PROSPECTUS Dated March 29, 1995 Pricing Supplement No. 17 to
PROSPECTUS SUPPLEMENT Registration Statement No. 33-57833
Dated March 29, 1995 August 30, 1995
Rule 424(b)(3)
Morgan Stanley Group Inc.
MEDIUM-TERM NOTES, SERIES C
Senior Fixed Rate Notes
________________
The Medium-Term Notes, Series C (Senior Fixed Rate Notes) (the "Rupee Linked
Notes") will mature on the Maturity Date and will not pay interest prior to
the Maturity Date. The amount payable on the Maturity Date (the "Payment
Amount") will be determined pursuant to a formula that depends on the change,
if any, over the term of the Rupee Linked Notes in the value of the Indian
Rupee as compared to the United States Dollar, as described more fully below
under "Other Provisions -- Payment Amount".
Morgan Stanley Group Inc. (the "Company") will cause the Rupee/Dollar Exchange
Rate to be determined by Morgan Stanley & Co. Incorporated ("MS & Co.") for
the Trustee, based upon which the Trustee shall calculate the Payment Amount
as described below.
INVESTORS IN THE RUPEE LINKED NOTES ARE SUBJECT TO EXCHANGE RATE FLUCTUATIONS
OVER THE TERM OF THE RUPEE LINKED NOTES BETWEEN THE INDIAN RUPEE AND THE
UNITED STATES DOLLAR. CONSEQUENTLY, THE PAYMENT AMOUNT OF A RUPEE LINKED NOTE
PAYABLE ON THE MATURITY DATE MAY BE LESS THAN THE ISSUE PRICE OF SUCH NOTE,
BUT MAY NOT BE LESS THAN ZERO.
An investment in the Rupee Linked Notes entails significant risks not
associated with similar investments in a conventional debt security, as further
described below and as described under "Description of Notes -- Notes Linked
to Commodity Prices, Equity Indices or Other Factors" and "Foreign Currency
Risks -- Exchange Rates and Exchange Controls" in the accompanying Prospectus
Supplement.
The Rupee Linked Notes will not be redeemable in whole or in part prior to the
Maturity Date.
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<S> <C> <C> <C>
Principal Amount: $2,000,000 Redemption Dates: N/A
Maturity Date: June 26, 1996 Redemption Percentage: N/A
Interest Rate: N/A Annual Redemption
Percentage Reduction: N/A
Interest Accrual Date: N/A
Interest Payment Period: N/A
Other Provisions:
Specified Currency: U.S. Dollars
Payment Amount: The Payment Amount due on the Maturity Date Issue Price: 100%
shall be an amount in U.S. Dollars calculated by the
Trustee in accordance with the following formula: Settlement Date
(Original Issue Date): September 5, 1995
Payment Amount = 114.25% x Principal Amount x Book Entry Note or
FX1/FX2 Subordinated Note: Book Entry Note
Senior Note or Senior Note
Subordinated Note:
FX1: 31.41 (The Rupee/Dollar exhange reference rate as
of June 16, 1995 as shown on Reuter's Page Total Amount of OID: N/A
"RBIB" under the caption "RBI Reference Rate
USD = Rs")
FX2: The Rupee/Dollar Exchange Rate (at which a
Reference Dealer is willing to purchase Indian Original Yield to Maturity: N/A
Rupees and sell U.S. Dollars) two Exchange Rate
Days prior to the Maturity Date. Initial Accrual Period OID: N/A
Rupee/Dollar Exchange The exchange rate on any day between the Indian Trustee: Chemical Bank
Rate: Rupee and the U.S. Dollar shall be determined by
MS & Co. for the Trustee by obtaining the
Rupee/Dollar Exchange Rate (at which a Reference
Dealer is willing to purchase Indian Rupees and sell
U.S. Dollars) for such day from three Reference
Dealers (or if quotes are unavailable from three
Reference Dealers, from two such dealers) and
calculating the arithmetic mean of such quotes;
provided that if MS & Co. is unable to obtain such
quotes from at least two Reference Dealers, then it
shall obtain the Rupee/Dollar Exchange Rate for
such day from Reuter's Page "RBIB" (or any
successor page) under the caption "Selling" at
approximately 11:00 A.M. New York time (the
"Reuter's Quote"); provided further that if no
Reuter's Quote is shown for such day, MS & Co.
shall obtain from the Reserve Bank of India the
Rupee/Dollar exchange reference rate as quoted for
commercial transactions (the "RBI Quote") for such
day or, if no RBI Quote is available for such day,
for the next preceding day for which an RBI Quote
is available. The Issuer shall cause MS & Co. to
provide written notice to the Trustee at its New
York Office of the Rupee/Dollar Exchange Rate
equal to FX2 promptly on the opening of business
New York time on the Business Day immediately
preceding the Maturity Date.
Exchange Rate Day: A New York Business Day which is also a business
day in Bombay, India
Reference Dealers: Standard Chartered Bank (New York), State Bank
of India (New York) and Bank of America (San
Francisco), or if any of such Reference Dealers are
not quoting the Rupee/Dollar Exchange Rate on the
applicable Exchange Rate Day, any other leading
foreign exchange dealer selected by MS & Co.
Recent Rupee/Dollar The Rupee declined consistently against the U.S.
Exchange Rates: Dollar from 1982 to 1992. In early July 1991, the
Indian Government adjusted the Rupee downward
by approximately 20% against the U.S. Dollar.
This was undertaken as part of an economic package
designed to overcome economic and foreign
exchange problems.
Through February 29, 1992, the official value of
the Rupee was determined by the Reserve Bank of
India (the "RBI") in relation to a weighted basket of
currencies of India's major trading partners. In the
February 1992 budget, a new dual exchange rate
mechanism was introduced to make the Rupee
"partially convertible" by permitting conversion of
60% of the foreign exchange received on a trade or
revenue account at a market determined rate and the
remaining 40% at the official rate. All importers
were, however, required to buy foreign exchange at
the market rate. The Rupee was permitted to float
fully and made convertible on a trade or revenue
account in March 1993 and on the current account
in August 1994. Although there is no official policy
to maintain steady exchange rates, the RBI has
actively intervened in the currency market. Such
intervention may or may not continue in the future.
The following table sets forth the closing values of
the market-determined Rupee/Dollar exchange
reference rates on the last business day of the last
full week of each month for the periods indicated,
as derived from Bloomberg's "Close/Value Table".
(Since the Rupee was permitted to float partially and
made convertible on trade and revenue accounts in
March 1993, there have been no officially
established exchange rates quoted by the RBI.)
These historical rates should not be taken as an
indication of future performance, and no assurance
can be given as to the level of the Rupee/Dollar
Exchange Rate as of two Exchange Rate Days prior
to the Maturity Date.
Month Closing Value
_____ _____________
1993
____
January 29.226
February 30.200
March 31.772
April 31.674
May 31.721
June 31.626
July 31.550
August 31.656
September 31.380
October 31.454
November 31.466
December 31.504
1994
____
January 31.485
February 31.434
March 31.453
April 31.418
May 31.390
June 31.390
July 31.392
August 31.368
September 31.375
October 31.375
November 31.368
December 31.378
1995
____
January 31.380
February 31.415
March 31.415
April 31.400
May 31.400
June 31.397
July 31.410
August 31.670
Exchange Controls: The Foreign Exchange (Regulation) Act of 1973, as
amended ("FERA") provides the statutory
framework for Indian foreign exchange control.
Through it the Indian Government exercises its
policy with respect to foreign private investment in
India and all dealings by residents of India with
non-residents and foreign currency. Without
permission (general or special) from the RBI,
residents of India cannot undertake any transaction
with persons outside India, sell, buy, lend or
borrow foreign exchange, issue or transfer securities
to non-residents, or acquire or dispose of any
foreign security. In the past, the Indian
Government has used its authority under FERA to
restrict foreign private investment in India.
Investment by non-residents and foreigners in the
securities of Indian companies has been tightly
controlled for many years by FERA, although
recent regulations have lifted the restrictions in
several significant respects.* Investors should be
aware that such controls could limit their ability to
hedge their investment in the Rupee Linked Notes
by means of strategies involving purchases or sales
of Rupees or Indian securities.
* The information presented in the preceding
sentences of this paragraph has been extracted from
publicly available documents which have not been
prepared or independently verified by the Company
or any of its affiliates or advisers.
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Capitalized terms not defined above have the meanings given to such terms in
the accompanying Prospectus Supplement.
MORGAN STANLEY & CO.
Incorporated
