Morgan Stanley to price leveraged callable CMS curve linked notes

By Angela McDaniels

Tacoma, Wash., Sept. 2 - Morgan Stanley plans to price leveraged callable CMS curve linked notes due Sept. 22, 2025 linked to the 10-year and two-year Constant Maturity Swap rates, according to an FWP filing with the Securities and Exchange Commission.

The interest rate is fixed at 10% for the first year. Beginning Sept. 22, 2011, the per-year interest rate will be five times the spread of the 10-year CMS rate over the two-year CMS rate, subject to a cap of 15% and a floor of zero. Interest is payable quarterly.

The payout at maturity will be par.

Beginning Sept. 22, 2011, the notes are callable at par on any interest payment date.

The notes (Cusip 61745EF71) will price in September. The settlement date is expected to be Sept. 22.

Morgan Stanley & Co. Inc. is the agent.

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