Morgan Stanley plans contingent income autocallables tied to BofA

By Marisa Wong

Madison, Wis., July 15 - Morgan Stanley plans to price contingent income autocallable securities due July 2014 linked to the common stock of Bank of America Corp., according to an FWP filing with the Securities and Exchange Commission.

If Bank of America stock closes at or above the downside threshold level - 70% of the initial share price - on any quarterly determination date, investors will receive a contingent payment of 2.4% to 2.9%. The exact contingent payment will be set at pricing.

If the closing share price is greater than or equal to the initial share price on any of the first 11 determination dates, the notes will be redeemed at par plus the contingent payment.

The payout at maturity will be par plus the contingent payment unless the stock finishes below the downside threshold level, in which case investors will receive a number of Bank of America shares equal to the principal amount of notes divided by the initial share price or, at Morgan Stanley's option, the cash equivalent.

The notes (Cusip: 61760E150) will price and settle in July.

Morgan Stanley & Co. LLC is the agent.

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