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Morgan Stanley plans contingent income autocallables with step-up linked to Wells Fargo
By Angela McDaniels
Tacoma, Wash., Feb. 20 - Morgan Stanley plans to price contingent income autocallable securities due March 2016 linked to the common stock of Wells Fargo & Co. with step-up redemption threshold level feature, according to an FWP filing with the Securities and Exchange Commission.
If Wells Fargo 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 quarterly coupon of 2.025% to 2.525%, with the exact amount to be set at pricing. Otherwise, no interest will be paid for that quarter.
The notes will be automatically redeemed at par of $10 plus the contingent quarterly coupon 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 redemption threshold level will be 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 quarterly payment. If the final share price is less than the downside threshold level, investors will receive a number of Wells Fargo shares equal to $10 divided by the initial share price or, at the issuer's option, a cash amount equal to the value of those shares.
Morgan Stanley & Co. LLC is the agent.
The notes will price in February and settle in March.
The Cusip number is 61761M607.
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