Morgan Stanley ups payout for planned auto-callable notes on Financial Select SPDR for Eksportfinans

By Jennifer Chiou

New York, Oct. 24 - Eksportfinans ASA increased the payout and call premium for its planned issue of 0% auto-callable securities due April 2011 linked to the Financial Select Sector SPDR fund via Morgan Stanley & Co., according to a 424B3 filing with the Securities and Exchange Commission.

The notes will be called at increasing premiums if the fund closing value times the adjustment factor is greater than the call strike value, now 115% to 120% instead of 111% to 113% of the initial value, on a valuation date. The redemption amount will be par plus 12.6% to 13% if the notes are called in October 2009, par plus 13.25% to 13.75% if called in January 2010, par plus 13.9% to 14.5% if called in April 2010, par plus 14.55% to 15.25% if called in July 2010, par plus 15.2% to 16% if called in October 2010 and par plus 15.85% to 16.75% if called in January 2011.

The exact percentages will be determined at pricing. The adjustment factor is 1 and will be adjusted if specified events happen that affect the fund.

If the notes are not called, the payout at maturity will be par plus 16.5% to 17.5%, up from 15.25% to 16.25%, if the final fund value is greater than or equal to the initial value. If the fund finishes below the initial level but stays at or above its buffer level - 75% of its initial level - during the life of the notes, investors will receive par. If the fund finishes below the initial level and falls below the buffer level during the life of the notes, investors will share in losses.

The notes will price and settle in October.

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