Morgan Stanley plans contingent income autocallables on Lululemon

By Susanna Moon

Chicago, June 19 - Morgan Stanley plans to price contingent income autocallable securities due June 2014 linked to Lululemon athletica inc. shares, according to a 424B2 filing with the Securities and Exchange Commission.

The notes will pay a contingent quarterly coupon at an annualized rate of 12% to 14% if Lululemon stock closes at or above the 70% downside threshold level on the determination date for that quarter. The exact contingent quarterly coupon will be set at pricing.

The notes will be called at par plus the contingent coupon if the shares close at or above the initial share price on any of the first three quarterly determination dates.

If Lululemon stock finishes at or above the downside threshold level, the payout at maturity will be par plus the contingent payment.

Otherwise, investors will receive a number of shares of Lululemon stock equal to $10 divided by the initial share price or, at the issuer's option, the cash value of those shares.

Morgan Stanley & Co. LLC is the agent.

The notes will price and settle in June.

The Cusip number is 61762E760.

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