Morgan Stanley plans contingent income autocallables linked to Valero

By Toni Weeks

San Luis Obispo, Calif., June 5 – Morgan Stanley plans to price contingent income autocallable securities due June 15, 2018 linked to Valero Energy Corp. 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 10% if Valero stock closes at or above the 75% downside threshold level on the determination date for that quarter.

The notes will be called at par plus the contingent coupon if the stock close at or above its initial level on any of the first 11 quarterly determination dates.

If the notes are not called and Valero stock finishes at or above the 75% downside threshold level, the payout at maturity will be par plus the contingent payment.

Otherwise, investors will receive a number of Valero shares equal to $10 divided by the initial stock price or, at Morgan Stanley’s option, the cash value of those shares.

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

The notes are expected to price June 12 and settle June 17.

The Cusip number is 61765G408.

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