Morgan Stanley plans 15NC3 CMS curve-linked accrual notes

By E. Janene Geiss

Philadelphia, April 10 - Morgan Stanley plans to price Constant Maturity Swap (CMS) curve-linked accrual notes due April 25, 2023, according to an FWP filing with the Securities and Exchange Commission.

Interest will be reset and payable quarterly.

For the first three years, the notes will bear interest of 8%. From the fourth year to maturity, interest will accrue at 8% for each calendar day that the 30-year CMS is equal or greater than the two-year rate. If the 30-year rate is ever less than the two-year rate, interest will accrue at 0% for that day.

Morgan Stanley will be able to call the notes at par on any interest payment date beginning on April 25, 2011.

If the notes are not called early, the payout at maturity will be par.

The notes are expected to price in April and settle April 28.

Morgan Stanley & Co. Inc. is the agent.

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