By Susanna Moon
Chicago, July 3 – Morgan Stanley Finance LLC priced $2 million of fixed-to-floating rate securities due June 30, 2037 linked to the S&P 500 index and the Russell 2000 index, according to a 424B2 filing with the Securities and Exchange Commission.
The notes are guaranteed by Morgan Stanley.
The coupon will be fixed at 9% for the first year, payable quarterly. After that, interest will accrue at an annual rate equal to 20 times the 30-year ICE swap rate minus the two-year ICE swap rate for each day that each index closes at or above its 65% reference level, up to a maximum rate of 9% per year. Interest is payable quarterly and cannot be less than zero.
The payout at maturity will be par unless either index finishes below 50% trigger level, in which case investors will be fully exposed to the decline of worse performing index.
Morgan Stanley & Co. LLC is the agent.
| Issuer: | Morgan Stanley Finance LLC
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| Guarantor: | Morgan Stanley
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| Issue: | Fixed-to-floating securities
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| Underlying indexes: | S&P 500 index and Russell 2000 index
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| Amount: | $2 million
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| Maturity: | June 30, 2037
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| Coupon: | 9% initially; beginning June 30, 2018, at an annual rate equal to 20 times the 30-year ICE swap rate minus the two-year ICE swap rate for each day that each index closes at or above its 65% reference level, capped at 9%; payable quarterly
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| Price: | Variable
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| Payout at maturity: | Par, unless either index falls by more than 50%, in which case full exposure to loss of worse performing index
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| Reference levels: | 65% of initial levels
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| Barrier levels: | 50% of initial levels
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| Pricing date: | June 12
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| Settlement date: | June 30
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| Agent: | Morgan Stanley & Co. LLC
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| Fee: | 5%
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| Cusip: | 61766YBQ3
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