By Wendy Van Sickle
Columbus, Ohio, Feb. 15 – Morgan Stanley Finance LLC priced $7.21 million of contingent income autocallable securities due Feb. 13, 2020 linked to the common stock of Apple Inc., according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly coupon at an annual rate of 8.75% if the shares close at or above the 80% downside threshold on the observation date for that quarter.
The notes will be called at par plus the contingent coupon if Apple shares close at or above the redemption threshold on any of the first 11 determination dates.
The call threshold will be 105% of the initial share price for the first four determination dates, stepping up to 110% of the initial share price for the fifth through eighth determination dates and to 115% of the initial share price for the ninth through 11th determination dates.
The payout at maturity will be par plus the final coupon unless the shares finish below the 80% downside threshold, in which case investors will lose 1% for each 1% decline.
Morgan Stanley & Co. LLC is the underwriter.
Issuer: | Morgan Stanley Finance LLC
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Guarantor: | Morgan Stanley
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Issue: | Contingent income autocallable securities
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Underlying stock: | Apple Inc. (Symbol: AAPL)
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Amount: | $7,209,900
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Maturity: | Feb. 13, 2020
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Coupon: | 8.75% per year, payable quarterly if Apple shares close at or above downside threshold level on determination date for that quarter
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Price: | Par of $10.00
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Payout at maturity: | If final share price is greater than or equal to downside threshold level, par plus final contingent coupon; otherwise, 1% loss for every 1% that final share price is less than initial share price
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Call: | At par plus contingent coupon if Apple shares close at or above call threshold on any quarterly determination date other than final determination date
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Initial share price: | $132.12
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Downside threshold: | $105.696, 80% of initial share price
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Call thresholds: | $138.726, or 105% of the initial share price, for the first four determination dates; stepping up to $145.332, or 110% of the initial share price, for the fifth through determination dates; and to $151.938, or 115% of the initial share price, for the ninth through 11th determination dates
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Pricing date: | Feb. 10
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Settlement date: | Feb. 15
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Agent: | HSBC Securities (USA) Inc.
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Distribution: | Morgan Stanley Smith Barney LLC
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Fees: | 2.5%
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Cusip: | 61766V388
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