By Marisa Wong
Madison, Wis., May 29 – Morgan Stanley priced $3.82 million of 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 a 424B2 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.
| Issuer: | Morgan Stanley
|
| Issue: | Contingent income autocallable securities
|
| Underlying stocks: | International Business Machines Corp. (NYSE: IBM) and Johnson & Johnson (NYSE: JNJ)
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| Amount: | $3,818,000
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| Maturity: | May 25, 2018
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| Contingent payment: | 8.35% per year, payable each quarter that both stocks close at or above downside threshold levels on the determination date for that quarter
|
| Price: | Par of $10
|
| Payout at maturity: | If each stock finishes at or above its downside threshold level, par plus the contingent coupon; otherwise, full exposure to the decline of the worst-performing stock
|
| Call: | At par plus contingent coupon if each stock closes at or above its initial share price on any quarterly determination date after one year
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| Initial share prices: | $172.22 for IBM, $101.35 for Johnson & Johnson
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| Downside thresholds: | $129.165 for IBM, $76.013 for Johnson & Johnson, 75% of initial prices
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| Pricing date: | May 22
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| Settlement date: | May 28
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| Agent: | Morgan Stanley & Co. LLC
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| Fees: | 2.5%
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| Cusip: | 61765G192
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