Morgan Stanley plans buffered notes linked to S&P 500, MSCI EAFE

By Laura Lutz

Des Moines, March 12 - Morgan Stanley plans to price 0% buffered securities due March 31, 2009 linked to a basket consisting of the S&P 500 index and the MSCI EAFE index, according to an FWP filing with the Securities and Exchange Commission.

The S&P 500 index has a 65% weight, and the MSCI EAFE index has a 35% weight.

If the final basket level is at least the initial level, the payout will be par plus 300% of any gain on the basket.

The final basket level will be the average of the basket closing levels on the five trading days ending on March 26, 2009.

If the basket declines by up to 10%, the payout will be par. Investors will lose 1.1111% for each 1% that the basket declines beyond 10%.

The notes are expected to price and settle in March.

Morgan Stanley & Co. Inc. will be the agent.

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