Morgan Stanley plans contingent income autocallables on Wells Fargo

By Marisa Wong

Madison, Wis., June 6 - Morgan Stanley plans to price contingent income autocallable securities due June 2016 with step-up redemption threshold level feature linked to the common stock of Wells Fargo & Co., according to an FWP filing with the Securities and Exchange Commission.

The notes will pay a contingent quarterly coupon at the rate of 8.75% to 10.75% per year if Wells Fargo stock closes at or above the downside threshold level, 80% of the initial share price, on the determination date for that quarter. The exact contingent coupon will be set at pricing.

If the shares close at or above the applicable redemption level on any of the first 11 quarterly determination dates, the notes will be called at par of $10 plus the contingent coupon. The redemption level is 105% of the initial price for determination dates one through four, 110% of the initial price for determination dates five through eight and 115% of the initial price for determination dates nine through 11.

If Wells Fargo stock finishes at or above the downside threshold level, the payout at maturity will be par plus the contingent payment. Otherwise, investors will receive a number of shares of Wells Fargo stock equal to $10 divided by the initial share price or, at the issuer's option, an amount in cash equal to the value of those shares.

Morgan Stanley & Co. LLC is the agent.

The notes will price and settle in June.

The Cusip number is 61762E653.

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