Morgan Stanley plans contingent income autocallables on United Continental

By Jennifer Chiou

New York, Dec. 19 – Morgan Stanley plans to price contingent income autocallable securities due Dec. 29, 2017 linked to the common stock of United Continental Holdings, Inc., according to an FWP with the Securities and Exchange Commission.

If United Continental stock closes at or above the downside threshold level, 75% of the initial share price, on a quarterly determination date, the notes will pay a contingent payment of $0.45125 per $10 note for that quarter. The payment is equivalent to 18.05% per year.

If the closing share price is greater than or equal to the initial share price on any of the first 11 quarterly determination dates, 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 75% downside threshold level, the payout at maturity will be par plus the contingent payment. Otherwise, investors will receive a number of shares of United Continental stock equal to $10 divided by the initial share price or, at the issuer’s option, the cash value of those shares.

The notes (Cusip: 61764M398) will price on Dec. 26 and settle on Dec. 31.

Morgan Stanley & Co. LLC is the agent with Morgan Stanley Wealth Management as dealer.

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