New Issue: Morgan Stanley sells $22.5 million callable notes with contingent coupon tied to S&P 500

By Susanna Moon

Chicago, Aug. 6 - Morgan Stanley priced $22.5 million of callable notes with contingent coupon due Aug. 9, 2020 based on the performance of the S&P 500 index, according to a 424B2 filing with the Securities and Exchange Commission.

The coupon will be 6% for the first year. After that, if the index is above 70% of the initial index level on the applicable valuation date, the contingent coupon will be 6% in the second year, 6.5% in the third and fourth years, 7.5% in the fifth, sixth and seventh years and 9% thereafter. Interest is payable quarterly.

The payout at maturity will be par.

The notes are callable at par on any quarterly redemption date beginning Aug. 9, 2013.

Morgan Stanley & Co. Inc. is the agent.

Issuer:	Morgan Stanley
Issue:	Callable notes with contingent coupon
Underlying index:	S&P 500
Amount:	$22.5 million
Maturity:	Aug. 9, 2020
Coupon:	6% for one year; after that, if index is above barrier level, rate of 6% in year two, 6.5% in years three and four, 7.5% in years five, six and seven and 9% thereafter; payable quarterly
Price:	Par
Payout at maturity:	Par
Call option:	At par on quarterly redemption dates after three years
Initial index level:	1,127.24
Barrier level:	789.068, or 70% of initial level
Pricing date:	Aug. 4
Settlement date:	Aug. 9
Agent:	Morgan Stanley & Co. Inc.
Fees:	2.25%
Cusip:	617482MX9

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