By Susanna Moon
Chicago, Dec. 31 – Morgan Stanley priced $2.58 million of trigger phoenix autocallable optimization securities due Dec. 31, 2019 linked to Caterpillar Inc. shares, according to a 424B2 filing with the Securities and Exchange Commission.
If Caterpillar stock closes at or above the trigger level – 71.5% of the initial share price – on a monthly observation date, the notes will pay a contingent coupon for that month at the rate of 7%.
If the shares close at or above the initial price on a monthly observation date, the notes will be called at par plus the contingent coupon after one year.
If the notes are not called and Caterpillar shares finish at or above the trigger price, the payout at maturity will be par plus the contingent coupon.
Otherwise, investors will be fully exposed to any losses.
Morgan Stanley & Co. LLC is the underwriter with UBS Financial Services Inc. as dealer.
Issuer: | Morgan Stanley
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Issue: | Trigger phoenix autocallable optimization securities
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Underlying stock: | Caterpillar Inc. (NYSE: CAT)
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Amount: | $2,577,300
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Maturity: | Dec. 31, 2019
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Coupon: | 7%, payable monthly if stock closes at or above trigger price on observation date for that month
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Price: | Par of $10
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Payout at maturity: | Par plus contingent coupon if Caterpillar shares finish at or above trigger price; otherwise, par plus stock return
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Call: | At par plus contingent coupon if Caterpillar shares close at or above initial price on a monthly observation date beginning Dec. 29, 2015
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Initial share price: | $93.71
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Trigger price: | $67.00, 71.5% of initial price
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Pricing date: | Dec. 29
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Settlement date: | Dec. 31
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Underwriter: | Morgan Stanley & Co. LLC with UBS Financial Services Inc.
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Fees: | 2.5%
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Cusip: | 61764M497
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