Morgan Stanley plans autocallable step-up notes linked to S&P 500

By Toni Weeks

San Diego, July 3 - Morgan Stanley plans to price 0% market-linked autocallable step-up notes due July 30, 2027 linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

If the index closes at or above the barrier level, 990, on a quarterly determination date, investors will receive a contingent quarterly coupon. Otherwise, no contingent quarterly coupon will be paid that quarter. The contingent quarterly coupon will be 7% per year in years one through three, 8% per year in years four through six, 10% per year in years seven through nine, 12% per year in years 10 through 12 and 15% per year in years 13 through 15.

Beginning in July 2017, the notes will be automatically redeemed at par plus the contingent quarterly coupon if the index closes at or above the initial index level on any quarterly redemption determination date.

The payout at maturity will be par plus the final contingent quarterly coupon, if any.

The notes (Cusip: 617482U44) will price July 26 and settle July 31.

Morgan Stanley & Co. LLC is the agent.

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