Morgan Stanley to price knock-out notes linked to gold via JPMorgan

By Jennifer Chiou

New York, July 13 - Morgan Stanley plans to price 0% knock-out notes due Jan. 23, 2012 linked to the price of gold, according to a 424B2 filing with the Securities and Exchange Commission.

If the price of gold declines by more than 25% during the life of the notes, the payout at maturity will be par plus the gold return, which could be positive or negative. Otherwise, the payout will be par plus the greater of the gold return and a contingent minimum return of at least 9.5% that will be set at pricing. In either case, the payout will be capped at 130% of par.

The notes will price on July 16 and settle on July 26.

J.P. Morgan Securities Inc. and JPMorgan Chase Bank, NA are the agents.

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