Morgan Stanley eyes contingent income autocallables linked to ETFs

By Sarah Lizee

Olympia, Wash., Oct. 29 – Morgan Stanley Finance LLC plans to price contingent income buffered autocallable securities due May 5, 2022 linked to the lesser performing of the Financial Select Sector SPDR fund, the Energy Select Sector SPDR fund and the Utilities Select Sector SPDR fund, according to a 424B2 filing with the Securities and Exchange Commission.

Each quarter, the notes will pay a contingent coupon at the rate of 9.8% per year if each ETF closes at or above its buffer level, 65% of its initial share price, on the determination date for that quarter.

Beginning Feb. 5, 2020, the notes will be automatically called at par if each ETF closes at or above its initial share price on any quarterly determination date.

The payout at maturity will be par unless either ETF finishes below its buffer level, 65% of its initial share price, in which case investors will lose 1% for every 1% that the lesser-performing ETF declines.

The notes are guaranteed by Morgan Stanley.

Morgan Stanley & Co. LLC is the agent.

The notes will price on Oct. 31.

The Cusip number is 61770C541.

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