to a 424B2 filing with the Securities and Exchange Commission.

If Apple stock closes above the downside threshold level - 75% of the initial share price - on a quarterly determination date, investors will receive a contingent payment of $0.37 for each $10.00 note. Otherwise, no contingent payment will be made for that period.

If the stock closes at or above the redemption threshold level on any of the first 11 quarterly determination dates, the notes will be redeemed at par plus the contingent payment. The threshold will be 105% of the initial price for the first four determination dates, stepping up to 110% of the initial price for the next four dates and to 115% of the initial price after that.

If the notes are not called and the final share price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the contingent payment. If the final share price is less than the downside threshold level, the payout will be a number of Apple shares equal to the principal amount of notes divided by the initial share price or, at Morgan Stanley's option, the cash value of those shares.

Morgan Stanley & Co. LLC is the agent.

Issuer:	Morgan Stanley
Issue:	Contingent income autocallable securities
Underlying stock:	Apple Inc. (Nasdaq: AAPL)
Amount:	$53,284,860
Maturity:	Oct. 26, 2015
Coupon:	3.7% if closing price is at least 75% of initial price on quarterly determination date; otherwise, none
Price:	Par
Payout at maturity:	If final share price is at least 75% of initial, par plus contingent quarterly payment; otherwise, 0.01630 Apple shares, or, at Morgan Stanley's option, equivalent cash amount of those shares
Call option:	Par plus contingent payment if closing share price is greater than redemption threshold on first 11 quarterly determination dates
Initial price:	$613.39
Downside threshold:	$460.0425, 75% of initial share price
Redemption threshold:	$644.0595, 105% of initial price, for first four determination dates; $674.729, 110% of initial price, for next four dates; after that, $705.3985, 115% of initial price
Pricing date:	Oct. 23
Settlement date:	Oct. 26
Agent:	Morgan Stanley & Co. LLC
Fees:	2.25%
Cusip:	61755S792

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