Morgan Stanley plans issue of 0% buffered PLUS notes linked to index basket

By Jennifer Chiou

New York, Dec. 19 - Morgan Stanley plans to price an issue of 0% notes due March 31, 2008 in the buffered Performance Leveraged Upside Securities (PLUS) structure linked to an index basket, according to an FWP filing with the Securities and Exchange Commission.

The underlying indexes include the MSCI EAFE with a 25% weight, S&P 500 with a 20% weight, Nasdaq 100 with a 20% weight, MSCI Emerging Markets with a 15% weight, Nikkei 225 with a 10% weight and the Energy Select Sector index with a 10% weight.

The payout at maturity will be par of $10.00 plus double any positive return on the index basket. The payout will be capped at between $11.30 and $11.50, with the exact cap to be set at pricing. Investors will receive par if the basket loses up to 10% and will participate in any losses beyond 10% with a downside factor of 1.1111.

The securities are expected to price and settle in January.

Morgan Stanley will be the underwriter.

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