Morgan Stanley plans contingent income autocallables on Valero Energy

By Susanna Moon

Chicago, May 16 - Morgan Stanley plans to price contingent income autocallable securities due May 2015 linked to Valero Energy Corp. shares, according to an FWP filing with the Securities and Exchange Commission.

The notes will pay a contingent quarterly coupon at an annual rate of 10.85% if the stock closes at or above its 75% barrier level on the determination date for that quarter.

The notes will be called at par plus the contingent coupon if the stock closes at or above the initial level on any of the first three determination dates.

The payout at maturity will be par plus the final contingent coupon unless the stock finishes below the 75% barrier level, in which case investors will receive a number of Valero Energy shares equal to par of $10.00 divided by the initial share price.

Morgan Stanley & Co. LLC is the agent. Morgan Stanley Wealth Management will handle distribution.

The notes will price and settle in May.

The Cusip number is 61761S232.

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