Morgan Stanley plans contingent income autocallable step-up notes on S&P

By Jennifer Chiou

New York, Sept. 15 – Morgan Stanley plans to price contingent income autocallable step-up securities due October 2029 linked to the S&P 500 index, according to an FWP with the Securities and Exchange Commission.

Each quarter, the notes will pay a contingent coupon if the index closes at or above its coupon barrier level, 75% of its initial index level, on the determination date for that quarter. The contingent coupon rate is 5% per year for the first five years, 7.5% per year for the next five years and 10% per year for the last five years.

Beginning five years after issuance, the notes will be automatically redeemed at par plus the contingent coupon if the index closes at or above the initial level on any quarterly redemption determination date.

If the notes are not called and the index finishes at or above its downside threshold level, 50% of its initial level, the payout at maturity will be par plus the final contingent coupon, if any. If the index finishes below its downside threshold level, investors will be fully exposed to the decline of the worst-performing index from its initial level.

The notes (Cusip: 61761JTH2) will price in September and settle in October.

Morgan Stanley & Co. LLC is the agent.

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