Published on 2/2/2017 in the Prospect News Structured Products Daily.
New Issue: Morgan Stanley sells $3.94 million worst-of autocallable RevCons on three stocks
By Wendy Van Sickle
Columbus, Ohio, Feb. 2 – Morgan Stanley priced $3.94 million of 7% worst-of fixed coupon autocallable RevCons due Aug. 1, 2018 linked to the worst performing of the shares of Berkshire Hathaway Inc., Tesla Motors, Inc. and Alphabet Inc., according to a 424B2 filing with the Securities and Exchange Commission.
Interest is payable monthly.
If each stock closes at or above its redemption threshold level, 95% of the initial price initially, stepping down to 90% in July and to 85% in February 2018, on a monthly determination date after three months, the notes will be automatically called at par plus the coupon.
If each stock finishes at or above the 50% downside threshold level, the payout at maturity will be par plus the final coupon. Otherwise, investors will receive a number of shares of the worst performing stock equal to $1,000 divided by the initial price of that stock or, at the issuer’s option, the cash value of those shares.
Morgan Stanley & Co. LLC is the agent.
| Issuer: | Morgan Stanley
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| Issue: | Worst-of fixed coupon autocallable RevCons
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| Underlying stocks: | Berkshire Hathaway Inc. (Symbol: BRK), Tesla Motors, Inc. (Symbol: TSLA) and Alphabet Inc. (Symbol: GOOG)
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| Amount: | $3,943,000
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| Maturity: | Aug. 1, 2018
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| Coupon: | 7%, payable monthly
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| Price: | Par
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| Payout at maturity: | If each stock finishes at or above downside threshold level, par plus the final coupon; otherwise, a number of shares of the worst performing stock equal to $1,000 divided by the initial price of that stock or, at the issuer’s option, the cash value of those shares
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| Call: | Automatically at par if each stock closes at or above its redemption threshold level on a monthly determination date after three months
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| Initial share prices: | $164.25 for Berkshire Hathaway, $254.47 for Tesla, $835.57 for Alphabet
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| Redemption thresholds: | 95% of initial levels through June; 90% of initial levels beginning in July, 85% of initial levels beginning in February 2018
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| Downside thresholds: | $82.125 for Berkshire Hathaway, $127.235 for Tesla, $417.835 for Alphabet; 50% of initial levels
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| Pricing date: | Jan. 26
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| Settlement date: | Feb. 2
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| Underwriter: | Morgan Stanley & Co. LLC
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| Fees: | 2%
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| Cusip: | 61768CEM5
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