By Angela McDaniels
Tacoma, Wash., March 9 - Morgan Stanley priced $1 million of leveraged CMS curve and S&P 500 index-linked accrual notes due March 25, 2031 with issuer fixed-rate conversion right, according to a 424B2 filing with the Securities and Exchange Commission.
The coupon will be 11% for the first two years. After that, the rate will accrue at five times the spread of the 30-year Constant Maturity Swap rate over the two-year CMS rate on each day that the S&P 500 closes at or above 975, subject to a floor of zero and a cap of 12% per year in any interest payment period.
Interest is payable quarterly. On each interest payment date from March 23, 2014 onward, the issuer can choose to exercise its conversion right, in which case the interest rate will be converted to a fixed rate of 11% for each subsequent interest payment date.
The payout at maturity will be par.
Morgan Stanley & Co. Inc. is the agent.
| Issuer: | Morgan Stanley
|
| Issue: | Leveraged CMS curve and S&P 500 index-linked accrual notes
|
| Amount: | $1 million
|
| Maturity: | March 25, 2031
|
| Coupon: | 11% for first two years; after that, five times spread of 30-year CMS rate over two-year CMS rate multiplied by proportion of days on which S&P 500 closes at or above 975, subject to cap of 12% and floor of zero; payable quarterly
|
| Issuer conversion right: | On interest payment dates beginning March 23, 2014, issuer can choose to convert interest rate to 11% for each subsequent interest payment date
|
| Price: | Par
|
| Payout at maturity: | Par
|
| Pricing date: | March 7
|
| Settlement date: | March 25
|
| Agent: | Morgan Stanley & Co. Inc.
|
| Fees: | 3.5%
|
| Cusip: | 61745E6R7
|
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