New Issue: Morgan Stanley prices $5 million leveraged notes linked to CMS curve, S&P 500 index

By Toni Weeks

San Luis Obispo, Calif., Feb. 10 - Morgan Stanley will price $5 million of fixed-to-floating leveraged CMS curve and S&P 500 index-linked notes due Feb. 28, 2034, according to a 424B2 filing with the Securities and Exchange Commission. The initial index price will be the index closing value on Feb. 25.

The coupon will be fixed at 10% for the first year. After that, it will be 4 times the spread of the 30-year Constant Maturity Swap rate over the two-year CMS rate for each day that the index closes at or above the 65% barrier level, up to a maximum rate of 10%. Interest will be payable monthly and cannot be less than 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-linked notes
Underlyings:	30-year CMS rate, two-year CMS rate, S&P 500 index
Amount:	$5 million
Maturity:	Feb. 28, 2034
Coupon:	10% for first year; beginning Feb. 28, 2015, 4 times spread of 30-year CMS rate over two-year CMS rate multiplied by proportion of days on which S&P 500 closes at or above index reference level, subject to minimum rate of zero and maximum rate of 10% per year; payable monthly
Price:	Variable
Payout at maturity:	Par
Initial index level:	Index closing level on Feb. 25
Index reference level:	65% of initial index level
Pricing date:	Feb. 6
Settlement date:	Feb. 28
Agent:	Morgan Stanley & Co. LLC
Fees:	4%
Cusip:	61760QDY7

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