New Issue: Morgan Stanley prices $57.13 million 15-year leveraged CMS curve, S&P 500-linked notes

By Toni Weeks

San Diego, July 28 - Morgan Stanley priced $57.13 million of leveraged CMS curve and S&P 500 index-linked notes due July 29, 2026, according to a 424B2 filing with the Securities and Exchange Commission.

The coupon will be 10% for the first year. After that, the rate will accrue at the applicable leverage factor times the spread of the 30-year Constant Maturity Swap rate over the two-year CMS rate for each day that the S&P 500 is at least 825. The leverage factor is four beginning July 29, 2012, steps up to five on July 29, 2016 and to seven on July 29, 2021. Interest is payable quarterly and is subject to the maximum rate of 10% and the minimum rate of zero.

The payout at maturity will be par.

Morgan Stanley & Co. LLC is the agent.

Issuer:	Morgan Stanley
Issue:	Leveraged CMS curve and S&P 500 index-linked notes
Amount:	$57,126,000
Maturity:	July 29, 2026
Coupon:	10% for first year; thereafter, rate will accrue at the applicable leverage factor times the spread of the 30-year CMS rate over the two-year CMS rate for each day that the S&P 500 is at least 825; the leverage factor is four beginning July 29, 2012, stepping up to five on July 29, 2016 and to seven on July 29, 2021; cap of 10% and floor of zero; payable quarterly
Price:	Variable
Payout at maturity:	Par
Pricing date:	July 26
Settlement date:	July 29
Agent:	Morgan Stanley & Co. LLC
Fees:	3.5%
Cusip:	61745E4E8

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