Morgan Stanley plans contingent income autocallables on Bank of America

By Susanna Moon

Chicago, July 21 – Morgan Stanley plans to price contingent income autocallable securities due July 2017 with step-up redemption level linked to Bank of America 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 8.05% if Bank of America stock closes at or above the 80% barrier level on a determination date for that quarter.

The notes will be redeemed at par of $10 plus the contingent payment if the stock closes at or above the redemption threshold on any of the first 11 quarterly determination dates.

The redemption threshold will be 105% of the initial share price for the first four determination dates, stepping up to 110% of the initial share price for the next four determination dates and to 115% of the initial price for the final three determination dates.

The payout at maturity will be par plus the contingent payment unless the stock finishes below its 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.

The notes will price and settle in July.

The Cusip number is 61758S104.

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