Morgan Stanley to price contingent income autocallables tied to BofA

By Marisa Wong

Madison, Wis., Feb. 7 - Morgan Stanley plans to price contingent income autocallable securities due February 2017 linked to the common stock of Bank of America Corp., according to an FWP filing with the Securities and Exchange Commission.

If Bank of America stock closes at or above the downside threshold level, 80% of the initial share price, on a quarterly determination date, the notes will pay a contingent payment of $0.25 per $10 note for that quarter. The payment is equivalent to 10% per year.

If the closing share price is greater than or equal to the applicable redemption threshold level on any of the first 11 quarterly determination dates, the notes will be automatically redeemed at par of $10 plus the contingent payment. The redemption threshold level is 105% of the initial share price for the first four determination dates, 110% of the initial price for the next four dates and 115% of the initial price for the last three dates.

If the notes are not called and the final share price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the contingent payment. Otherwise, the payout will be a number of Bank of America shares equal to $10 divided by the initial share price or, at the issuer's option, a cash amount equal to the value of those shares.

Morgan Stanley & Co. LLC is the agent.

The notes (Cusip: 61760S365) will price and settle in February.

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