New Issue: Morgan Stanley prices $199,000 step-up contingent income autocallables on S&P, Russell

By Toni Weeks

San Luis Obispo, Calif., June 27 - Morgan Stanley priced $199,000 of contingent income autocallable step-up securities due June 28, 2028 linked to the worst performing of the S&P 500 index and the Russell 2000 index, according to a 424B2 filing with the Securities and Exchange Commission.

The notes will pay a contingent monthly coupon at an annualized rate if each index closes at or above its 67.5% coupon barrier level on the determination date for that month. The rate will be 7% for the first five years, stepping up to 9% for years six to 10 and to 12% after that.

The notes will be redeemed at par plus the contingent coupon if both indexes close at or above their initial levels on any quarterly redemption determination date after five years.

If the notes are not called, the payout at maturity will be par plus the final contingent coupon unless either index finishes below its downside threshold level, in which case investors will be fully exposed to any losses of the worst-performing index.

Morgan Stanley & Co. LLC is the agent.

Issuer:	Morgan Stanley
Issue:	Contingent income autocallable step-up securities
Underlying indexes:	S&P 500 and Russell 2000
Amount:	$199,000
Maturity:	June 28, 2028
Coupon:	If both indexes close at or above coupon barriers on monthly determination date, 7% initially, stepping up to 9% on June 28, 2018 and to 12% on June 28, 2023
Price:	Par
Payout at maturity:	If each index finishes at or above downside threshold level, par plus final contingent coupon; otherwise, full exposure to losses of worst performing index
Call:	At par plus contingent coupon if both indexes close at or above initial levels on any quarterly redemption determination date after five years
Initial index levels:	1,588.03 for S&P and 961.26 for Russell 2000
Coupon barrier levels:	1,071.92 for S&P and 648.851 for Russell 2000; 67.5% of initial levels
Downside threshold:	794.015 for S&P and 480.63 for Russell 2000; 50% of initial levels
Pricing date:	June 25
Settlement date:	June 28
Agent:	Morgan Stanley & Co. LLC
Fees:	3.5%
Cusip:	61761JHE2

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