0000950103-95-000297.txt : 19950905 0000950103-95-000297.hdr.sgml : 19950905 ACCESSION NUMBER: 0000950103-95-000297 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950901 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY GROUP INC /DE/ CENTRAL INDEX KEY: 0000789625 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 132838811 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-57833 FILM NUMBER: 95569992 BUSINESS ADDRESS: STREET 1: 1251 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 2127034000 424B3 1 PROSPECTUS Dated March 29, 1995 Pricing Supplement No. 17 to PROSPECTUS SUPPLEMENT Registration Statement No. 33-57833 Dated March 29, 1995 August 30, 1995 Rule 424(b)(3) Morgan Stanley Group Inc. MEDIUM-TERM NOTES, SERIES C Senior Fixed Rate Notes ________________ The Medium-Term Notes, Series C (Senior Fixed Rate Notes) (the "Rupee Linked Notes") will mature on the Maturity Date and will not pay interest prior to the Maturity Date. The amount payable on the Maturity Date (the "Payment Amount") will be determined pursuant to a formula that depends on the change, if any, over the term of the Rupee Linked Notes in the value of the Indian Rupee as compared to the United States Dollar, as described more fully below under "Other Provisions -- Payment Amount". Morgan Stanley Group Inc. (the "Company") will cause the Rupee/Dollar Exchange Rate to be determined by Morgan Stanley & Co. Incorporated ("MS & Co.") for the Trustee, based upon which the Trustee shall calculate the Payment Amount as described below. INVESTORS IN THE RUPEE LINKED NOTES ARE SUBJECT TO EXCHANGE RATE FLUCTUATIONS OVER THE TERM OF THE RUPEE LINKED NOTES BETWEEN THE INDIAN RUPEE AND THE UNITED STATES DOLLAR. CONSEQUENTLY, THE PAYMENT AMOUNT OF A RUPEE LINKED NOTE PAYABLE ON THE MATURITY DATE MAY BE LESS THAN THE ISSUE PRICE OF SUCH NOTE, BUT MAY NOT BE LESS THAN ZERO. An investment in the Rupee Linked Notes entails significant risks not associated with similar investments in a conventional debt security, as further described below and as described under "Description of Notes -- Notes Linked to Commodity Prices, Equity Indices or Other Factors" and "Foreign Currency Risks -- Exchange Rates and Exchange Controls" in the accompanying Prospectus Supplement. The Rupee Linked Notes will not be redeemable in whole or in part prior to the Maturity Date. Principal Amount: $2,000,000 Redemption Dates: N/A Maturity Date: June 26, 1996 Redemption Percentage: N/A Interest Rate: N/A Annual Redemption Percentage Reduction: N/A Interest Accrual Date: N/A Interest Payment Period: N/A Other Provisions: Specified Currency: U.S. Dollars Payment Amount: The Payment Amount due on the Maturity Date Issue Price: 100% shall be an amount in U.S. Dollars calculated by the Trustee in accordance with the following formula: Settlement Date (Original Issue Date): September 5, 1995 Payment Amount = 114.25% x Principal Amount x Book Entry Note or FX1/FX2 Subordinated Note: Book Entry Note Senior Note or Senior Note Subordinated Note: FX1: 31.41 (The Rupee/Dollar exhange reference rate as of June 16, 1995 as shown on Reuter's Page Total Amount of OID: N/A "RBIB" under the caption "RBI Reference Rate USD = Rs") FX2: The Rupee/Dollar Exchange Rate (at which a Reference Dealer is willing to purchase Indian Original Yield to Maturity: N/A Rupees and sell U.S. Dollars) two Exchange Rate Days prior to the Maturity Date. Initial Accrual Period OID: N/A Rupee/Dollar Exchange The exchange rate on any day between the Indian Trustee: Chemical Bank Rate: Rupee and the U.S. Dollar shall be determined by MS & Co. for the Trustee by obtaining the Rupee/Dollar Exchange Rate (at which a Reference Dealer is willing to purchase Indian Rupees and sell U.S. Dollars) for such day from three Reference Dealers (or if quotes are unavailable from three Reference Dealers, from two such dealers) and calculating the arithmetic mean of such quotes; provided that if MS & Co. is unable to obtain such quotes from at least two Reference Dealers, then it shall obtain the Rupee/Dollar Exchange Rate for such day from Reuter's Page "RBIB" (or any successor page) under the caption "Selling" at approximately 11:00 A.M. New York time (the "Reuter's Quote"); provided further that if no Reuter's Quote is shown for such day, MS & Co. shall obtain from the Reserve Bank of India the Rupee/Dollar exchange reference rate as quoted for commercial transactions (the "RBI Quote") for such day or, if no RBI Quote is available for such day, for the next preceding day for which an RBI Quote is available. The Issuer shall cause MS & Co. to provide written notice to the Trustee at its New York Office of the Rupee/Dollar Exchange Rate equal to FX2 promptly on the opening of business New York time on the Business Day immediately preceding the Maturity Date. Exchange Rate Day: A New York Business Day which is also a business day in Bombay, India Reference Dealers: Standard Chartered Bank (New York), State Bank of India (New York) and Bank of America (San Francisco), or if any of such Reference Dealers are not quoting the Rupee/Dollar Exchange Rate on the applicable Exchange Rate Day, any other leading foreign exchange dealer selected by MS & Co. Recent Rupee/Dollar The Rupee declined consistently against the U.S. Exchange Rates: Dollar from 1982 to 1992. In early July 1991, the Indian Government adjusted the Rupee downward by approximately 20% against the U.S. Dollar. This was undertaken as part of an economic package designed to overcome economic and foreign exchange problems. Through February 29, 1992, the official value of the Rupee was determined by the Reserve Bank of India (the "RBI") in relation to a weighted basket of currencies of India's major trading partners. In the February 1992 budget, a new dual exchange rate mechanism was introduced to make the Rupee "partially convertible" by permitting conversion of 60% of the foreign exchange received on a trade or revenue account at a market determined rate and the remaining 40% at the official rate. All importers were, however, required to buy foreign exchange at the market rate. The Rupee was permitted to float fully and made convertible on a trade or revenue account in March 1993 and on the current account in August 1994. Although there is no official policy to maintain steady exchange rates, the RBI has actively intervened in the currency market. Such intervention may or may not continue in the future. The following table sets forth the closing values of the market-determined Rupee/Dollar exchange reference rates on the last business day of the last full week of each month for the periods indicated, as derived from Bloomberg's "Close/Value Table". (Since the Rupee was permitted to float partially and made convertible on trade and revenue accounts in March 1993, there have been no officially established exchange rates quoted by the RBI.) These historical rates should not be taken as an indication of future performance, and no assurance can be given as to the level of the Rupee/Dollar Exchange Rate as of two Exchange Rate Days prior to the Maturity Date. Month Closing Value _____ _____________ 1993 ____ January 29.226 February 30.200 March 31.772 April 31.674 May 31.721 June 31.626 July 31.550 August 31.656 September 31.380 October 31.454 November 31.466 December 31.504 1994 ____ January 31.485 February 31.434 March 31.453 April 31.418 May 31.390 June 31.390 July 31.392 August 31.368 September 31.375 October 31.375 November 31.368 December 31.378 1995 ____ January 31.380 February 31.415 March 31.415 April 31.400 May 31.400 June 31.397 July 31.410 August 31.670 Exchange Controls: The Foreign Exchange (Regulation) Act of 1973, as amended ("FERA") provides the statutory framework for Indian foreign exchange control. Through it the Indian Government exercises its policy with respect to foreign private investment in India and all dealings by residents of India with non-residents and foreign currency. Without permission (general or special) from the RBI, residents of India cannot undertake any transaction with persons outside India, sell, buy, lend or borrow foreign exchange, issue or transfer securities to non-residents, or acquire or dispose of any foreign security. In the past, the Indian Government has used its authority under FERA to restrict foreign private investment in India. Investment by non-residents and foreigners in the securities of Indian companies has been tightly controlled for many years by FERA, although recent regulations have lifted the restrictions in several significant respects.* Investors should be aware that such controls could limit their ability to hedge their investment in the Rupee Linked Notes by means of strategies involving purchases or sales of Rupees or Indian securities. * The information presented in the preceding sentences of this paragraph has been extracted from publicly available documents which have not been prepared or independently verified by the Company or any of its affiliates or advisers.
Capitalized terms not defined above have the meanings given to such terms in the accompanying Prospectus Supplement. MORGAN STANLEY & CO. Incorporated