Published on 7/21/2020 in the Prospect News Structured Products Daily.
New Issue: Morgan Stanley sells $5.34 million callable contingent income notes on three ETFs
By Sarah Lizee
Olympia, Wash., July 21 – Morgan Stanley Finance LLC priced $5.34 million of callable contingent income securities due July 21, 2022 linked to the Financial Select Sector SPDR Fund, SPDR S&P Regional Banking ETF and SPDR S&P Bank ETF, according to a 424B2 filing with the Securities and Exchange Commission.
Each quarter, the notes will pay a contingent coupon at the rate of 11% per year if each ETF closes at or above its coupon barrier level, 55% of its initial level, on the observation date that period.
If the lowest-performing ETF finishes at or above its knock-in level, 55% of its initial level, the payout at maturity will be par plus the final coupon. If the lowest-performing ETF finishes below its knock-in level, investors will be fully exposed to the decline of the lowest-performing ETF from its initial level.
The notes will be callable at par on any quarterly redemption date starting Jan. 22, 2021.
The notes are guaranteed by Morgan Stanley.
Morgan Stanley & Co. LLC is the agent.
| Issuer: | Morgan Stanley Finance LLC
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| Guarantor: | Morgan Stanley
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| Issue: | Callable contingent income securities
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| Underlying ETFs: | Financial Select Sector SPDR Fund, SPDR S&P Regional Banking ETF and SPDR S&P Bank ETF
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| Amount: | $5,342,000
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| Maturity: | July 21, 2022
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| Coupon: | 11% per year, payable quarterly if each ETF closes at or above coupon barrier level on observation date that period
|
| Price: | Par
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| Payout at maturity: | If each ETF finishes at or above knock-in level, par; if any ETF finishes below knock-in level, full exposure to decline of lowest-performing ETF from its initial level
|
| Call option: | At par on any quarterly redemption date starting Jan. 22, 2021
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| Initial levels: | $23.95 for financial ETF, $36.69 for regional banking ETF, $30.25 for bank ETF
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| Coupon barriers: | $13.173 for financial ETF, $20.18 for regional banking ETF, $16.638 for bank ETF; 55% of initial levels
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| Knock-in levels: | $13.173 for financial ETF, $20.18 for regional banking ETF, $16.638 for bank ETF; 55% of initial levels
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| Pricing date: | July 17
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| Settlement date: | July 22
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| Agent: | Morgan Stanley & Co. LLC
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| Fees: | 1.75%
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| Cusip: | 61771BVQ4
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