Morgan Stanley ups contingent income for autocallables on Freeport

By Susanna Moon

Chicago, May 4 - Morgan Stanley tweaked the terms of the contingent income autocallable securities due May 2013 linked to Freeport-McMoRan Copper & Gold Inc. shares, according to an FWP filing with the Securities and Exchange Commission.

If Freeport-McMoRan stock closes at or above the 75% downside threshold level on a quarterly determination date, investors will now receive a contingent payment of $0.30 to $0.40 for each $10.00 note. Originally, the contingent return was stated as $0.25 to $0.325 per $10.00 note.

If the stock closes at or above the initial share price on any of the first three quarterly determination dates, the notes will be redeemed at par plus the contingent payment.

If the notes are not called, the payout at maturity will be par plus the contingent payment unless the stock finishes below the downside threshold level, in which case investors will receive a number of Freeport-McMoRan shares equal to $10.00 divided by the initial share price or, at Morgan Stanley's option, the cash equivalent.

Morgan Stanley & Co. LLC is the agent, and Morgan Stanley Smith Barney LLC is the dealer.

The notes will price in May and settle in June.

The Cusip number is 61755S156.

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