Morgan Stanley eyes contingent income autocallables on stocks, ETF

By Sarah Lizee

Olympia, Wash., May 28 – Morgan Stanley Finance LLC plans to price contingent income autocallable securities due June 7, 2022 linked to the worst performing of the common stocks of Marathon Petroleum Corp. and Caterpillar Inc., and the iShares PHLX Semiconductor ETF, according to a 424B2 filing with the Securities and Exchange Commission.

The notes are guaranteed by Morgan Stanley.

If each asset closes at or above its downside threshold level, 50% of its initial share price, on a quarterly observation date, the notes will pay a contingent payment that quarter at an annualized rate of 11.75%.

After one year the notes will be called at par plus the contingent coupon if each asset closes at or above its initial share price on any quarterly determination date.

If each asset’s final share price is greater than or equal to its 50% downside threshold level, the payout at maturity will be par plus the final contingent coupon. Otherwise, investors will lose 1% for every 1% that the lesser-performing asset declines from its initial share price.

Morgan Stanley & Co. LLC is the agent.

The notes will price on May 30.

The Cusip number is 61769HCZ6.

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