Morgan Stanley plans contingent income securities on two indexes

By Toni Weeks

San Luis Obispo, Calif., July 3 – Morgan Stanley plans to price contingent income securities due July 31, 2029 linked to the worst performing of the Russell 2000 index and the Euro Stoxx 50 index, according to an FWP filing with the Securities and Exchange Commission.

The notes will pay a contingent monthly coupon at a fixed rate of 7.5% per year for the first three years. After that, the notes will pay the 7.5% monthly coupon only if the closing value of each index is at or above its coupon barrier level, 75% of the initial level, on the observation date for that month.

The payout at maturity will be par plus the final contingent coupon if each index finishes at or above the 75% coupon barrier level. If each index finishes below its coupon barrier level but at or above its downside threshold level, 50% of the initial value, the payout will be par. If either index finishes below the 50% downside threshold level, investors will be fully exposed to the decline of the worst-performing index.

Morgan Stanley & Co. LLC is the agent.

The notes are expected to price July 28 and settle July 31.

The Cusip number is 61761JRP6.

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