Morgan Stanley plans buffered notes linked to index basket

By Laura Lutz

Des Moines, March 28 - Morgan Stanley plans to price 0% buffered securities due Jan. 25, 2012 linked to a basket of four indexes, according to a 424B2 filing with the Securities and Exchange Commission.

The basket consists of the S&P 500 index with a 30% weight, the MSCI EAFE index with a 30% weight, the Russell 2000 index with a 10% weight and the Dow Jones AIG Commodity index with a 30% weight.

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

If the basket declines by up to 20%, the payout will be par. Investors will lose 1% for each 1% that the basket declines beyond 20%.

The notes are expected to price on April 18 and settle on April 25.

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

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