Morgan Stanley to price 0% notes linked to six Asian indexes

By Angela McDaniels

Seattle, Jan. 13 - Morgan Stanley plans to price 0% notes due 2011 linked to five Asian indexes, according to a 424B2 filing with the Securities and Exchange Commission.

The underlying indexes are the Nikkei 225 index with a 30% weight, the MSCI China Index with a 20% weight, the Kospi 200 index with a 20% weight, the MSCI Taiwan index with a 20% weight and the Hang Seng index with a 10% weight.

If the return is positive at maturity, investors will receive par plus the percentage by which the basket value increased, multiplied by the participation rate, which is expected to be 130% to 135%.

If the return is negative and the basket level never drops below 75% of its initial level during the life of notes, then the payout will be par.

If the return is negative and the basket level does drop below 75% of its initial level during the life of notes, then investors will participate fully in any loss.

The return on the basket of indexes will be the average of its closing values measured once a month during the six months before maturity.

Morgan Stanley will be the underwriter.

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