Morgan Stanley is planning to offer medium-term debt securities linked to a new Chicago Board Options Exchange index . The CBOE NASDAQ-100 BuyWrite Index measures the performance of a theoretical portfolio of stocks indexed to the NASDAQ100, plus covered calls sold on the index.
The structure follows sales last year by the firm of around USD600 million in securities linked to the CBOE BuyWrite Monthly Index and the Dow Jones Industrial Buy/Write Index, respectively tied to the Standard & Poor's 500 and Dow Jones Industrial indices, an official said. The firm has seen high U.S. demand from investors who would like to buy the index directly but cannot, because it is not publicly traded and transaction costs would be too high if it were.
The firm plans to offer 9% Targeted Income Strategic Total Return Securities on the BXN Index, starting next month. These USD10 notes, due Oct. 30, 2011, will be exchangeable for a cash amount at maturity based on the performance of the index itself, an official said.
