Morgan Stanley plans 8.65% contingent income autocallables with step-up redemption tied to Disney

By Wendy Van Sickle

Columbus, Ohio, Dec. 11 – Morgan Stanley plans to price contingent income autocallable securities with a step-up redemption threshold due Dec. 21, 2018 linked to the common stock of Walt Disney Co., according to an FWP filed with the Securities and Exchange Commission.

If Disney stock closes at or above the downside threshold level, 80% of the initial share price, on a quarterly determination date, investors will receive a contingent payment at an annual rate of 8.65%. Otherwise, no contingent payment will be made for that quarter.

If the closing share price is greater than or equal to the redemption threshold level on any of the first 11 quarterly determination dates, the notes will be automatically redeemed at par plus the contingent payment. The redemption threshold level is 105% of the initial share price on determination dates one through four, 110% of the initial share price on determination dates five through eight and 115% of the initial share price on determination dates nine through 11.

If the notes are not called and the final share price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the contingent payment. Otherwise, investors will be fully exposed to the loss.

The notes will price Dec. 18 and settle Dec. 23.

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

The Cusip number is 61765U464.

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