New Issue: Morgan Stanley prices $14.6 million 13% ELKS linked to Baidu

By Angela McDaniels

Tacoma, Wash., Dec. 30 - Morgan Stanley priced $14.6 million of Equity LinKed Securities due June 24, 2011 linked to the American Depositary Shares of Baidu, Inc., according to a 424B2 filing with the Securities and Exchange Commission.

The six-month notes carry an annualized coupon of 13%. Interest is payable monthly.

The payout at maturity will be par of $10 unless Baidu ADSs close at or below the threshold price - 80% of the initial ADSs price - during the life of the notes, in which case the payout will be a number of Baidu ADSs equal to $10 divided by the initial ADS price or, at the issuer's option, a cash amount equal to the value of those ADSs.

Morgan Stanley & Co. Inc. is the agent.

Issuer:	Morgan Stanley
Issue:	Equity LinKed Securities
Underlying ADSs:	Baidu, Inc. (Nasdaq: BIDU)
Amount:	$14.6 million
Maturity:	June 24, 2011
Coupon:	13%, payable monthly
Price:	Par of $10.00
Payout at maturity:	If Baidu ADSs close at or below downside threshold price during life of notes, 0.09987 Baidu ADSs or value thereof in cash; otherwise, par
Initial ADS price:	$100.13
Downside threshold price:	$80.104, 80% of initial price
Pricing date:	Dec. 27
Settlement date:	Dec. 30
Agent:	Morgan Stanley & Co. Inc.
Fees:	1.5%
Cusip:	61759G158

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