PROSPECTUS Dated March 29, 1995 Amendment No. 1 to Pricing Supplement No. 43
PROSPECTUS SUPPLEMENT to Registration Statement No. 33-57833
Dated March 29, 1995 February 15, 1996
Rule 424(b)(3)
$60,000,000
Morgan Stanley Group Inc.
GLOBAL MEDIUM-TERM NOTES, SERIES D
EURO FIXED RATE SENIOR BEARER CASH EXCHANGEABLE NOTES
DUE MARCH 6, 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 6, 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 2.75% per annum payable annually
on March 6 of each year (each an "Interest Payment Date") commencing March 6,
1997. The Notes will be issued in minimum denominations of $1,000 and will
mature on March 6, 2002. The Maturity Date of the Notes may be accelerated
under the limited circumstances described in paragraph 7 of "Adjustments to
the Share Exchange Ratio" in this Pricing Supplement.
On any Exchange Date, 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 on such date of
1.59 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 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 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 9, 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 of
Daimler-Benz on the date of this Pricing Supplement converted into U.S.
Dollars at the rate of 1.4713DM per $1 was $546.80 (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-5 and PS-6 herein.
Application has been 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.
MORGAN STANLEY & CO.
International
Capitalized terms not defined herein have the meanings given to such terms in
the accompanying Prospectus Supplement.
Principal Amount:.............. $60,000,000
Maturity Date:................. March 6, 2002, subject to acceleration under
the limited circumstances described under
paragraph 7 of "Adjustments to the Share
Exchange Ratio."
Specified Currency:............ U.S. Dollars. Unless other specified, in
this Pricing Supplement all references to (i)
"$" 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:................. 2.75% per annum
Interest Payment Dates:........ March 6 in each year, commencing March 6, 1997
Issue Price:................... 100%
Original Issue Date (Settlement
Date):....................... March 6, 1996
Senior Note or Subordinated
Note:........................ Senior
Minimum Denominations:......... $1,000
Trustee:....................... Chemical Bank, N.A. (London branch)
Clearing Systems:.............. The Notes will be deposited with a common
depositary for the Euroclear Operator and
Cedel, for credit to the account designated
by or on behalf of the subscribers thereof.
Common Code:................... 6422314
ISIN:.......................... XS0064223141
Exchange Right:................ On any Exchange Date, the holders of Notes
will be entitled upon completion by the
holder and delivery to 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 acknowledgment of such notice
by the Company and the Calculation Agreement
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 1.59 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 except as provided under "Redemption
of the Notes" below. 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
beneficial owner of a Note or an interest
therein holds such Note or interest via the
Euroclear Operator or Cedel, any such notice
of exchange must be given to the Company via
the Euroclear Operator or Cedel, as the case
may be, in which case, such beneficial owner
will be required to complete and deliver such
Official Notice of Exchange to the Euroclear
Operator or Cedel, prior to 9:00 a.m. London
time on the Business Day prior to such
Exchange Date (or at such other time as may
be required by the then applicable operating
procedures of the relevant clearing system)
to permit the Euroclear Operator or Cedel, as
holders of Notes, to comply with the
conditions on the exercise of the Exchange
Right described above. If an Official Notice
of Exchange is received by the Company after
11:00 a.m. London time on any Exchange Date,
such notice will be treated as having been
received prior to 11:00 a.m. London time on
the immediately succeeding Exchange Date,
provided that such date is prior to the
earlier of the Maturity Date and any
redemption date.
The Company shall, or shall cause the
Calculation Agent to, deliver such cash to
the Trustee for delivery to the holders.
Share Exchange Ratio........... 1.59, 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 9,
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 and receive any
amounts described under "Exchange Right"
above; provided, however, that during the
period beginning on the day the Company
provides its notice of redemption and ending
at 11:00 a.m. London time on the Exchange
Date immediately preceding the redemption
date, holders will also be entitled to
receive accrued and unpaid interest to, but
not including, the redemption date on any
Notes so exchanged.
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" and "Market Price" above and
"Adjustments 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. It
is expected that, 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
reasonable 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
Rate with respect to such exercise will be
determined. If the beneficial owner of a Note
or an interest in a Note holds such Note or
interest via the Euroclear Operator or Cedel,
such Official Notice of Exchange must be
completed on the Business Day prior to the
relevant Exchange Date (or at such other time
as may be required by the then applicable
operating procedures of the relevant clearing
system) as further described under "Exchange
Right" above. Consequently, such holder will
not be able to determine, at the time of
completing such Official Notice of Exchange,
the exact amount due upon such exercise and
will bear the risk of subsequent changes in
the Market Price of the Ordinary Shares or in
the 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 on the Frankfurt Stock
Exchange and, as a result, may consequently
affect the market value of the Notes. See
"Currency Exchange Rate" 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 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 that may
influence the amount of cash receivable upon
exercise of the Exchange Right. See
"Currency Exchange Rate" and "Market Price"
above and "Adjustments to the Share Exchange
Ratio" and "Market Disruption Event" below.
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 (an increase in the number of
Ordinary Shares without any increase in
capital) or reverse stock split (a reduction
in the number of Ordinary Shares without any
decrease in capital) or a reduction of
capital by consolidating Ordinary Shares or
by redeeming, without payment, Ordinary
Shares, then once such split or reduction 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 or redeemed 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 (an "Ordinary Share Stock
Dividend") (an increase of Ordinary Shares
from Daimler-Benz reserves, but excluding any
Ordinary Shares or other securities or other
distribution of assets in specie in lieu of a
cash dividend (a "Scrip Dividend")) that is
given ratably to all holders of Ordinary
Shares, then once the Ordinary Share Stock
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. If the Ordinary Shares are subject to any
other stock dividend (a "Non-Ordinary Share
Stock Dividend") (an increase of shares or an
issue of securities other than Ordinary
Shares (or securities described in paragraph
5 or 6 below) from Daimler-Benz reserves, but
excluding any Scrip Dividend) that is given
ratably to all holders of Ordinary Shares,
then once such Non-Ordinary Share Stock
Dividend has become effective and the
Ordinary Shares are trading ex-dividend, the
Share Exchange Ratio will be adjusted to
equal the product of the prior Share Exchange
Ratio times a fraction, the numerator of
which shall be the Market Price of one
Ordinary Share on the Frankfurt Stock
Exchange Trading Day immediately preceding
the date on which such Non-Ordinary Share
Stock Dividend is announced and the
denominator of which shall be (x) the Market
Price of one Ordinary Share on the Frankfurt
Stock Exchange Trading Day immediately
preceding the date on which such Non-Ordinary
Share Stock Dividend is announced less (y) the
fair market value on the date of such
announcement of the Non-Ordinary Share Stock
Dividend per Ordinary Share, as determined in
good faith by the Calculation Agent.
4. There will be no adjustments to the
Share Exchange Ratio to reflect cash
dividends or Scrip Dividends or other
distributions paid with respect to the
Ordinary Shares other than distributions
described in paragraph 1, 2 or 3 above or in
paragraph 5 or 6 or in clause (v) of
paragraph 7 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 paragraph 1, 2 or 3 above or in paragraph
5 or 6 or in clause (v) of paragraph 7 below
that also constitutes an Extraordinary
Dividend shall only cause an adjustment to
the Share Exchange Ratio pursuant to
paragraph 1, 2 or 3 above or in paragraph 5
or 6 or in clause (v) of paragraph 7 below,
as the case may be.
5. If Daimler-Benz increases its share
capital by issuing new Ordinary Shares
against contributions by granting direct or
indirect rights to all or substantially all
of the holders of its Ordinary Shares
("Ordinary Share rights issues") or grants to
all or substantially all holders of its
Ordinary Shares directly or indirectly an
option or warrant to subscribe or purchase
Ordinary Shares ("Ordinary Share warrants
issues") at an issue or exercise price per
Ordinary Share less than the Market Price of
the Ordinary Shares on the first Frankfurt
Stock Exchange Trading Day on which such
Ordinary Shares are listed "ex-rights" or
"ex-warrants" (the "ex-date") and the ex-date
precedes the earlier of the applicable
Exchange Date and the Maturity Date 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 amount
payable to subscribe or purchase 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 ex-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.
6. If Daimler-Benz or any of its
subsidiaries (i) issues any securities (other
than Ordinary Shares or options, warrants or
other rights to subscribe for or purchase
Ordinary Shares) by granting direct or
indirect rights to all or substantially all
of the holders of its Ordinary Shares
("Non-Ordinary Share rights issues") or (ii)
grants to all or substantially all holders of
its Ordinary Shares directly or indirectly
an option or warrant to subscribe for or
purchase any securities other than Ordinary
Shares or options, warrants or other rights to
subscribe for or purchase Ordinary Shares
("Non-Ordinary Share warrants issues") and
the ex-date precedes the earlier of the
applicable Exchange Date and the Maturity
Date of the Notes, then the Share Exchange
Ratio will be adjusted on the ex-date to
equal the product of the prior Share Exchange
Ratio and a fraction, the numerator of which
shall be the Market Price of one Ordinary
Share on the Frankfurt Stock Exchange Trading
Day immediately preceding the date on which
such Non-Ordinary Share rights issue or
Non-Ordinary Share warrants issue is
announced and the denominator of which shall
be (x) the Market Price of one Ordinary Share
on the Frankfurt Stock Exchange Trading Day
immediately preceding the date on which such
Non-Ordinary Share rights issue or
Non-Ordinary Share warrants issue is
announced less (y) the fair market value on
the date of such announcement of the portion
of such Non-Ordinary Share rights issue or
Non-Ordinary Share warrants issue
attributable to one Ordinary Share, as
determined in good faith by the Calculation
Agent.
7. If (i) there occurs any reclassification
or change of Ordinary Shares or other
Exchange Property (as defined below)
consisting of equity securities, (ii)
Daimler-Benz, or any surviving entity or
subsequent surviving entity of Daimler-Benz
(a "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 or any Daimler-Benz Successor
is liquidated, (v) Daimler-Benz or any
Daimler-Benz Successor issues to all of its
shareholders equity securities of an issuer
other than Daimler-Benz or such Daimler-Benz
Successor (other than in a transaction
described in clauses (ii), (iii) or (iv)
above) (a "Spin-off Event"), (vi) a tender or
exchange offer by Daimler-Benz or any
Daimler-Benz Successor is consummated for
some or all of the outstanding Ordinary
Shares or other Exchange Property consisting
of equity securities or (vii) Ordinary Shares
(or other kinds of Exchange Property) are
nationalized, expropriated or otherwise
required to be transferred to any
governmental agency authority or entity (any
such event in clauses (i) through (vii) a
"Reorganization Event"), the method of
determining the amount payable upon exchange
pursuant to the exercise of the Exchange
Right will be adjusted to provide that each
exchanging holder of Notes will receive, in
respect of the principal amount of such
Notes, an amount in U.S. Dollars equal to the
product of (x) the Share Exchange Ratio and
(y) the Transaction Value (as defined below)
per Ordinary Share of any securities, cash or
any other assets distributed in any such
Reorganization Event, including, in the case
of a Spin-off Event, the Market Price on the
Exchange Date of the Ordinary Share (or
market value on the Exchange Date of any
other equity security that comprises Exchange
Property) 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. "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 on the applicable Exchange
Date, multiplied by the quantity of such
security received for each Ordinary Share, as
such amounts in clauses (i) through (iii) are
converted to U.S. Dollars at the currency
Exchange Rate (or, if the value of such cash
or property is not determined in marks, at an
exchange rate determined in good faith by the
Calculation Agent) applicable on the date
such Transaction Value is determined.
For purposes of paragraph 7 above, in the
case of a consummated tender or exchange
offer by Daimler-Benz or any Daimler-Benz
Successor for some or all Exchange Property
of a particular type, Exchange Property shall
be deemed to include the amount of cash or
other property paid by the offeror in the
tender or exchange offer with respect to such
Exchange Property (in an amount determined on
the basis of the rate of exchange on the date
such tender or exchange offer is
consummated). 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. 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.
8. If more than one of the events set out
above occurs, the adjustments to the Share
Exchange Ratio for the second and subsequent
events shall be to the Share Exchange Ratio
as adjusted for preceding events.
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 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 such changes are appropriate. 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 7
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 official closing prices and average daily
volume for the Ordinary Shares on the
Frankfurt Stock Exchange for the periods
indicated, as reported by Datastream. The
table also sets out the gross annual
dividends per Ordinary Share, as reported by
Bloomberg Financial Markets. Such high and
low official closing prices and the gross
annual dividends 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>
Price (in U.S. Gross
Price (in Marks) Dollars) Annual Cash
Per Ordinary Share(1) Per Ordinary Share Dividends (in Average Daily
------------------------------- ---------------------------- Marks) per Volume
High Low High Low Ordinary Share(2) (000's)(1)
------------ ----------------- ------------- ------------- --------------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Calendar Year
1993 20.089
First Quarter 619.66 525.90 373.06 319.70 880.3
Second Quarter 614.53 544.08 361.81 338.57 946.6
Third Quarter 757.49 595.56 461.04 351.16 953.7
Fourth Quarter 835.83 687.93 481.89 403.67 898.3
1994 11.303
First Quarter 865.97 769.15 517.49 451.19 1025.2
Second Quarter 901.04 694.00 546.58 430.92 743.0
Third Quarter 841.00 710.50 533.80 418.93 788.7
Fourth Quarter 789.00 717.10 519.08 456.46 551.6
1995 15.714
First Quarter 762.00 607.00 491.68 437.48 740.4
Second Quarter 701.00 610.00 496.95 440.85 741.6
Third Quarter 751.00 635.00 504.70 459.48 630.9
Fourth Quarter 732.50 659.00 507.41 468.94 548.3
1996 --
First Quarter 824.5 722.00 553.73 502.61 1134.5
(though February
15, 1996)
<FN>
____________________
(1) Source: Datastream
(2) Source: Bloomberg Financial Markets. For the years 1993, 1994 and 1995,
cash dividends on the Daimler-Benz Stock (converted into U.S.
Dollars on the day each dividend was declared) were $12.501,
$6.821 and $11.416, respectively.
</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, high,
low and average exchange rates for the
purchase of U.S. dollars, expressed in marks
per $1.
Yearly Average Exchange Rates
(amounts in DM)(1)
---------------------------------------------------
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 15, 1996) 1.4919 1.4360 1.4658
_______________
(1) Source: Datastream
On February 15, 1996, the exchange rate was
DM 1.4713 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, hedged its
anticipated exposure in connection with the
Notes by taking positions in the Ordinary
Shares. Such hedging was carried out in a
manner designed to minimize any impact on the
price of the Ordinary Shares. Purchase
activity could potentially have increased the
price 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 had a
material impact on the price of the Ordinary
Shares, there can be no assurance that the
Company did not affect such price 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 Ordinary
Shares, 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.
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.
1585 Avenue of the Americas
New York, New York 10036
Morgan Stanley & Co. International Limited, as
Calculation Agent
25 Cabot Square
Canary Wharf
London E144 QA
England
Attn: Simon Midgen
Fax No.: 44-171-425-6996
Dear Sirs:
The undersigned holder of the Global Medium-Term Notes, Series D (Euro
Fixed Rate Senior Bearer Cash Exchangeable Notes Due March 6, 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 Exchange Date, provided that such day is prior to the earlier
of March 6, 2002 and any redemption date) the Exchange Right as described in
Pricing Supplement No. 43 dated February 15, 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 an amount in U.S. Dollars 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____________
