By Susanna Moon
Chicago, May 24 - Morgan Stanley priced $2.6 million of 0% knock-out notes due June 6, 2012 linked to the Philadelphia Oil Service Sector index, according to a 424B2 filing with the Securities and Exchange Commission.
J.P. Morgan Securities LLC is the dealer, and Morgan Stanley & Co. Inc. is the agent.
A knock-out event occurs if the index falls by more than 27% from its initial level during the life of the notes.
If a knock-out event does not occur, the payout at maturity will be par plus any index gain, with a contingent minimum return of 5%.
Otherwise, investors will receive par plus the index return, with exposure to losses.
The maximum payment will be $1,200 per each $1,000 principal amount.
| Issuer: | Morgan Stanley
|
| Issue: | Knock-out notes
|
| Underlying index: | Philadelphia Oil Service Sector
|
| Amount: | $2,597,000
|
| Maturity: | June 6, 2012
|
| Coupon: | 0%
|
| Price: | Par
|
| Payout at maturity: | If index never dips by more than 27%, par plus any gain, floor of 5%; otherwise, par plus return with exposure to losses; in either case, gains capped at 20%
|
| Initial index level: | 265.37
|
| Pricing date: | May 20
|
| Settlement date: | May 27
|
| Agents: | J.P. Morgan Securities LLC (dealer), Morgan Stanley & Co. Inc. (agent)
|
| Fees: | 1%
|
| Cusip: | 617482UK8
|
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