By Marisa Wong
Madison, Wis., Jan. 27 - Morgan Stanley priced $1 million of leveraged CMS curve and S&P 500 index-linked accrual notes due Feb. 14, 2031 with issuer fixed-rate conversion right, according to a 424B2 filing with the Securities and Exchange Commission.
The coupon will be 10% for the first four years. After that, the rate will accrue at five times the spread of the 30-year Constant Maturity Swap rate over the two-year CMS rate for each day that the S&P 500 is at least 990, up to a maximum coupon of 12%. Interest is payable quarterly and cannot be less than zero.
Beginning Feb. 14, 2015, the issuer may elect to exercise the right to convert the coupon payment to a fixed rate of 10% from the floating rate upon notice at least 10 business days.
The payout at maturity will be par.
Morgan Stanley & Co. Inc. is the agent.
| Issuer: | Morgan Stanley
|
| Issue: | Leveraged CMS curve and index-linked accrual notes
|
| Underlying index: | S&P 500
|
| Amount: | $1 million
|
| Maturity: | Feb. 14, 2031
|
| Coupon: | 10% for first four years; thereafter, five times spread of 30-year CMS rate over two-year CMS rate for each day S&P 500 is at least 990, capped at 12% with floor of 0%; option to convert to fixed rate of 10% beginning Feb. 14, 2015; payable quarterly
|
| Price: | Par
|
| Payout at maturity: | Par
|
| Pricing date: | Jan. 25
|
| Settlement date: | Feb. 14
|
| Agent: | Morgan Stanley & Co. Inc.
|
| Fees: | 3.5%
|
| Cusip: | 61745E3D1
|
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