Morgan Stanley to sell leveraged callable CMS curve-linked notes

By Jennifer Chiou

New York, Jan. 29 - Morgan Stanley plans to price leveraged callable CMS curve-linked notes due Feb. 18, 2030, according to an FWP with the Securities and Exchange Commission.

Interest will be 12% per year for the first year. After that, the rate will be five times the spread of the 10-year Constant Maturity Swap rate over the two-year CMS rate, up to a cap of 15% per year and a floor of 0% in any interest period. Interest is payable quarterly.

The payout at maturity will be par.

The notes are callable on any interest payment date beginning Feb. 18, 2011.

The notes will price in February and settle on Feb. 18.

Morgan Stanley & Co. Inc. is the agent.

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