Morgan Stanley to price 18-month Commodity Lasers linked to gold

By Marisa Wong

Madison, Wis., July 20 - Morgan Stanley plans to price 0% Commodity Leading Stockmarket Return Securities due Jan. 31, 2012 based on the performance of gold, according to a 424B2 filing with the Securities and Exchange Commission.

If the price of gold remains above 80% of the initial price throughout the life of the notes, the payout at maturity will be par of $1,000 plus the greater of the gold return and a fixed percentage of 10%.

If the price of gold falls to or below 80% of the initial level during the life of the notes, the payout will be par plus the gold return, which could be positive or negative.

In either case, the maximum payout at maturity will be $1,200 to $1,250 per security. The exact cap will be set at pricing.

The notes (Cusip: 617482MU5) will price July 26 and settle July 29.

Morgan Stanley & Co. Inc. is the underwriter.

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