By Angela McDaniels
Tacoma, Wash., March 1 - Morgan Stanley priced $18.4 million of contingent income autocallable securities due March 4, 2016 linked to the common stock of Wells Fargo & Co. with step-up redemption threshold level feature, according to a 424B2 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%. 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 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 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.
| Issuer: | Morgan Stanley
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| Issue: | Contingent income autocallable securities with step-up redemption threshold level feature
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| Underlying stock: | Wells Fargo & Co. (Symbol: WFC)
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| Amount: | $18.4 million
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| Maturity: | March 4, 2016
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| Coupon: | If Wells Fargo stock closes at or above downside threshold level on quarterly determination date, 2.025%; otherwise, no interest will be paid for that quarter
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| Price: | Par of $10.00
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| Payout at maturity: | If final share price is greater than or equal to downside threshold level, par plus contingent quarterly payment; otherwise, 0.28466 Wells Fargo shares or, at issuer's option, cash amount equal to value of those shares
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| Call: | Automatically at par plus contingent quarterly coupon if closing share price is greater than or equal to redemption threshold level on any of first 11 quarterly determination dates
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| Initial share price: $35.13
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| Downside threshold: | $28.104, 80% of initial share price
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| Redemption threshold: | $36.8865, or 105% of initial share price, on determination dates one through four; $38.643, or 110% of initial share price, on determination dates five through eight; $40.3995, or 115% of initial share price, on determination dates nine through 11
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| Pricing date: | Feb. 27
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| Settlement date: | March 4
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| Agent: | Morgan Stanley & Co. LLC
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| Fees: | 2.25%
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| Cusip: | 61761M607
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