Morgan Stanley to price 20-year CMS curve-linked accrual notes

By Jennifer Chiou

New York, April 28 - Morgan Stanley plans to price CMS curve-linked accrual notes due May 19, 2028, according to an FWP filing with the Securities and Exchange Commission.

Interest will be payable quarterly.

For the first three years, the notes will bear interest at 9% per year. Beginning May 19, 2011, interest will accrue at 9% per year for each calendar day that the 30-year Constant Maturity Swap (CMS) is greater than or equal to the two-year CMS rate. If the 30-year CMS rate is less than the two-year CMS rate on any day, interest will accrue at 0% for that day.

Beginning May 19, 2011, the notes will be callable at par on any interest payment date.

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

The notes are expected to price in May and settle May 19.

Morgan Stanley & Co. Inc. is the agent.

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