Morgan Stanley plans contingent income autocallables tied to Goldman

By Devika Patel

Knoxville, Tenn., Sept. 29 – Morgan Stanley Finance LLC plans to price contingent income autocallable securities with step-up redemption threshold price feature due Oct. 9, 2020 linked to the common stock of Goldman Sachs Group, Inc., according to an FWP filing with the Securities and Exchange Commission.

The notes will be guaranteed by Morgan Stanley.

If Goldman shares close at or above the downside threshold level, 80% of the initial share price, on a quarterly determination date, the notes will pay a contingent payment that quarter at an annualized rate of 8.25%.

Beginning on Jan. 8, 2018, the notes will be called at par of $10 plus the contingent coupon if Goldman shares close at or above the redemption threshold price on any of the first 11 determination dates. The threshold redemption price will be 105% of the initial stock price for the first four determination dates; it will be 110% of the initial stock price for the fifth through eighth determination dates; and it will be 115% of the initial stock price for the ninth through 11th determination dates.

If the final share price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the final contingent coupon. Otherwise, investors will lose 1% for every 1% that the final share price is less than the initial share price.

Morgan Stanley & Co. LLC is the agent, with Morgan Stanley Wealth Management handling distribution.

The notes (Cusip: 61768J532) will price on Oct. 6 and settle on Oct. 12.

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