By Toni Weeks
San Diego, May 26 - Morgan Stanley priced $3 million of contingent income autocallable securities due May 27, 2014 linked to the common stock of Freeport-McMoRan Copper & Gold Inc., according to an FWP filing with the Securities and Exchange Commission.
If Freeport-McMoRan stock closes above the downside threshold level - 70% of the initial share price - on a quarterly determination date, investors will receive a contingent payment of 2.75%, or $0.275 for each $10.00 note. Otherwise, no contingent payment will be made for that period.
If the closing share price is greater than the initial share price on any of the first 11 quarterly determination dates, the notes will be automatically redeemed at par plus the contingent payment.
If the notes are not called and the final share price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the contingent payment. If the final share price is less than the downside threshold level, the payout will be a number of Freeport-McMoRan shares equal to the principal amount of notes divided by the initial share price or, at Morgan Stanley's option, the cash value of those shares.
Morgan Stanley & Co. Inc. is the agent.
| Issuer: | Morgan Stanley
|
| Issue: | Contingent income autocallable securities
|
| Underlying stock: | Freeport-McMoRan Copper & Gold Inc. (Symbol: FCX)
|
| Amount: | $2,998,800
|
| Maturity: | May 27, 2014
|
| Coupon: | If stock closes above threshold level on quarterly determination date, 2.75% for that quarter; otherwise, zero coupon for that quarter
|
| Price: | Par of $10.00
|
| Payout at maturity: | If final share price is greater than or equal to threshold level, par plus 2.75%; otherwise, number of Freeport-McMoRan shares equal to par divided by initial share price or, at Morgan Stanley's option, equivalent cash amount of those shares
|
| Call: | Automatically at par plus contingent coupon if closing share price greater than initial share price on quarterly determination dates through May 21, 2014
|
| Initial price: | $48.82
|
| Threshold level: | $34.174, 70% of initial share price
|
| Pricing date: | May 24
|
| Settlement date: | May 27
|
| Agent: | Morgan Stanley & Co. Inc.
|
| Fees: | 2.25%
|
| Cusip: | 61760E317
|
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