Morgan Stanley to price knock-out notes linked to gold via JPMorgan

By Angela McDaniels

Tacoma, Wash., Jan. 20 - Morgan Stanley plans to price 0% knock-out notes due July 29, 2010 linked to the price of gold, according to a 424B2 filing with the Securities and Exchange Commission.

If the price of gold declines by more than 10% during the life of the notes, the payout at maturity will be par plus the gold return, which could be positive or negative. Otherwise, the payout will be par plus the greater of the gold return and 5%. In either case, the payout will be capped at 112.5% of par.

The notes will price Jan. 22 and settle Jan. 29.

J.P. Morgan Securities Inc. and JPMorgan Chase Bank, NA are the agents.

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