New Issue: Morgan Stanley prices $4.48 million contingent income notes on S&P 500

By Marisa Wong

Madison, Wis., July 24 - Morgan Stanley priced $4.48 million of contingent income securities due July 25, 2017 linked to the S&P 500 index, according to a 424B2 filing with the Securities and Exchange Commission.

The notes pay a contingent monthly payment of 9.5% per year, or $7.9167 per $1,000 principal amount of notes, if the index closes at or above the downside threshold level on the determination date for that month. Otherwise, no coupon will be paid that month. The downside threshold level is 70% of the initial index level.

If the final index level is greater than or equal to the downside threshold level, the payout at maturity will be par plus the contingent monthly payment. If the final index level is less than the downside threshold level, investors will be fully exposed to the decline of the index from the initial level.

Morgan Stanley & Co. LLC is the agent.

Issuer:	Morgan Stanley
Issue:	Contingent income securities
Underlying index:	S&P 500
Amount:	$4,483,000
Maturity:	July 25, 2017
Coupon:	9.5% per year if index closes at or above downside threshold level on determination date for that month; otherwise, no coupon will be paid that month
Price:	Par
Payout at maturity:	If final index level is greater than or equal to downside threshold level, par plus contingent monthly payment; otherwise, full exposure to decline of index from initial level
Initial index level:	1,362.66
Downside threshold value:	953.862, 70% of initial level
Pricing date:	July 20
Settlement date:	July 25
Agent:	Morgan Stanley & Co. LLC
Fees:	3%
Cusip:	617482V43

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