By Susanna Moon
Chicago, June 19 - Morgan Stanley priced $28.2 million of contingent income autocallable securities due June 20, 2016 with step-up redemption linked to Wells Fargo & Co. shares, according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly coupon at a rate of 9% per year if Wells Fargo stock closes at or above the 80% downside threshold level on the determination date for that quarter.
The notes will be called at par plus the contingent coupon if on any of the first 11 quarterly determination dates, the shares close at or above the redemption level, which will be 105% of the initial share price for the first four call observation dates, 110% of the initial share price for the next four dates and 115% of the initial share price for the final three dates.
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, the cash value of those shares.
Morgan Stanley & Co. LLC is the agent.
| Issuer: | Morgan Stanley
|
| Issue: | Contingent income autocallable securities with step-up redemption
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| Underlying stock: | Wells Fargo & Co. (Symbol: WFC)
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| Amount: | $28.2 million
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| Maturity: | June 20, 2016
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| Contingent coupon: | 9% per year, payable quarterly if Wells Fargo stock closes at or above downside threshold level on determination date for that quarter
|
| Price: | Par of $10
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| Payout at maturity: | If final share price is greater than or equal to downside threshold level, par plus contingent payment; otherwise, 0.24900 Wells Fargo shares or, at issuer's option, cash amount equal to value of those shares
|
| Call: | On any of first 11 quarterly determination dates at par plus contingent payment if shares close at or above redemption level, which will be 105% of initial share price for first four call observation dates, 110% of initial share price for next four dates and 115% of initial share price for final three dates
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| Initial share price: | $40.16
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| Downside threshold: | $32.128, 80% of initial share price
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| Pricing date: | June 14
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| Settlement date: | June 19
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| Agent: | Morgan Stanley & Co. LLC
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| Fees: | 2.25%
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| Cusip: | 61762E653
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