By Marisa Wong
Madison, Wis., Aug. 2 - Morgan Stanley priced $8.75 million of contingent income autocallable securities due Aug. 5, 2016 linked to the common stock of Michael Kors Holdings Ltd., according to a 424B2 filing with the Securities and Exchange Commission.
If Michael Kors stock closes at or above the downside threshold level, 70% of the initial share price, on a quarterly determination date, the notes will pay a contingent payment of $0.2775 per $10 note for that quarter, equivalent to 11.1% per year.
If the closing share price is greater than or equal to the initial share price on any of the first 11 quarterly determination dates, the notes will be automatically redeemed at par of $10 plus the contingent payment.
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 payment. Otherwise, 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, a cash amount equal to the value of those shares.
Morgan Stanley & Co. LLC is the agent.
| Issuer: | Morgan Stanley
|
| Issue: | Contingent income autocallable securities
|
| Underlying stock: | Michael Kors Holdings Ltd. (Symbol: KORS)
|
| Amount: | $8,753,790
|
| Maturity: | Aug. 5, 2016
|
| Contingent coupon: | 2.775% (11.1% per year), payable quarterly if Michael Kors stock closes at or above downside threshold level on determination date for that quarter
|
| Price: | Par of $10
|
| Payout at maturity: | If final share price is greater than or equal to downside threshold level, par plus contingent payment; otherwise, 0.14850 Michael Kors shares or, at issuer's option, cash amount equal to value of those shares
|
| Call: | At par plus contingent payment if closing share price is greater than or equal to initial share price on any of first 11 quarterly determination dates
|
| Initial share price: | $67.34
|
| Downside threshold level: | $47.138, 70% of initial share price
|
| Pricing date: | July 31
|
| Settlement date: | Aug. 5
|
| Agent: | Morgan Stanley & Co. LLC
|
| Fees: | 2.25%
|
| Cusip: | 61762P310
|
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