Morgan Stanley plans PLUS notes linked to stock basket

By Jennifer Chiou

New York, March 13 - Morgan Stanley plans to price 0% Performance Leveraged Upside Securities (PLUS) due March 26, 2010 linked to a stock basket, according to a 424B2 filing with the Securities and Exchange Commission.

The basket consists of equal weights of Adobe Systems Inc., Apple Inc., Goldman Sachs Group, Inc., Home Depot, Inc., KB Home and Research in Motion Ltd.

If the final basket level increases, the payout at maturity will be par plus 200% of any gain on the basket, capped at 45% to 50%. The exact cap will be determined at pricing.

Otherwise, the payout will be par minus the basket decline.

The notes are expected to price and settle in March.

Morgan Stanley & Co. is the agent.

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