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Published on 8/18/2006 in the Prospect News Convertibles Daily.

New Issue: Morgan Stanley prices $2.02 million 0% notes linked to 100 North American companies

By Jennifer Chiou

New York, Aug. 18 - Morgan Stanley priced a $2.02 million issue of 0% Corporate Portfolio Trigger Securities due Sept. 20, 2013 linked to the common stocks of 100 North American companies, according to an FWP filing with the Securities and Exchange Commission.

A trigger event will occur if any of the companies in the portfolio experiences a bankruptcy or if the closing price of any stock in the portfolio falls by 85% or more from that stock's initial price during the life of the securities.

At maturity, the notes will pay $1,000 if no trigger event has occurred over the term of the securities, $800 if one trigger event has occurred, $600 if two trigger events have occurred, $400 if three trigger events have occurred and $200 if four trigger events have occurred.

If five or more trigger events have occurred over the life of the notes, investors will lose their entire investment.

The stocks include ACE Ltd., Aetna Inc., Agrium Inc., Allergan Inc., Alltel Corp., Altria Group Inc., American Express Co., Amgen Inc., Apache Corp., Applied Materials, Inc., AT&T Inc., AutoZone Inc., Baxter International Inc., BellSouth Corp., Belo Corp., BorgWarner Inc., Boston Scientific Corp., Carnival Corp., Caterpillar Inc., CBS Corp., Cendant Corp., Centex Corp., CenturyTel, Inc., Cigna Corp., CIT Group Inc., Clear Channel Communications Inc., Computer Sciences Corp., ConAgra Foods, Inc., ConocoPhillips;

Deere & Co., Diamond Offshore Drilling Inc., Dominion Resources Inc., DTE Energy Co., E. I. du Pont de Nemours and Co., Eastman Chemical Co., Encana Corp.; Federated Department Stores Inc., FirstEnergy Corp., Gannett Co. Inc., Genworth Financial Inc., H.J. Heinz Co., Hewlett-Packard Co., International Paper Co., Jones Apparel Group Inc., Kimco Realty Corp., Lehman Brothers Holdings Inc., Lennar Corp., Limited Brands Inc., Loews Corp., Marsh & McLennan Cos. Inc., Masco Corp., MBIA Inc., McDonald's Corp., MeadWestvaco Corp., Medtronic Inc., MetLife Inc., MGIC Investment Corp.;

Nordstrom Inc., Occidental Petroleum Corp., Omnicom Group Inc., Pactiv Corp., PPG Industries Inc., Prudential Financial Inc., Pulte Homes Inc., R.R. Donnelley & Sons Co., Radian Group Inc.; RadioShack Corp., Rohm and Haas Co., RPM International Inc., Ryder System Inc., Sabre Holdings Corp., Sara Lee Corp., Sealed Air Corp., Southwest Airlines Co., Sprint Nextel Corp., Temple-Inland Inc., Textron Inc.;

The Allstate Corp., The Bear Stearns Cos. Inc., The Chubb Corp., The Dow Chemical Co., The Goldman Sachs Group Inc., The Hartford Financial Services Group Inc., The New York Times Co., The PMI Group Inc., The Sherwin-Williams Co., Time Warner Inc., Toll Brothers Inc., Transocean Inc., Tyson Foods Inc., United States Cellular Corp., UnitedHealth Group Inc., UST Inc., V.F. Corp., Verizon Communications Inc., Washington Mutual Inc., Weyerhaeuser Co., Whirlpool Corp. and Wyeth XL Capital Ltd.

Issuer:Morgan Stanley
Issue:Corporate Portfolio Trigger Securities
Underlying securities:Common stocks of 100 North American companies
Amount:$2.02 million
Maturity:Sept. 20, 2013
Coupon:0%
Price:Par of $200.00
Payout at maturity:$1,000 if no trigger event, which includes bankruptcy or a stock falling by 85% or more, has occurred over the term of the securities, $800 with one trigger event, $600 with two trigger events, $400 after three trigger events and $200 if four trigger events have occurred; if five or more trigger events have occurred over the life of the notes, investors will lose their entire investment
Pricing date:Aug. 17
Settlement date:Aug. 24
Agent:Morgan Stanley & Co. Inc.

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