By Marisa Wong
Madison, Wis., May 6 - Morgan Stanley priced $1.97 million of 0% upside knock-out buffered securities due May 13, 2013 linked to the price of gold, according to an FWP filing with the Securities and Exchange Commission.
An upside knock-out event will occur if the price of gold trades above 175% of the initial price during the life of the securities.
If a knock-out event has occurred, the payout at maturity will be par plus a fixed return of 24%.
If a knock-out event has not occurred and the final gold price is greater than the initial level, the payout at maturity will be par plus 125% of the gold return, capped at 93.75% due to the knock-out feature.
If a knock-out event has not occurred and the final gold price is less than the initial level but greater than or equal to 90% of the initial level, the payout at maturity will be par.
If a knock-out even has not occurred and the final price of gold is lower than the buffer, investors will share in losses at a rate of 1.1111% per 1% decline beyond the buffer.
Morgan Stanley & Co. Inc. is the agent.
| Issuer: | Morgan Stanley
|
| Issue: | Upside knock-out buffered securities
|
| Underlying commodity: | Gold
|
| Amount: | $1.97 million
|
| Maturity: | May 13, 2013
|
| Coupon: | 0%
|
| Price: | Par
|
| Payout at maturity: | If gold trades above knock-out price during life of notes, par plus 24%; otherwise, par plus 125% of gold return if that return is positive, par if gold price falls by up to 10% or par minus 1.1111% for every 1% that gold price falls beyond 10%
|
| Initial gold price: | $1,511.00
|
| Knock-out price: | $2,644.25, 175% of initial price
|
| Pricing date: | May 5
|
| Settlement date: | May 12
|
| Agent: | Morgan Stanley & Co.
|
| Fees: | 0.05%
|
| Cusip: | 617482UD4
|
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