Morgan Stanley plans contingent income autocallables on Michael Kors

By Susanna Moon

Chicago, July 17 - Morgan Stanley plans to price contingent income autocallable securities due August 2014 linked to Michael Kors Holdings Ltd. shares, according to an FWP filing with the Securities and Exchange Commission.

If Michael Kors stock closes at or above 70% the barrier level on a quarterly review date, the notes will pay a contingent payment at an annualized rate of 14% to 16% for that quarter. The exact contingent quarterly coupon will be set at pricing.

If the shares close at or above the initial share price on any of the first three quarterly determination dates, the notes will be redeemed at par of $10 plus the contingent payment.

If the notes are not called, the payout at maturity will be par plus the contingent payment unless the stock closes below the trigger level, in which case the payout will be a number of Michael Kors shares equal to $10 divided by the initial share price or, at the issuer's option, the cash equivalent.

Morgan Stanley & Co. LLC is the agent with Morgan Stanley Smith Barney LLC as dealer.

The notes will price in July and settle in August.

The Cusip number is 61762P252.

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