Subject to Completion, Pricing Supplement dated February 14, 1996
PROSPECTUS Dated March 29, 1995 Pricing Supplement No. 43 to
PROSPECTUS SUPPLEMENT Registration Statement No. 33-57833
Dated March 29, 1995 March , 1996
Rule 424(b)(3)
$ ,000,000
Morgan Stanley Group Inc.
GLOBAL MEDIUM-TERM NOTES, SERIES D
EURO FIXED RATE SENIOR BEARER CASH EXCHANGEABLE NOTES
DUE MARCH , 2002
Exchangeable for an Amount in U.S. Dollars
Determined by Reference to the Market Price
of the Ordinary Shares of the
DAIMLER-BENZ CORPORATION
The Global Medium-Term Notes, Series D (Euro Fixed Rate Senior Bearer Cash
Exchangeable Notes Due March , 2002) described in this Pricing Supplement
(the "Notes") will not be redeemable at the option of Morgan Stanley Group
Inc. (the "Company") prior to the Maturity Date other than as described below
or under the circumstances described under "Description of Notes - Tax
Redemption" in the accompanying Prospectus Supplement.
The Notes will be issued only in bearer form, which form is further described
under "Description of Notes - Forms, Denominations, Exchange and Transfer" in
the accompanying Prospectus Supplement. Notes in bearer form will not be
exchangeable at any time for Notes in registered form at the option of the
holder.
The Notes will bear interest at the rate of % per annum payable annually on
March of each year (each an "Interest Payment Date") commencing March ,
1997. The Notes will be issued in minimum denominations of $1,000 and will
mature on March , 2002.
On any Exchange Date (as defined herein), the holder of a Note will have the
right (the "Exchange Right"), upon completion by the holder and acknowledgment
by the Company and the Calculation Agent of an Official Notice of Exchange
prior to 11:00 a.m. London time on such date, to exchange each $1,000
principal amount of such Note for an amount in U.S. Dollars equal to the
Market Price (as defined herein) on such date of ordinary shares (as
further defined herein, the "Share Exchange Ratio") of Daimler-Benz
Corporation ("Daimler-Benz") converted into U.S. Dollars at the Currency
Exchange Rate (as defined herein) on such date. The Share Exchange Ratio will
be adjusted for certain corporate events. See "Adjustments to Share Exchange
Ratio" in this Pricing Supplement. An Exchange Date will be any day that is
both a London Stock Exchange Trading Day and a Frankfurt Stock Exchange
Trading Day (each as defined herein) that falls during the period beginning 30
days after the Original Issue Date and ending on the day prior to the earlier
of the Maturity Date and any redemption date.
On or after March , 1998, the Company may call the Notes, in whole but not in
part, upon not less than 30 nor more than 60 days notice, at a redemption
price equal to the principal amount thereof plus accrued and unpaid interest
to but not including the redemption date.
Daimler-Benz is neither affiliated with the Company nor involved in this
offering of the Notes. The Market Price of the Ordinary Shares (as defined
herein) on the date of this Pricing Supplement converted into U.S. Dollars at
the rate of DM per $1 was $ (the "Initial U.S. Dollar Market Price").
The Company will cause any adjustments to the Share Exchange Ratio to be
determined by the Calculation Agent for Chemical Bank, as Trustee under the
Senior Debt Indenture.
The Notes are further described below and in the Prospectus Supplement under
"Description of Notes - Fixed Rate Notes" and "- Notes Linked to Commodity
Prices, Equity Indices or Other Factors."
An investment in the Notes entails risks not associated with similar
investments in a conventional debt security, as described under "Risk Factors"
on PS-4 and PS-5 herein.
Application will be made to list the Notes on the London Stock Exchange. It
is not possible to know whether the Notes will trade in the secondary market
or if such market will be liquid or illiquid.
PRICE %
Agent's
Price to Public Commissions(1) Proceeds to Company
----------------- ---------------- ---------------------
Per Note... % % %
Total...... $ $ $
_______________
(1) The Company has agreed to indemnify the Agent against certain liabilities,
including liabilities under the Securities Act of 1933.
MORGAN STANLEY & CO.
International
Information contained in this preliminary pricing supplement is subject to
completion or amendment. These securities may not be delivered prior to
the time a final pricing supplement is delivered. This pricing supplement
and the accompanying prospectus and prospectus supplement shall not
constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
Capitalized terms not defined herein have the meanings given to such terms in
the accompanying Prospectus Supplement.
Principal Amount:.............. $ ,000,000
Maturity Date:................. March , 2002
Specified Currency:............ U.S. Dollars. Unless other specified, in
this Pricing Supplement all references to (i)
"$" are to U.S. Dollars and (ii) "marks" or
"DM" are to the German mark, the legal
currency of the Federal Republic of Germany.
Interest Rate:................. % per annum
Interest Payment Dates:........ March in each year, commencing March ,
1997
Issue Price:................... 100%
Original Issue Date
(Settlement Date):........... March , 1996
Senior Note or Subordinated
Note:......................... Senior
Minimum Denominations:......... $1,000
Trustee:....................... Chemical Bank, N.A. (London branch)
Clearing:...................... Euroclear/Cedel
Common Code:...................
ISIN:..........................
Exchange Right:................ On any Exchange Date, the holders of Notes
will be entitled upon completion by the
holder and acknowledgment by the Company and
the Calculation Agent of an Official Notice
of Exchange (in the form of Annex A attached
hereto) prior to 11:00 a.m. London time on
such date and delivery on such date of such
Notes to the Trustee, to exchange each $1,000
principal amount of Notes for an amount in
U.S. Dollars equal to the Market Price on
such date of Ordinary Shares (the
"Share Exchange Ratio ") of Daimler-Benz,
subject to adjustment as described under
"Adjustments to the Share Exchange Ratio"
below, converted into U.S. Dollars at the
Currency Exchange Rate on such date. Upon
the exercise of such Exchange Right, holders
of such exchanged Notes shall not be entitled
to receive accrued but unpaid interest
thereon. Such payment will be made 3
Business Days after any Exchange Date,
subject to delivery of such Notes to the
Trustee on the Exchange Date. If the Notes
are represented by a global note, such notice
of exchange may be given by the holder of a
Note to the Company via Euroclear and/or
Cedel, as the case may be, in such manner and
at such time as the Company and Euroclear
and/or Cedel, as the case may be, may approve
for this purpose.
The Company shall, or shall cause the
Calculation Agent to, deliver such cash to
the Trustee for delivery to the holders.
Share Exchange Ratio........... , subject to adjustment for
certain corporate events. See "Adjustments
to Share Exchange Ratio" below.
Exchange Date.................. Any day that is both a London Stock Exchange
Trading Day and a Frankfurt Stock Exchange
Trading Day and that falls during the period
beginning 30 days after the Original Issue
Date and ending on the day prior to the
earlier of the Maturity Date and any
redemption date.
Redemption of the Notes........ The Notes are not redeemable at the option of
the Company prior to the Maturity Date other
than as described below or under the
circumstances described under "Description of
Notes - Tax Redemption" in the accompanying
Prospectus Supplement. On or after March ,
1998, the Company may redeem the Notes, in
whole but not in part, upon not less than 30
nor more than 60 days notice, at a redemption
price equal to 100% of the principal amount
thereof plus accrued and unpaid interest to
but not including the redemption date.
Notice of any such redemption will be given
as described under "Optional Redemption" in
the accompanying Prospectus Supplement. If
the Notes are so called for redemption, the
cash to be delivered to holders of Notes will
be delivered on the redemption date. The
Company shall, or shall cause the Calculation
Agent to, deliver such cash to the Trustee
for delivery to the holders. Holders of the
Notes will continue to be entitled to
exercise the Exchange Right, as described
under "Exercise Right" above, until 11:00
a.m. London time on the Exchange Date
immediately preceding the redemption date.
Market Price:.................. The Market Price for any Exchange Date means
the official closing price for the Ordinary
Shares as reported by the Frankfurt Stock
Exchange. If the official closing price is
not available pursuant to the preceding
sentence, the Market Price for any Exchange
Date shall be the mean, as determined by the
Calculation Agent, of the bid prices for the
Ordinary Shares obtained from as many dealers
in such shares, but not exceeding three, as
will make such bid prices available to the
Calculation Agent after 1:30 p.m. Frankfurt
time on such Exchange Date.
Ordinary Shares:............... The ordinary shares, nominal value DM 50 per
share, of Daimler-Benz.
Currency Exchange Rate:........ For any Exchange Date, the Currency Exchange
Rate between the mark and the U.S. Dollar
shall be determined by the Calculation Agent
by obtaining the mark/U.S. Dollar Exchange
Rate for such day from Reuter's Page "WMRH"
(or, any successor page) at approximately
4:00 p.m. London time (the "Reuter's Quote");
provided that if no Reuter's Quote is shown
for such day, the Currency Exchange Rate
between the mark and the U.S. Dollar shall
be determined by the Calculation Agent by
obtaining the mark/U.S. Dollar Exchange Rate
(at which a leading foreign exchange dealer
selected by the Calculation Agent (a
"Reference Dealer") is willing to purchase
marks and sell U.S. dollars) for such day
from three Reference Dealers at approximately
4:30 p.m. London time (or if quotes are
unavailable from three Reference Dealers,
from two such dealers) and calculating the
arithmetic mean of such quotes.
Frankfurt Stock Exchange
Trading Day:................. A day on which trading is generally
conducted on the Frankfurt Stock Exchange, as
determined by the Calculation Agent and on
which a Market Disruption Event has not
occurred.
London Stock Exchange Trading
Day:......................... A day on which trading is generally
conducted on the London Stock Exchange
Limited (the "London Stock Exchange"), as
determined by the Calculation Agent.
Calculation Agent:............. Morgan Stanley & Co. International Limited
("MS & Co International").
Because the Calculation Agent is an affiliate
of the Company, potential conflicts of
interest may exist between the Calculation
Agent and the holders of the Notes, including
with respect to certain determinations and
judgments that the Calculation Agent must make
in making adjustments to the Share Exchange
Ratio or determining the Market Price or the
Currency Exchange Rate or whether a Market
Disruption Event has occurred. See "Currency
Exchange Rate" above and "Adjustment to the
Share Exchange Ratio" and "Market Disruption
Event" below. MS & Co. International is
obligated to carry out its duties and
functions as Calculation Agent in good faith
and using its reasonable judgment.
Risk Factors:.................. An investment in the Notes entails
significant risks not associated with similar
investments in a conventional debt security,
including the following:
The Company is not affiliated with
Daimler-Benz and, although the Company as of
the date of this Pricing Supplement does not
have any material non-public information
concerning Daimler-Benz, corporate events of
Daimler-Benz, including those described below
in "Adjustments to the Share Exchange Ratio,"
are beyond the Company's ability to control
and are difficult to predict.
Daimler-Benz is not involved in the offering
of the Notes and has no obligations with
respect to the Notes, including any
obligation to take the interests of the
Company or of holders of Notes into
consideration for any reason. Daimler-Benz
will not receive any of the proceeds of the
offering of the Notes made hereby and is not
responsible for, and has not participated in,
the determination of the timing of, prices
for or quantities of, the Notes offered
hereby.
There can be no assurance as to how the Notes
will trade in the secondary market or whether
such market will be liquid or illiquid. At
issuance, the Notes will be listed on the
London Stock Exchange. However, there can be
no assurance that the Notes will not later be
delisted or that trading in the Notes on the
London Stock Exchange will not be suspended.
In the event of a delisting or suspension of
trading in the Notes, the Company will use
its best efforts to list the Notes on another
securities exchange. The Notes will not be
redeemable as a result of any such delisting
or suspension of trading. If the Notes are
not listed or traded on any securities
exchange or if trading of the Notes is
suspended, pricing information for the Notes
may be more difficult to obtain, and the
liquidity and market prices of the Notes may
be adversely affected.
The market value for the Notes will be
affected by a number of factors independent
of the creditworthiness of the Company and the
value of the Ordinary Shares, including, but
not limited to, the volatility of the
Ordinary Shares, the dividend rate on the
Ordinary Shares, Daimler-Benz's financial
results and prospects, market interest and
yield rates, the mark/U.S. Dollar exchange
rate and the time remaining to any redemption
date or the Maturity Date. In addition, the
value of the Ordinary Shares depends on a
number of interrelated factors, including
economic, financial and political events in
Germany and elsewhere, including factors
affecting capital markets generally, the
stock exchanges on which the Ordinary Shares
are traded and the market segment of which
Daimler-Benz is a part. The market value of
the Notes is expected to depend in part on
the extent of the appreciation, if any, of
the U.S. Dollar equivalent of the Market
Price of the Ordinary Shares above the
Initial U.S. Dollar Market Price. The price
at which a holder will be able to sell Notes
prior to maturity may be at a discount, which
could be substantial, from the accreted
principal amount thereof, if, at such time,
the U.S. Dollar equivalent of the Market
Price of the Ordinary Shares is below, equal
to or not sufficiently above the Initial U.S.
Dollar Market Price. The historical Market
Prices of the Ordinary Shares should not be
taken as an indication of the Ordinary
Shares's future performance during the term
of any Note.
In order to exercise the Exchange Right, a
holder of the Notes must complete an Official
Notice of Exchange prior to the time at which
the Market Price and the Currency Exchange
Right with respect to such exercise will be
determined. Consequently, such holder will
not be able to determine, at the time of
completing such Official Notice of Issuance,
the exact amount due, upon such exercise.
Fluctuations in the exchange rate between the
mark and the U.S. dollar will affect the U.S.
Dollar equivalent of the Market Price of the
Ordinary Shares on the Frankfurt Stock
Exchange and, as a result, may consequently
affect the market value of the Notes. See
"Currency Exchange Rates" and "Historical
Currency Exchange Rates."
Because the Calculation Agent is an affiliate
of the Company, potential conflicts of
interest may exist between the Calculation
Agent and the holders of the Notes, including
with respect to certain adjustments to the
Share Exchange Ratio that may influence the
amount of cash receivable upon exercise of
the Exchange Right. See "Adjustments to the
Share Exchange Ratio" and "Market Disruption
Event."
It is suggested that prospective investors
who consider purchasing the Notes should
reach an investment decision only after
carefully considering the suitability of the
Notes in light of their particular
circumstances.
Investors should also consider the tax
consequences of investing in the Notes. See
"United States Federal Taxation - Foreign
Holders" in the accompanying Prospectus
Supplement.
Adjustments to the Share
Exchange Ratio:............. The Share Exchange Ratio will be
adjusted as follows:
1. If the Ordinary Shares are subject to a
stock split or reverse stock split, then once
such split has become effective, the Share
Exchange Ratio will be adjusted to equal the
product of the prior Share Exchange Ratio and
the number of shares issued in such stock
split or reverse stock split with respect to
one Ordinary Share.
2. If the Ordinary Shares are subject to a
stock dividend (issuance of additional
Ordinary Shares) that is given ratably to all
holders of Ordinary Shares, then once the
dividend has become effective and the
Ordinary Shares are trading ex-dividend, the
Share Exchange Ratio will be adjusted so that
the new Share Exchange Ratio shall equal the
prior Share Exchange Ratio plus the product
of (i) the number of shares issued with
respect to one Ordinary Share and (ii) the
prior Share Exchange Ratio.
3. There will be no adjustments to the
Share Exchange Ratio to reflect cash
dividends or other distributions paid with
respect to the Ordinary Shares other than
distributions described in paragraphs 1 or
2 above or in clause (v) of paragraph 5 below
and Extraordinary Dividends as described
below. A cash dividend or other distribution
with respect to the Ordinary Shares will be
deemed to be an "Extraordinary Dividend" if
such dividend or other distribution exceeds
the immediately preceding non-Extraordinary
Dividend for the Ordinary Shares by an amount
equal to at least 10% of the Market Price of
the Ordinary Shares on the Frankfurt Stock
Exchange Trading Day preceding the
ex-dividend date for the payment of such
Extraordinary Dividend (the "ex-dividend
date"). If an Extraordinary Dividend occurs
with respect to the Ordinary Shares, the
Share Exchange Ratio with respect to the
Ordinary Shares will be adjusted on the
ex-dividend date with respect to such
Extraordinary Dividend so that the new Share
Exchange Ratio will equal the product of (i)
the then current Share Exchange Ratio and
(ii) a fraction, the numerator of which is
the Market Price on the Frankfurt Stock
Exchange Trading Day preceding the ex-dividend
date, and the denominator of which is the
amount by which the Market Price on the
Frankfurt Stock Exchange Trading Day
preceding the ex-dividend date exceeds the
Extraordinary Dividend Amount. The
"Extraordinary Dividend Amount" with respect
to an Extraordinary Dividend for the Ordinary
Shares will equal (i) in the case of cash
dividends or other distributions that
constitute annual dividends, the amount per
share of such Extraordinary Dividend minus
the amount per share of the immediately
preceding non-Extraordinary Dividend for the
Ordinary Shares or (ii) in the case of cash
dividends or other distributions that do not
constitute annual dividends, the amount per
share of such Extraordinary Dividend. To the
extent an Extraordinary Dividend is not paid
in cash, the value of the non-cash component
will be determined by the Calculation Agent,
whose determination shall be conclusive. A
distribution on the Ordinary Shares described
in clause (v) of paragraph 5 below that also
constitutes an Extraordinary Dividend shall
only cause an adjustment to the Share
Exchange Ratio pursuant to clause (v) of
paragraph 5.
4. If Daimler-Benz issues rights or warrants
to all holders of Ordinary Shares to
subscribe for or purchase Ordinary Shares at
an exercise price per share less than the
Market Price of the Ordinary Shares on (i)
the date the exercise price of such rights or
warrants is determined and (ii) the
expiration date of such rights or warrants,
and if the expiration date of such rights or
warrants precedes the maturity of the Notes,
then the Share Exchange Ratio will be
adjusted to equal the product of the prior
Share Exchange Ratio and a fraction, the
numerator of which shall be the number of
Ordinary Shares outstanding on the date of
issuance of such rights or warrants,
immediately prior to such issuance, plus the
number of additional Ordinary Shares offered
for subscription or purchase pursuant to such
rights or warrants and the denominator of
which shall be the number of Ordinary Shares
outstanding on the date of issuance of such
rights or warrants, immediately prior to such
issuance, plus the number of additional
Ordinary Shares which the aggregate offering
price of the total number of Ordinary Shares
so offered for subscription or purchase
pursuant to such rights or warrants would
purchase at the Market Price on the
expiration date of such rights or warrants,
which shall be determined by multiplying such
total number of shares offered by the
exercise price of such rights or warrants and
dividing the product so obtained by such
Market Price.
5. If (i) there occurs any reclassification
or change of Ordinary Shares, (ii)
Daimler-Benz, or any surviving entity or
subsequent surviving entity of Daimler-Benz
(an "Daimler-Benz Successor") has been
subject to a merger, combination or
consolidation and is not the surviving
entity, (iii) any statutory exchange of
securities of Daimler-Benz or any
Daimler-Benz Successor with another
corporation occurs (other than pursuant to
clause (ii) above), (iv) Daimler-Benz is
liquidated, (v) Daimler-Benz issues to all of
its shareholders equity securities of an
issuer other than Daimler-Benz (other than in
a transaction described in clauses (ii),
(iii) or (iv) above) (a "Spin-off Event") or
(vi) a tender or exchange offer is
consummated for all or some of the
outstanding Ordinary Shares by Daimler-Benz
(any such event in clauses (i) through (vi) a
"Reorganization Event"), the method of
determining the amount payable upon exchange
at maturity for each Note will be adjusted to
provide that each holder of Notes will
receive at maturity, in respect of the
principal amount of each Note, an amount in
cash equal to the product of (x) the Share
Exchange Ratio and (y) the Transaction Value
(as defined below) of any securities, cash or
any other assets distributed in any such
Reorganization Event, including, in the case
of a Spin-off Event, the Ordinary Share with
respect to which the spun-off security was
issued (collectively, the "Exchange
Property"); provided that, if upon
consummation of any such Reorganization Event
the Exchange Property consists only of cash,
the maturity date of the Notes will be deemed
to be accelerated to the date on which such
cash is distributed to holders of Ordinary
Shares; and provided further, that in the
event of a partial tender or exchange offer by
Daimler-Benz with respect to the Ordinary
Shares, the Exchange Property will be deemed
to include cash or other property paid by
Daimler-Benz in the tender or exchange offer
in an amount determined as if Daimler-Benz
had purchased or exchanged Ordinary Shares in
the proportion in which all Ordinary Shares
were purchased or exchanged from the holders
thereof. "Transaction Value" means (i) for
any cash received in any such Reorganization
Event, the amount of cash received per
Ordinary Share, (ii) for any property other
than cash or securities received in any such
Reorganization Event, the market value of
such Exchange Property received for each
Ordinary Share at the date of the receipt of
such Exchange Property, as determined by the
Calculation Agent and (iii) for any security
received in any such Reorganization Event, an
amount equal to the Market Price per share of
such security at the maturity of the Notes
multiplied by the quantity of such security
received for each Ordinary Share.
For purposes of paragraph 5 above, in the
case of a consummated tender or exchange
offer by Daimler-Benz for all Exchange
Property of a particular type, Exchange
Property shall be deemed to include the
amount of cash or other property paid by
Daimler-Benz in the tender or exchange offer
with respect to such Exchange Property (in
an amount determined on the basis of the rate
of exchange in such tender or exchange
offer). In the event of a tender or exchange
offer with respect to Exchange Property in
which an offeree may elect to receive cash or
other property, Exchange Property shall be
deemed to include the kind and amount of cash
and other property received by offerees who
elect to receive cash.
No adjustments to the Share Exchange Ratio
will be required unless such adjustment would
require a change of at least 0.1% in the Share
Exchange Ratio then in effect. The Share
Exchange Ratio resulting from any of the
adjustments specified above will be rounded
to the nearest one thousandth with five
ten-thousandths being rounded upward.
No adjustments to the Share Exchange Ratio
will be mandatorily required other than those
specified above. However, the Company may,
at its sole discretion, cause the Calculation
Agent to make additional adjustments to the
Share Exchange Ratio to reflect changes
occurring in relation to the Ordinary Shares
or any other Exchange Property in other
circumstances where the Company determines
that it is appropriate, but only in order to
reflect such changes, and not with the aim of
spreading investment risk. The adjustments
specified above do not cover all events that
could affect the Market Price of the Ordinary
Shares.
The Calculation Agent shall be solely
responsible for the determination and
calculation of any adjustments to the Share
Exchange Ratio and of any related
determinations, calculations or valuations
with respect to any distributions of stock,
other securities or other property or assets
(including cash) in connection with any
corporate event described in paragraph 5
above, and its determinations, calculations
and valuations with respect thereto shall be
conclusive.
The Calculation Agent will provide
information as to any adjustments to the
Share Exchange Ratio upon written request by
any holder of the Notes.
Market Disruption Event:....... "Market Disruption Event" means, with respect
to the Ordinary Shares:
(i) a suspension, absence or material
limitation of trading of the Ordinary Shares
on the primary market for the Ordinary Shares
for more than two hours of trading or during
the one-half hour period preceding the close
of trading in such market; or the suspension
or material limitation on the primary market
for trading in options contracts related to
the Ordinary Shares, if available, during the
one-half hour period preceding the close of
trading in the applicable market, in each
case as determined by the Calculation Agent
in its sole discretion; and
(ii) a determination by the Calculation
Agent in its sole discretion that the event
described in clause (i) above materially
interfered with the ability of the Company or
any of its affiliates to unwind all or a
material portion of the hedge with respect to
the Notes.
For purposes of determining whether a Market
Disruption Event has occurred: (1) a
limitation on the hours or number of days of
trading will not constitute a Market
Disruption Event if it results from an
announced change in the regular business
hours of the relevant exchange, (2) a
decision to permanently discontinue trading
in the relevant contract will not constitute
a Market Disruption Event, (3) a suspension
of trading in an options contract on the
Ordinary Shares by the primary securities
market trading in such options, if available,
by reason of (x) a price change exceeding
limits set by such securities exchange or
market, (y) an imbalance of orders relating
to such contracts or (z) a disparity in bid
and ask quotes relating to such contracts
will constitute a suspension or material
limitation of trading in options contracts
related to the Ordinary Shares and (4) an
"absence of trading" on the primary securities
market on which options contracts related to
the Ordinary Shares are traded will not
include any time when such securities market
is itself closed for trading under ordinary
circumstances.
Daimler-Benz; Ordinary Shares;
Public Information............. According to publicly available documents,
Daimler-Benz, a corporation organized under
the laws of Germany, is engaged, together
with its subsidiaries, in manufacturing
passenger cars, commercial vehicles, rail
systems, energy systems, aircraft, space
systems, defense and civil systems and is
also engaged in information technology
services. The Ordinary Shares (and related
American depositary shares) are registered
under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Companies with
securities registered under the Exchange Act
are required to file periodically certain
financial and other information specified by
the Securities and Exchange Commission (the
"Commission"). Information provided to or
filed with the Commission is available at the
offices of the Commission specified under
"Available Information" in the accompanying
Prospectus. In addition, information
regarding Daimler-Benz may be obtained from
other sources including, but not limited to,
press releases, newspaper articles and other
publicly disseminated documents. The Company
makes no representation or warranty as to the
accuracy or completeness of such reports.
Such information is not incorporated by
reference herein.
THIS PRICING SUPPLEMENT RELATES ONLY TO THE
NOTES OFFERED HEREBY AND DOES NOT RELATE TO
THE ORDINARY SHARES OR OTHER SECURITIES OF
DAIMLER-BENZ. ALL DISCLOSURES CONTAINED IN
THIS PRICING SUPPLEMENT REGARDING
DAIMLER-BENZ ARE DERIVED FROM THE PUBLICLY
AVAILABLE DOCUMENTS DESCRIBED IN THE PRECEDING
PARAGRAPH. NEITHER THE COMPANY NOR THE AGENT
HAS PARTICIPATED IN THE PREPARATION OF SUCH
DOCUMENTS OR MADE ANY DUE DILIGENCE INQUIRY
WITH RESPECT TO THE INFORMATION PROVIDED
THEREIN. NEITHER THE COMPANY NOR THE AGENT
MAKES ANY REPRESENTATION THAT SUCH PUBLICLY
AVAILABLE DOCUMENTS OR ANY OTHER PUBLICLY
AVAILABLE INFORMATION REGARDING DAIMLER-BENZ
ARE ACCURATE OR COMPLETE. FURTHERMORE, THERE
CAN BE NO ASSURANCE THAT ALL EVENTS OCCURRING
PRIOR TO THE DATE HEREOF (INCLUDING EVENTS
THAT WOULD AFFECT THE ACCURACY OR
COMPLETENESS OF THE PUBLICLY AVAILABLE
DOCUMENTS DESCRIBED IN THE PRECEDING
PARAGRAPH) THAT WOULD AFFECT THE TRADING
PRICE OF THE ORDINARY SHARES (AND THEREFORE
THE INITIAL U.S. DOLLAR MARKET PRICE AND THE
SHARE EXCHANGE RATIO) HAVE BEEN PUBLICLY
DISCLOSED. SUBSEQUENT DISCLOSURE OF ANY SUCH
EVENTS OR THE DISCLOSURE OF OR FAILURE TO
DISCLOSE MATERIAL FUTURE EVENTS CONCERNING
DAIMLER-BENZ COULD AFFECT THE VALUE RECEIVED
ON ANY EXCHANGE DATE WITH RESPECT TO THE
NOTES AND THEREFORE THE TRADING PRICES OF THE
NOTES.
NEITHER THE COMPANY NOR ANY OF ITS AFFILIATES
MAKES ANY REPRESENTATION TO ANY PURCHASER OF
NOTES AS TO THE PERFORMANCE OF THE ORDINARY
SHARES.
The Company or its affiliates may presently
or from time to time engage in business with
Daimler-Benz including extending loans to,
or making equity investments in, Daimler-Benz
or providing advisory services to
Daimler-Benz, including merger and acquisition
advisory services. In the course of such
business, the Company or its affiliates may
acquire non-public information with respect to
Daimler-Benz and, in addition, one or more
affiliates of the Company may publish
research reports with respect to
Daimler-Benz. The Company does not make any
representation to any purchaser of Notes with
respect to any matters whatsoever relating to
Daimler-Benz. Any prospective purchaser of a
Note should undertake an independent
investigation of Daimler-Benz as in its
judgment is appropriate to make an informed
decision with respect to an investment in the
Ordinary Shares.
Historical Information......... According to publicly available documents,
the capital stock of Daimler-Benz consists
solely of Ordinary Shares with a nominal
value of DM 50 each, which are issued only in
bearer form. The principal trading market of
the Ordinary Shares is the Frankfurt Stock
Exchange. The Ordinary Shares are also
traded on the other German stock exchanges in
Berlin, Bremen, Dusseldorf, Hamburg,
Hannover, Munchen and Stuttgart and on the
stock exchanges of Basel, Geneva, Zurich,
London, Paris, Tokyo and Vienna.
The following table sets forth the high and
low closing sales prices and average daily
volume for the Ordinary Shares on the
Frankfurt Stock Exchange for the periods
indicated, as reported by the Frankfurt Stock
Exchange. Such high and low closing sales
prices are stated in marks. See "Risk
Factors - Currency Exchange Rates" for
information with respect to exchange rates
applicable during the periods set forth below.
<TABLE>
<CAPTION>
Gross
Annual Cash
Price (in Marks) Dividends per Average Daily
Per Ordinary Share<F1> Ordinary Volume
------------------------------ ------------------- -----------------
High Low Share<F2> (000's)<F1>
------------------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Calendar Year
1993 20.089
First Quarter 619.66 525.90 880.3
Second Quarter 614.53 544.08 946.6
Third Quarter 757.49 595.56 953.7
Fourth Quarter 835.83 687.93 898.3
1994 11.303
First Quarter 865.97 769.15 1025.2
Second Quarter 901.04 694.00 743.0
Third Quarter 841.00 710.50 788.7
Fourth Quarter 789.00 717.10 551.6
1995 15.714
First Quarter 762.00 607.00 740.4
Second Quarter 701.00 610.00 741.6
Third Quarter 751.00 635.00 630.9
Fourth Quarter 732.50 659.00 548.3
1996 --
First Quarter 824.5 722.00 1175.1
(though February
12, 1996)
<FN>
- ------------
(1) Source: Datastream
(2)Source: Bloomberg Financial Markets
</TABLE>
The historical information, including the
market prices and average daily trading
volumes listed above, has been derived from
publicly disseminated information that the
Company believes to be accurate. Neither the
Company nor the Agent makes any
representation as to the accuracy of such
information. The historical prices of the
Ordinary Shares should not be taken as an
indication of future performance, and no
assurance can be given that the price of the
Ordinary Shares will increase sufficiently to
cause the beneficial owners of the Notes to
receive an amount in excess of the principal
amount thereof.
Historical Currency Exchange
Rate........................ Fluctuations in the exchange rate between
the mark and the U.S. Dollar will affect the
U.S. Dollar equivalent of the Market Price of
the Ordinary Shares and, as a result, are
likely to affect the market price of the
Notes. The following table sets forth, for
the periods indicated, the period-end,
average, high and low exchange rate for the
purchase of U.S. dollars, expressed in marks
per $1.
Yearly Average Exchange Rates
(amounts in DM)(3)
----------------------------------------------------
Year ended Period
December 31, end High Low Average
----------- ------ ------ ------ -------
1991 1.5150 1.8360 1.4457 1.6592
1992 1.6190 1.6724 1.3900 1.5614
1993 1.7365 1.7405 1.5663 1.6537
1994 1.5498 1.7649 1.4920 1.6211
1995 1.4365 1.5621 1.3530 1.4325
First Quarter 1996
(through
February 12, 1996) 1.4919 1.4360 1.4658
- --------------
(3) Source: Datastream
On February 12, 1996, the exchange rate was
DM 1.4764 per $1. The information presented
in this Pricing Supplement relating to the
exchange rate of the U.S. Dollar as compared
to the mark is furnished as a matter of
information only. The mark has been subject
to fluctuations in the past and may be
subject to significant fluctuations in the
future. The fluctuations in the U.S.
Dollar/mark exchange rate that have occurred
in the past are not necessarily indicative of
fluctuations in that rate that may occur over
the term of the Notes.
The spot exchange rates between the mark and
U.S. Dollar are at any moment a result of the
supply of and demand for the currencies being
compared, and changes in the exchange rates
result over time from the interaction of many
factors directly or indirectly affecting
economic and political developments in other
countries. Of particular importance are
rates of inflation, interest rate levels, the
balance of payments and the extent of
governmental surpluses or deficits in Germany
and the United States, all of which are in
turn sensitive to the monetary, fiscal and
trade policies pursued by the governments of
Germany, the United States and other countries
important to international trade and finance.
European Monetary Union........ Germany is a party to the treaty establishing
the European Community (the "EC"), as amended
by the treaty on European Union (the
"Treaty"). The Treaty provides that at or
before January 1, 1999, and subject to the
fulfillment of certain conditions, the ECU
(currently a basket or index currency valued
on the basis of specified amounts of the
currencies of 12 of the 15 member countries
of the EC) may become a currency in its own
right, replacing all or some of the 15
currencies of the member countries of the EC,
including the mark. Such new single European
currency is expected to be named the Euro.
If, pursuant to the Treaty, the mark is
replaced by a new single European currency
and the Ordinary Shares are then quoted in
such single European currency in conformity
with legally applicable measures taken
pursuant to, or by virtue of, the Treaty, the
amount in U.S. Dollars to be received upon an
exchange of the Notes shall be calculated by
reference to the U.S. Dollar equivalent of
the single European currency Market Price of
the Ordinary Shares.
The spot exchange rates between such new
single European currency and the U.S. Dollar
would be affected by economic and political
developments throughout those member
countries of the EC participating in the
European monetary union.
Use of Proceeds and Hedging:... The net proceeds to be received by the
Company from the sale of the Notes will be
used for general corporate purposes and, in
part, by the Company or one or more of its
affiliates in connection with hedging the
Company's obligations under the Notes. See
also "Use of Proceeds" in the accompanying
Prospectus.
On the date of this Pricing Supplement, the
Company, through its subsidiaries, may hedge
its anticipated exposure in connection with
the Notes by taking positions in the Ordinary
Shares, in options contracts on the Ordinary
Shares listed on major securities markets or
positions in any other instruments that it
may wish to use in connection with such
hedging. In the event that the Company
pursues such a hedging strategy, the price at
which the Company is able to purchase such
positions may be a factor in determining the
Share Exchange Ratio. Purchase activity
could potentially increase the prices of the
Ordinary Shares, and therefore effectively
increase the level to which the Ordinary
Shares must rise before a holder of a Note
will receive more than the accreted principal
amount upon the exchange of such Note.
Although the Company has no reason to believe
that its hedging activity will have a
material impact on the price of the Ordinary
Shares or such options, there can be no
assurance that the Company will not affect
such prices as a result of its hedging
activities. The Company, through its
subsidiaries, is likely to modify its hedge
position throughout the life of the Notes by
purchasing and selling the securities and
instruments listed above and other available
securities and instruments.
Supplemental Information
Concerning Plan of
Distribution................. Each Agent has represented and agreed that
(i) it has not offered or sold and will not
offer or sell any Notes to persons in the
United Kingdom prior to admission of the
Notes to listing in accordance with Part IV
of the Financial Services Act 1986 (the
"Financial Services Act") except to persons
whose ordinary activities involve them in
acquiring, holding, managing or disposing of
investments (as principal or agent) for the
purposes of their businesses or otherwise in
circumstances which have not resulted and
will not result in an offer to the public in
the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995
or the Financial Services Act; (ii) it has
complied and will comply with all applicable
provisions of the Financial Services Act with
respect to anything done by it in relation to
the Notes in, from or otherwise involving the
United Kingdom; and (iii) it has only issued
or passed on and will only issue or pass on
in the United Kingdom any document received
by it in connection with the issue of the
Notes, other than any document which consists
of or any part of listing particulars,
supplementary listing particulars or any
other document required or permitted to be
published by listing rules under Part IV of
the Financial Services Act, to a person who
is of a kind described in Article 11(3) of
the Financial Services Act (Investment
Advertisements) (Exemption) Order 1995 or is
a person to whom such document may otherwise
lawfully be issued or passed on.
ANNEX A
OFFICIAL NOTICE OF EXCHANGE
Dated:[At least 30 days after the Original Issue Date]
Morgan Stanley Group Inc.
1251 Avenue of the Americas
New York, New York 10022
Morgan Stanley & Co. International Limited, as
Calculation Agent
Dear Sirs:
The undersigned holder of the Global Medium-Term Notes, Series D
(Euro Fixed Rate Senior Bearer Cash Exchangeable Notes Due March , 2002)
(Exchangeable for an Amount in U.S. Dollars Determined by Reference to the
Market Price of the Ordinary Shares of the Daimler-Benz Corporation) of Morgan
Stanley Group Inc. (the "Notes") hereby irrevocably elects to exercise with
respect to the principal amount of the Notes indicated below, as of the date
hereof (or, if this letter is received after 11:00 a.m. on any Exchange Date,
as of the next London Stock Exchange Trading Day, provided that such day is
prior to the earlier of March , 2002 and any redemption date) the Exchange
Right as described in Pricing Supplement No. dated March , 1996 (the
"Pricing Supplement") to the Prospectus Supplement dated March 29, 1995 and
the Prospectus dated March 29, 1995 related to Registration Statement No.
33-57833. Capitalized terms not defined herein have the meanings given to
such terms in the Pricing Supplement. Please date and acknowledge receipt of
this notice in the place provided below on the date of receipt, and fax a copy
to the fax number indicated, whereupon the Company will deliver cash 3
Business Days after the Exchange Date in accordance with the terms of the
Notes, as described in the Pricing Supplement.
Very truly yours,
________________________________
[Name of Holder]
By:_____________________________
[Title]
________________________________
[Fax No.]
$_______________________________
Principal Amount of Notes
surrendered for exchange
Receipt of the above Official
Notice of Exchange is hereby acknowledged
MORGAN STANLEY GROUP INC., as Issuer
MORGAN STANLEY & CO. INTERNATIONAL LIMITED, as Calculation Agent
By MORGAN STANLEY & CO. INTERNATIONAL LIMITED, as Calculation Agent
By:____________________________________________
Title:
Date and time of acknowledgement_______________
