Published on 3/28/2013 in the Prospect News Structured Products Daily.
New Issue: Morgan Stanley prices $1.61 million contingent income securities tied to S&P 500, Russell
By Toni Weeks
San Luis Obispo, Calif., March 28 - Morgan Stanley priced $1.61 million of contingent income securities due March 28, 2028 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 will pay a monthly payment of 8.35% per year for the first three years. After that, the notes will pay a contingent coupon of 8.35% per year if the closing level of each index is at or above its respective coupon barrier level, 70% of its initial level, on the related observation date for that month. Otherwise, no coupon will be paid that month.
If the final level of each index is greater than or equal to its downside threshold level, 50% of its initial level, the payout at maturity will be par. If the final level of each index is also above the 70% coupon barrier level, the contingent monthly coupon will be paid as well. If the final level of either index is less than the downside threshold level, investors will be fully exposed to the decline of the worst-performing index from the initial level.
Morgan Stanley & Co. LLC is the agent.
Issuer: | Morgan Stanley
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Issue: | Contingent income securities
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Underlying indexes: | S&P 500, Russell 2000
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Amount: | $1.61 million
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Maturity: | March 28, 2028
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Coupon: | 8.35% per year for first three years; beginning April 2016, 8.35% per year if each index closes at or above coupon barrier level on observation date for that month; otherwise, no coupon for that month; payable monthly
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Price: | Par
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Payout at maturity: | If each index closes at or above downside threshold level, par; if each index closes at or above coupon barrier level; par plus coupon; full exposure to decline in worst-performing index if either index finishes below downside threshold level
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Initial index levels: | 949.82 for Russell, 1,563.77 for S&P 500
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Coupon barrier levels: | 664.874 for Russell, 1,094.639 for S&P 500, 70% of initial levels
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Downside threshold levels: | 474.91 for Russell, 781.885 for S&P 500, 50% of initial level
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Pricing date: | March 26
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Settlement date: | March 28
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Agent: | Morgan Stanley & Co. LLC
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Fees: | 3.5%
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Cusip: | 61761JEG0
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