Morgan Stanley plans CMS curve-linked accrual notes

By E. Janene Geiss

Philadelphia, Feb. 22 - Morgan Stanley plans to price Constant Maturity Swap (CMS) curve-linked accrual notes due Feb. 28, 2019, according to an FWP filing with the Securities and Exchange Commission.

Interest will be reset and payable quarterly.

The notes will bear interest of 7.5% to 8.5% per year times the proportion of days on which the spread of the 30-year CMS rate over the 10-year CMS rate is at least 0%. The exact coupon will be determined at pricing.

Morgan Stanley will be able to call the notes at par on any interest payment date beginning on Feb. 28, 2011.

If the notes are not called early, the payout at maturity will be par.

The notes are expected to price in February and settle on Feb. 28.

Morgan Stanley & Co. Inc. is the agent.

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