Morgan Stanley plans contingent income autocallables tied to Alibaba

By Marisa Wong

Madison, Wis., June 12 – Morgan Stanley plans to price contingent income autocallable securities due June 22, 2018 linked to Alibaba Group Holding Ltd. American Depositary 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 10.65% if Alibaba stock closes at or above the 80% downside threshold level on the determination date for that quarter.

The notes will be called at par plus the contingent coupon if the stock close at or above its initial level on any of the first 11 quarterly determination dates.

If the notes are not called and Alibaba stock finishes at or above the 80% downside threshold level, the payout at maturity will be par plus the contingent payment.

Otherwise, investors will receive a number of Alibaba shares equal to $10 divided by the initial stock price or, at Morgan Stanley’s option, the cash value of those shares.

Morgan Stanley & Co. LLC is the agent.

The notes are expected to price June 19 and settle June 24.

The Cusip number is 61765G424.

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