Morgan Stanley to price annual observation notes linked to 30-year CMS rate

By E. Janene Geiss

Philadelphia, May 15 - Morgan Stanley plans to price annual observation CMS curve-linked notes due May 2012, according to an FWP filing with the Securities and Exchange Commission.

If on any of three annual observation dates the 30-year Constant Maturity Swap rate is greater than or equal to the reference rate of 5%, the payout at maturity will be 8% to 12%, or $80 to $120, for that year. The exact interest payment will be set at pricing.

The observation dates will be in May 2010, May 2011 and May 2012 with the exact dates set at pricing.

The notes are expected to price and settle in May.

Morgan Stanley & Co. Inc. will be the agent.

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