Morgan Stanley to price three-month 14% RevCons linked to lululemon

By Angela McDaniels

Tacoma, Wash., April 29 - Morgan Stanley plans to price reverse convertible securities due Aug. 29, 2011 linked to the common stock of lululemon athletica inc., according to an FWP filing with the Securities and Exchange Commission.

The three-month notes will carry a coupon of 14% per year. Interest will be payable monthly.

The payout at maturity will be par unless lululemon stock falls by 20% or more during the life of the notes and finishes below the initial share price, in which case the payout will be a number of lululemon shares equal to par divided by the initial share price or, at the issuer's option, the value of those shares in cash.

The notes (Cusip: 617482TY0) will price on May 24 and settle on May 27.

Morgan Stanley & Co. Inc. is the agent.

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