Morgan Stanley trust plans floating units tied to Alcoa's 6.15% notes

By Marisa Wong

Madison, Wis., Jan. 13 - MS Structured Floating-Rate Trust Series 2011-01 plans to price $10 million of floating-rate trust units due August 2020 linked to Alcoa Inc.'s 6.15% senior notes due Aug. 15, 2020, according to a 424B5 filing with the Securities and Exchange Commission.

The sponsor of the trust is MS Structured Asset Corp., which is a subsidiary of Morgan Stanley.

The units represent a beneficial interest in the underlying securities.

The coupon is based on a floating rate equal to Libor plus a spread of 125 basis points, subject to a floor of 3% and a cap of 7.5% per year. Interest is payable quarterly.

Unless the units are redeemed earlier, the payout at maturity will be par.

If the units are redeemed prior to maturity due to a trust wind-up event - which may include, among other circumstances, an underlying security default, the early termination of the swap agreement or Alcoa calling the 6.15% notes - holders may receive less than the principal amount of the units.

The issuer plans to list the units on the New York Stock Exchange.

Morgan Stanley & Co. Inc. is the agent.

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