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Morgan Stanley to price contingent income autocallables with step-down redemption linked to Apple
By Angela McDaniels
Tacoma, Wash., July 16 - Morgan Stanley plans to price contingent income autocallable securities due July 2015 with step-down redemption threshold level feature linked to the common stock of Apple Inc., according to an FWP filing with the Securities and Exchange Commission.
If Apple stock closes at or above the downside threshold level - 75% of the initial share price - on a quarterly determination date, investors will receive a contingent payment of $0.2125 to $0.3125 for each $10.00 note. Otherwise, no contingent payment will be made for that period. The exact contingent payment will be set at pricing.
If the closing share price is greater than or equal to the redemption threshold level on any of the first 11 quarterly determination dates, the notes will be automatically redeemed at par plus the contingent payment. The redemption threshold level is 95% of the initial share price on determination dates one through four, 90% of the initial share price on determination dates five through eight and 85% of the initial share price on determination dates nine through 11.
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 $10.00 divided by the initial share price or, at the issuer's option, a cash amount equal to the value of those shares.
The notes will price and settle in July.
Morgan Stanley & Co. LLC is the agent.
The Cusip number is 61755S461.
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