By Toni Weeks
San Diego, Oct. 1 - Morgan Stanley priced $18 million of contingent income autocallable securities due Sept. 27, 2013 linked to the common stock of Starbucks Corp., according to a 424B2 filing with the Securities and Exchange Commission.
If Starbucks stock closes above the downside threshold level - 75% of the initial share price - on a quarterly determination date, investors will receive a contingent payment of $0.25 for each $10.00 note. Otherwise, no contingent payment will be made for that period.
If the closing share price is greater than the initial share price on any of the first three quarterly determination dates, the notes will be automatically redeemed at par 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. If the final share price is less than the downside threshold level, the payout will be a number of Starbucks shares equal to the principal amount of notes divided by the initial share price or, at Morgan Stanley's option, the cash value of those shares.
Morgan Stanley & Co. LLC is the agent, and Morgan Stanley Smith Barney LLC will handle distribution.
| Issuer: | Morgan Stanley
|
| Issue: | Contingent income autocallable securities
|
| Underlying stock: | Starbucks Corp. (Symbol: SBUX)
|
| Amount: | $18 million
|
| Maturity: | Sept. 27, 2013
|
| Coupon: | 2.5% if closing price is at least 75% of initial price on quarterly determination date; otherwise, none
|
| Price: | Par
|
| Payout at maturity: | If final share price is at least 75% of initial, par plus contingent quarterly payment; otherwise, 0.19594 Starbucks shares per $10.00 principal amount, or, at Morgan Stanley's option, equivalent cash amount of those shares
|
| Initial price: | $51.035
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| Threshold level: | $38.27625, 75% of initial share price
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| Call: | Par plus contingent payment if closing share price greater than initial share price on first three quarterly determination dates
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| Pricing date: | Sept. 27
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| Settlement date: | Oct. 2
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| Agent: | Morgan Stanley & Co. LLC, with Morgan Stanley Smith Barney LLC as distributor
|
| Fees: | 1.5%
|
| Cusip: | 61755S610
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