By E. Janene Geiss
Philadelphia, July 27 - Morgan Stanley priced $28.75 million of contingent income autocallable securities due July 25, 2012 linked to the common stock of Caterpillar Inc., according to a 424B filing with the Securities and Exchange Commission.
If Caterpillar stock closes above the downside threshold level - 80% of the initial share price - on a quarterly determination date, investors will receive a contingent payment of 2.625%, or $0.2625 for each $10.00 note. Otherwise, no contingent payment will be made for that period.
If the closing share price is greater than the initial share price on any of the quarterly determination dates, the notes will be automatically redeemed at par plus the contingent payment.
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 Caterpillar 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. Inc. is the agent.
| Issuer: | Morgan Stanley
|
| Issue: | Contingent income autocallable securities
|
| Underlying stock: | Caterpillar Inc. (NYSE: CAT)
|
| Amount: | $28.75 million
|
| Maturity: | July 25, 2012
|
| Coupon: | If stock closes above threshold level on quarterly determination date, 2.625% for that quarter; otherwise, no coupon for that quarter
|
| Price: | Par of $10
|
| Payout at maturity: | If final share price is greater than or equal to threshold level, par plus 2.625%; otherwise, number of Caterpillar shares equal to par divided by initial share price or, at Morgan Stanley's option, equivalent cash amount of those shares
|
| Call: | Automatically at par plus contingent coupon if closing share price greater than initial share price on quarterly determination dates through July 20, 2012
|
| Initial price: | $105.66
|
| Threshold level: | $84.528, 80% of initial share price
|
| Pricing date: | July 25
|
| Settlement date: | July 28
|
| Agent: | Morgan Stanley & Co. LLC
|
| Fees: | 1.5%
|
| Cusip: | 61760E465
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