Morgan Stanley plans buffered range accrual notes linked to S&P 500

By Toni Weeks

San Diego, Jan. 18 - Morgan Stanley plans to price buffered range accrual securities due January 2015 linked to the S&P 500 index, according to a 424B2 filing with the Securities and Exchange Commission.

Interest will accrue at 7% to 8% for each day that the index closes at or above 1,000. Interest is payable monthly.

If the final index value is at least 1,000, the payout at maturity will be par. Otherwise, investors will be exposed to the decline in the index beyond that level.

Because the index threshold value is fixed, but the buffer amount and the minimum payment at maturity will be based on the extent to which the initial index value exceeds the index threshold value, investors will not know the buffer amount or minimum payment at maturity at the time of investment. The value of the index on the pricing date will determine the exact buffer level and minimum payment at maturity.

The exact terms will be set at pricing.

The notes (Cusip: 617482F58) are expected to price and settle in January.

Morgan Stanley & Co. LLC will be the agent.

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