By Marisa Wong
Madison, Wis., May 10 - Morgan Stanley priced $3 million of contingent income autocallable securities due May 13, 2016 with step-up redemption threshold level feature linked to Bank of America Corp. shares, according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly coupon at a rate of 10.55% per year if Bank of America stock closes at or above the 80% downside threshold level on the determination date for that quarter.
If the shares close at or above the applicable redemption level on any of the first 11 quarterly determination dates, the notes will be called at par plus the contingent coupon. The redemption level is 105% of the initial price for the first four determination dates and steps up to 110% of the initial price for the next four determination dates and to 115% of the initial price for the last three dates.
If Bank of America stock finishes at or above the downside threshold level, the payout at maturity will be par plus the contingent payment.
Otherwise, investors will receive a number of shares of Bank of America stock equal to $10 divided by the initial share price or, at the issuer's option, the cash value of those shares.
Morgan Stanley & Co. LLC is the agent.
| Issuer: | Morgan Stanley
|
| Issue: | Contingent income autocallable securities
|
| Underlying stock: | Bank of America Corp. (Symbol: BAC)
|
| Amount: | $3 million
|
| Maturity: | May 13, 2016
|
| Contingent coupon: | 10.55% per year, payable quarterly if Bank of America stock closes at or above downside threshold level on determination date for that quarter
|
| Price: | Par of $10
|
| Payout at maturity: | If final share price is greater than or equal to downside threshold level, par plus contingent payment; otherwise, 0.76805 Bank of America shares or, at issuer's option, cash amount equal to value of those shares
|
| Call: | At par plus contingent payment if closing share price is greater than or equal to redemption level on any of first 11 quarterly determination dates; redemption level is 105% of initial price for first four determination dates and steps up to 110% of initial price for next four determination dates and to 115% of initial price for last three dates
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| Initial share price: | $13.02
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| Downside threshold: | $10.416, 80% of initial share price
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| Pricing date: | May 8
|
| Settlement date: | May 13
|
| Agent: | Morgan Stanley & Co. LLC
|
| Fees: | 2.25%
|
| Cusip: | 61762E356
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