Morgan Stanley plans protected absolute return barrier notes linked to S&P 500

By E. Janene Geiss

Philadelphia, Oct. 28 - Morgan Stanley plans to price zero-coupon protected absolute return barrier notes due May 20, 2010 linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

If the index stays within a specified range during the life of the notes, payout at maturity will be par of $10 plus the absolute value of the index return, up to a maximum return of 129% to 131%. The exact cap will be set at pricing.

Otherwise, the payout will be par.

The lower barrier will be 69% to 71% of the initial index level, and the upper barrier will be 129% to 131% of the initial level. The exact range will be set at pricing.

The notes are expected to price and settle in November.

Morgan Stanley & Co. Inc. is the agent.

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