Morgan Stanley plans 0% buffered PLUS linked to index, fund basket

By Susanna Moon

Chicago, Aug. 9 - Morgan Stanley plans to price 0% buffered Performance Leveraged Upside Securities due February 2013 linked to an index and two exchange-traded funds, according to an FWP filing with the Securities and Exchange Commission.

The basket consists of the S&P 500 index with a 60% weight, the iShares MSCI EAFE index fund with a 25% weight and the iShares MSCI Emerging Markets index fund with a 15% weight.

The payout at maturity will be par plus double any basket gain, up to a maximum return of $1,175 to $1,195 per $1,000 principal amount. The exact cap will be set at pricing.

Investors will receive par if the basket falls by up to 10% and will be exposed to any decline beyond 10%.

Morgan Stanley & Co. Inc. is the agent.

The notes will price and settle in August.

The Cusip number is 617482XA7.

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