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Published on 1/23/2014 in the Prospect News Structured Products Daily.

Morgan Stanley plans contingent income autocallables linked to Tesla

By Angela McDaniels

Tacoma, Wash., Jan. 23 - Morgan Stanley plans to price contingent income autocallable securities due February 2015 linked to the common stock of Tesla Motors, Inc., according to an FWP filing with the Securities and Exchange Commission.

If Tesla stock closes at or above the downside threshold level, 60% of the initial share price, on a quarterly determination date, the notes will pay a 4.0375% contingent payment that quarter. The amount is equivalent to 16.15% per year.

If the closing share price is greater than or equal to the initial share price on any of the first three quarterly determination dates, the notes will be automatically redeemed at par of $10 plus the contingent quarterly coupon.

If the notes are not called and the final share price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the contingent quarterly coupon. Otherwise, the payout will be a number of Tesla shares equal to $10 divided by the initial share price or, at the issuer's option, a cash amount equal to the value of those shares.

Morgan Stanley & Co. LLC is the agent.

The notes will price in January and settle in February.

The Cusip number is 61760S225.


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