Morgan Stanley to price buffered return enhanced notes linked to index basket via JPMorgan

By E. Janene Geiss

Philadelphia, Feb. 20 - Morgan Stanley plans to price 0% notes due March 6, 2009 linked to a basket of three buffered return enhanced components via J.P. Morgan Securities Inc., according to an FWP filing with the Securities and Exchange Commission.

The basket consists of the Dow Jones Euro Stoxx 50 with a 45% weight, FTSE 100 with a 30% weight and the Nikkei 225 with a 25% weight.

The payout at maturity will be par plus the basket return, which will equal the sum of the weighted returns for the basket indexes.

If a basket index finishes above its initial level, its return will be double the gain, capped at a maximum return. If a basket index falls by 10% or less, its return will be zero. If a basket index falls by more than 10%, its return will be negative 1.1111 multiplied by the decline beyond 10%.

The maximum return will be at least 17.4% for the Euro Stoxx 50, at least 17.2% for the FTSE 100 and at least 17.74% for the Nikkei 225. The exact caps will be determined at pricing.

Based on the estimated maximum returns, the maximum payout at maturity would be $1,174.30 per $1,000 principal amount of notes.

The closing basket level will be the average of the closing levels on the five consecutive trading days ending March 3, 2009.

The notes are expected to price Feb. 22 and settle Feb. 29.

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