New Issue: Morgan Stanley prices $3.21 million PLUS linked to index, two ETFs

By Angela McDaniels

Tacoma, Wash., Jan. 27 - Morgan Stanley priced $3.21 million of 0% Performance Leveraged Upside Securities due July 20, 2010 linked to a basket of an index and two exchange-traded funds, according to an FWP filing with the Securities and Exchange Commission.

The basket includes the S&P 500 index with a 45% weight, the iShares iBoxx $ Investment Grade Corporate Bond fund with a 38% weight and the iShares MSCI EAFE index fund with a 17% weight.

The payout at maturity will be par of $10.00 plus triple any basket gain, subject to a maximum return of 34%. Investors will be fully exposed to any basket decline.

Morgan Stanley & Co. Inc. is the agent.

Issuer:	Morgan Stanley
Issue:	Performance Leveraged Upside Securities
Underlying basket:	S&P 500 index (45% weight), iShares iBoxx $ Investment Grade Corporate Bond fund (38% weight) and iShares MSCI EAFE index fund (17% weight)
Amount:	$3,211,390
Maturity:	July 20, 2010
Coupon:	0%
Price:	Par of $10.00
Payout at maturity:	Par plus triple any basket gain, up to maximum return of 34%; full exposure to any basket decline
Initial levels:	831.95 for S&P 500; $98.57 for iShares iBoxx $ Investment Grade Corporate Bond fund; $38.25 for iShares MSCI EAFE index fund
Pricing date:	Jan. 23
Settlement date:	Jan. 30
Agent:	Morgan Stanley & Co. Inc.
Fees:	1.75%

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