Morgan Stanley plans contingent income autocallables linked to Apple

By Angela McDaniels

Tacoma, Wash., July 17 – Morgan Stanley plans to price contingent income autocallable securities with step-up redemption threshold level feature due July 27, 2018 linked to the common stock of Apple Inc., according to an FWP filing with the Securities and Exchange Commission.

Each quarter, the notes will pay a contingent coupon at an annualized rate of 8.5% if Apple shares close at or above the downside threshold level, 80% of the initial share price, on the determination date for that quarter.

The notes will be called at par of $10 plus the contingent coupon if Apple shares close at or above the redemption threshold level price on any quarterly determination date other than the final determination date. The redemption threshold level is 105% of the initial share price for determination dates one through four, 110% of the initial share price for determination dates five through eight and 115% of the initial share price for determination dates nine through 11.

If the final share price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the final contingent coupon. Otherwise, investors will receive a number of Apple shares equal to $10 divided by the initial share price or, at the issuer’s option, a cash amount equal to the value of those shares.

Morgan Stanley & Co. LLC is the agent.

The notes are expected to price July 24 and settle July 29.

The Cusip number is 61765G648.

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