By Angela McDaniels
Tacoma, Wash., March 4 - Morgan Stanley priced $1 million of range accrual step-up notes with issuer fixed-rate conversion right due March 22, 2031 linked to the S&P 500 index, according to a 424B2 filing with the Securities and Exchange Commission.
The interest rate will be 6.5% for the first four years. Beginning March 22, 2015, the interest rate will be the per-year rate multiplied by the proportion of days on which the S&P 500 closes at or above 1,050. The initial per-year rate is 7.5%, and it will step up to 8% on March 22, 2019, to 9% on March 22, 2023 and to 10% on March 22, 2027.
Interest is payable quarterly. On each interest payment date from March 22, 2015 onward, the issuer can choose to exercise its conversion right, in which case the interest rate will be converted to a fixed rate of 6.5% for each subsequent interest payment date.
The payout at maturity will be par.
The issuer said it may increase the issue size prior to settlement.
Morgan Stanley & Co. Inc. is the agent.
| Issuer: | Morgan Stanley
|
| Issue: | Range accrual step-up notes with issuer fixed-rate conversion right
|
| Underlying index: | S&P 500
|
| Amount: | $1 million
|
| Maturity: | March 22, 2031
|
| Coupon: | Initially 6.5%; beginning March 22, 2015, per-year rate multiplied by proportion of days on which S&P 500 closes at or above 1,050; per-year rate is initially 7.5% and steps up to 8% on March 22, 2019, to 9% on March 22, 2023 and to 10% on March 22, 2027; payable quarterly
|
| Conversion right: | Beginning March 22, 2015, issuer can choose to convert interest rate to 6.5% for each subsequent interest payment date
|
| Price: | Par
|
| Payout at maturity: | Par
|
| Pricing date: | March 2
|
| Settlement date: | March 22
|
| Agent: | Morgan Stanley & Co. Inc.
|
| Fees: | 3.5%
|
| Cusip: | 61745E5X5
|
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