Morgan Stanley plans contingent income autocallables on three funds

Chicago, Jan. 10 – Morgan Stanley Finance LLC intends to price contingent income autocallable securities due Feb. 2, 2022 linked to the worst performing of the Financial Select Sector SPDR fund, the Health Care Select Sector SPDR fund and the Technology Select Sector SPDR fund, according to an FWP filing with the Securities and Exchange Commission.

The notes will be guaranteed by Morgan Stanley.

Each quarter, the notes will pay a contingent quarterly coupon at a rate of at least 7.25% per year if each fund closes at or above its downside threshold level, 65% of its initial level, on the determination date for that quarter. The exact coupon will be set at pricing.

Beginning July 29, the notes will be automatically called at par plus the contingent coupon if the closing level of each fund is greater than or equal to its 95% call threshold level on any quarterly redemption date.

If each fund finishes at or above its downside threshold level, 65% of its initial level, the payout at maturity will be par plus the final contingent coupon.

Otherwise, investors will lose 1% for each 1% decline of the worst performing fund from its initial level.

Morgan Stanley & Co. LLC is the agent.

The notes (Cusip: 61768DYL3) will price on Jan. 28.

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