Morgan Stanley to price 0% PLUS notes inversely linked to S&P 500 index

By E. Janene Geiss

Philadelphia, Nov. 28 - Morgan Stanley plans to price Buffered Bear Market Performance Leveraged Upside Securities (PLUS) due Jan. 20, 2009 inversely linked to the S&P 500 Index, according to an FWP filing with the Securities and Exchange Commission.

The securities will price and settle in December.

The payout at maturity will be par of $10.00 plus four times the absolute value of any index decline, subject to a maximum return that is expected to be 132.5% to 136.5% and will be determined at pricing.

If the index increases by 120% or less, investors will receive par. Investors will lose 1% for each 1% the index gains above 120%, subject to a minimum payout of $2 per $10.00 PLUS.

Morgan Stanley & Co. Inc. will be the agent.

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