Morgan Stanley plans contingent income autocallables on Bank of America

By Susanna Moon

Chicago, May 16 - Morgan Stanley plans to price contingent income autocallable securities due May 2017 with step-up redemption threshold level linked to Bank of America Corp. shares, according to an FWP filing with the Securities and Exchange Commission.

The notes will pay a contingent quarterly coupon at an annual rate of 8.35% if the stock closes at or above its 80% barrier level on the determination date for that quarter.

The notes will be called at par plus the contingent coupon if the stock closes at or above the redemption threshold level on any of the first 11 determination dates.

The redemption level will be 105% of the initial level for the first four determination dates, stepping up to 110% of the initial level for the next four determination dates and to 115% of the initial level for the final determination dates.

The payout at maturity will be par plus the final contingent coupon unless the stock finishes below the 80% barrier level, in which case investors will receive a number of Bank of America shares equal to par of $10.00 divided by the initial share price.

Morgan Stanley & Co. LLC is the agent. Morgan Stanley Wealth Management will handle distribution.

The notes will price and settle in May.

The Cusip number is 61761S240.

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