Morgan Stanley plans contingent income autocallables linked to Netflix

By Toni Weeks

San Luis Obispo, Calif., July 25 – Morgan Stanley plans to price contingent income autocallable securities due August 2015 linked to Netflix, Inc. shares, according to an FWP filing with the Securities and Exchange Commission.

The notes will pay a contingent quarterly coupon at an annual rate of 12.5% if Netflix stock closes at or above the 75% downside threshold level on a determination date for that quarter.

The notes will be redeemed at par of $10 plus the contingent payment if the stock closes at or above the initial level on any of the first three quarterly determination dates.

The payout at maturity will be par plus the contingent payment unless the stock finishes below its downside threshold level, in which case the payout will be a number of Netflix shares equal to $10 divided by the initial share price or, at the issuer's option, the cash equivalent.

Morgan Stanley & Co. LLC is the agent.

The notes will price and settle in August.

The Cusip number is 61758S179.

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