New Issue: Morgan Stanley prices $4.03 million contingent income autocallables on Bank of America

By Toni Weeks

San Luis Obispo, Calif., Oct. 17 - Morgan Stanley priced $4.03 million of contingent income autocallable securities due Oct. 18, 2016 with step-up redemption threshold level linked to Bank of America Corp. shares, according to a 424B2 filing with the Securities and Exchange Commission.

If Bank of America stock closes at or above the 72% barrier level on a quarterly review date, the notes will pay a contingent quarterly coupon at an annual rate of 8% for that quarter.

If the shares close at or above the redemption level on any of the first 11 quarterly determination dates, the notes will be redeemed at par of $10 plus the contingent coupon. The redemption level will be 105% of the initial share price for the first four review dates, stepping up to 110% of the initial share price for the next four dates and then to 115% of the initial share price for the final three dates.

If the notes are not called, the payout at maturity will be par plus the contingent payment unless the stock closes below the 72% barrier level, in which case the payout will be a number of Bank of America shares equal to $10 divided by the initial share price or, at the issuer's option, the cash equivalent.

Morgan Stanley & Co. LLC is the agent with Morgan Stanley Wealth Management as dealer.

Issuer:	Morgan Stanley
Issue:	Contingent income autocallable securities
Underlying stock:	Bank of America Corp. (Symbol: BAC)
Amount:	$4,027,000
Maturity:	Oct. 18, 2016
Coupon:	8% per year, payable quarterly if Bank of America stock closes at or above 72% downside threshold level on quarterly review date
Price:	Par of $10
Payout at maturity:	Par plus contingent payment unless stock closes below downside threshold level, in which case 0.70225 Bank of America shares or, at issuer's option, cash equivalent
Call:	At par plus contingent coupon if shares close at or above applicable redemption threshold on any of first 11 quarterly determination dates; redemption threshold is 105% of initial price for first four determination dates, 110% of initial price for next four dates and 115% for last three dates
Initial share price:	$14.24
Downside threshold:	$10.253, 72% of initial price
Redemption threshold levels:	$14.952, 105% of initial price, for first four quarterly determination dates; $15.664, 110% of initial share price, for next four determination dates; $16.376, 115% of initial share price, for final three determination dates
Pricing date:	Oct. 15
Settlement date:	Oct. 18
Agent:	Morgan Stanley & Co. LLC with Morgan Stanley Wealth Management as dealer
Fees:	2.25%
Cusip:	61762W349

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