Morgan Stanley to price 0% trigger securities linked to 20 mining, metals stocks

By Jennifer Chiou

New York, Aug. 29 - Morgan Stanley plans to price zero-coupon trigger securities due October 2009 linked to the common stocks or American Depositary Receipts of 20 metals sector and mining sector companies, according to a 424B2 filing with the Securities and Exchange Commission.

The basket includes equal weights of Alcoa Inc., Barrick Gold Corp., Century Aluminum Co., Cleveland-Cliffs Inc., CNOOC Ltd., Companhia Vale do Rio Doce, Compañía de Minas Buenaventura SAA, Consol Energy Inc., Foundation Coal Holdings, Inc., Freeport-McMoRan Copper & Gold Inc., Mittal Steel Co. NV, Newmont Mining Corp., Nucor Corp., Peabody Energy Corp., Posco, Sasol Ltd., Steel Dynamics, Inc., Tenaris SA, Ternium SA and United States Steel Corp.

The payout at maturity will be par of $10.00 plus any basket gain, capped at $12.60 to $13.00. The exact cap will be determined at pricing.

If the final basket return is negative and the basket has not decreased below the trigger level - 65% of the initial level - during the life of the notes, investors will receive par. If the final return is negative and the basket has dipped below the trigger level, investors will share in the loss.

The notes will price in September.

Morgan Stanley will be the underwriter.

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