New Issue: Morgan Stanley prices $1.74 million fixed-to-floaters with 10% initial rate

By Tali Rackner

Norfolk, Va., Dec. 29 – Morgan Stanley Finance LLC priced $1.74 million of fixed-to-floating-rate notes due Dec. 30, 2036 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 interest rate is fixed at 10% for the first year. After that, it will accrue at 20 times the 30-year ICE swap rate minus the two-year ICE swap rate for each day both indexes close above 50% of their initial levels, up to a maximum rate of 10% a year.

The payout at maturity will be par unless either index finishes below its 50% barrier level, in which case investors will be fully exposed to the loss of the lesser-performing index.

Morgan Stanley & Co. LLC is the agent.

Issuer:	Morgan Stanley Finance LLC
Guarantor:	Morgan Stanley
Issue:	Fixed-to-floating-rate notes
Underlying indexes:	S&P 500 and Russell 2000
Amount:	$1,738,000
Maturity:	Dec. 30, 2036
Coupon:	10% for first year; then 20 times 30-year ICE swap rate minus two-year ICE swap rate for each day both indexes close above 50% of initial levels, capped at 10% a year; payable monthly
Initial index levels:	2,268.88 for S&P, 1,377.707 for Russell
Reference/barrier levels:	1,134.44 for S&P, 688.854 for Russell; 50% of initial levels
Price:	Variable
Payout at maturity:	Par unless either index finishes below barrier level, in which case full exposure to the loss of the lesser-performing index
Pricing date:	Dec. 27
Settlement date:	Dec. 30
Agent:	Morgan Stanley & Co. LLC
Fee:	4%
Cusip:	61766YAX9

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