Morgan Stanley plans contingent income autocallables tied to Facebook

By Toni Weeks

San Luis Obispo, Calif., Dec. 2 – Morgan Stanley plans to price contingent income autocallable securities due Dec. 27, 2016 linked to the common stock of Facebook, Inc., according to an FWP filing with the Securities and Exchange Commission.

If Facebook stock closes at or above the downside threshold level, 80% of the initial share price, on a monthly determination date, the notes will pay a contingent payment of $8.75 per $1,000 note for that month. The payment is equivalent to 10.5% per year.

If the closing share price is greater than or equal to the initial share price on any quarterly determination date, 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. Otherwise, investors will share fully in losses from the initial share price to the final share price.

Morgan Stanley & Co. LLC is the agent.

The notes (Cusip: 61761JUZ0) will price Dec. 19 and settle Dec. 24.

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