Morgan Stanley plans contingent income autocallables on two stocks

By Marisa Wong

Madison, Wis., May 14 – Morgan Stanley plans to price contingent income autocallable securities due May 25, 2018 linked to the worst performing of the common shares of International Business Machines Corp. and Johnson & Johnson, according to an FWP filing with the Securities and Exchange Commission.

Each quarter, the notes will pay a contingent coupon at an annual rate of 8.35% if each stock closes at or above its downside threshold level, 75% of its initial share price, on the determination date for that quarter.

The notes will be redeemed at par plus the contingent coupon if each stock closes at or above its initial share price on any quarterly determination date after one year.

If the notes are not called and each stock finishes at or above its downside threshold level, the payout at maturity will be par plus the contingent coupon. Otherwise, investors will be fully exposed to the decline of the worst-performing stock.

Morgan Stanley & Co. LLC is the agent.

The notes will price on May 22 and settle on May 28.

The Cusip number is 61765G192.

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