Morgan Stanley to price buffered PLUS notes linked to index basket

By E. Janene Geiss

Philadelphia, June 17 - Morgan Stanley plans to price 0% buffered Performance Leveraged Upside Securities (PLUS) due June 2011 linked to a basket of indexes, according to an FWP filing with the Securities and Exchange Commission.

The basket consists of the S&P 500/Citigroup Growth Index with a 40% weight, S&P 500/Citigroup Value Index with a 34% weight, S&P 400 Midcap Index with a 13% weight and the S&P 600 Smallcap Index with a 13% weight.

The payout at maturity will be par plus a leverage factor of 105% to 110% times any increase in the basket. The exact leverage factor will be set at pricing.

Investors will receive par if the basket declines by 10% or less and will lose 1% for every 1% decline beyond 10%.

The notes will price and settle in June.

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

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