New Issue: Morgan Stanley prices $638,000 5.23% airbag autocallables linked to Franklin Resources

By Jennifer Chiou

New York, July 17 - Morgan Stanley priced $638,000 of 5.23% airbag autocallable yield optimization notes due July 18, 2014 linked to Franklin Resources, Inc. shares, according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable monthly.

The notes will be called at par if Franklin Resources shares close at or above the initial share price on quarterly observation date.

The payout at maturity will be par unless the final share price is less than the conversion price, in which case the payout will be a number of Franklin Resources shares equal to $1,000 divided by the conversion price. The conversion price is 85% of the initial share price.

Morgan Stanley & Co LLC is the agent with UBS Financial Services Inc. as dealer.

Issuer:	Morgan Stanley
Issue:	Airbag autocallable yield optimization notes
Underlying stock:	Franklin Resources, Inc. (Symbol: BEN)
Amount:	$638,000
Maturity:	July 18, 2014
Coupon:	5.23%, payable monthly
Price:	Par
Payout at maturity:	If final share price is less than conversion price, Franklin Resources shares equal to $1,000 divided by the conversion price; otherwise, par
Call:	At par if Franklin Resources shares close at or above initial share price on quarterly observation date
Initial share price:	$143.49
Conversion price:	$121.97, 85% of initial share price
Pricing date:	July 12
Settlement date:	July 17
Agent:	Morgan Stanley & Co LLC with UBS Financial Services Inc. as dealer
Fees:	1.5%
Cusip:	61762P229

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