New Issue: Morgan Stanley prices $2.5 million leveraged CMS curve, Russell 2000-linked notes

By Toni Weeks

San Luis Obispo, Calif., Aug. 13 - Morgan Stanley priced $2.5 million of fixed-to-floating leveraged CMS curve and Russell 2000 index-linked notes due Aug. 28, 2033, according to a 424B2 filing with the Securities and Exchange Commission.

The coupon will be 10% for the first two years. After that, it will be four times the spread of the 30-year Constant Maturity Swap rate over the two-year CMS rate, subject to a minimum of zero and a maximum annualized rate of 10%, multiplied by the proportion of days on which the index closes at or above 680. Interest will be payable monthly.

The payout at maturity will be par.

Morgan Stanley & Co. LLC is the agent with Morgan Stanley Smith Barney LLC as dealer.

Issuer:	Morgan Stanley
Issue:	Fixed-to-floating leveraged CMS curve and Russell 2000-linked notes
Underlyings:	30-year CMS rate, two-year CMS rate, Russell 2000 index
Amount:	$2.5 million
Maturity:	Aug. 28, 2033
Coupon:	10% for two years; beginning Aug. 28, 2015, four times spread of 30-year CMS rate over two-year CMS rate multiplied by proportion of days on which index closes at or above 680, subject to minimum rate of zero and maximum rate of 10% per year; payable monthly
Price:	Variable prices
Payout at maturity:	Par
Initial index level:	1,048
Index reference level:	680
Pricing date:	Aug. 9
Settlement date:	Aug. 28
Agent:	Morgan Stanley & Co. LLC
Dealer:	Morgan Stanley Smith Barney LLC
Fees:	3.75%
Cusip:	61760QDE1

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