Morgan Stanley amends contingent annual interest notes on 20 stocks

By Jennifer Chiou

New York, Sept. 27 - Morgan Stanley updated the terms of its planned offering of contingent annual interest notes linked to a basket of 20 stocks, which are now slated to mature on Oct. 3, 2017, according to a 424B2 filing with the Securities and Exchange Commission.

The previously planned maturity date was Sept. 30, 2017.

As reported, the equally weighted basket includes Altria Group, Inc., American Electric Power Co., Inc., Bristol-Myers Squibb Co., Carnival Corp., Colgate-Palmolive Co., Duke Energy Corp., Exxon Mobil Corp., Frontier Communications Corp., General Electric Co., H.J. Heinz Co, International Paper Co., Johnson & Johnson, JPMorgan Chase & Co., Kimberly-Clark Corp., Nucor Corp., Occidental Petroleum Corp., Time Warner Inc., Travelers Cos., Inc., Verizon Communications Inc. and Waste Management, Inc.

Heinz and Kimberly-Clark replace International Business Machines Corp. and Microsoft Corp.

On Oct. 3 of each year, the notes will pay a coupon equal to the sum of the basket stocks' weighted component returns, subject to a minimum interest rate of 2%. If a basket stock's return is flat or positive, its component return will be fixed at 9.9% to 11.9%. Otherwise, its component return will be the greater of the stock return and negative 20%.

The payout at maturity will be par.

The notes (Cusip: 617482YQ1) will price on Sept. 28 and settle on Oct. 3.

Morgan Stanley & Co. LLC is the agent.

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