New Issue: Morgan Stanley sells $3.6 million barrier notes linked to hybrid basket

By Susanna Moon

Chicago, Jan. 31 - Morgan Stanley priced $3.6 million of 0% market-linked barrier notes due Feb. 2, 2015 linked to a hybrid basket, according to an FWP filing with the Securities and Exchange Commission.

The basket consists of the iShares MSCI Emerging Markets index fund with a 30% weight, the S&P 500 index with a 25% weight, the Russell 2000 index with a 15% weight, and the Japanese yen, euro and Australian dollar each with a 10% weight.

If the basket return is at or above the barrier level of 47.5% on any day during the life of the notes, the payout at maturity will be par of $10 plus 6%.

If the basket return remains below the barrier level, the payout at maturity will be par plus the basket return, subject to a minimum payout of par.

Morgan Stanley & Co. Inc. is the agent.

Issuer:	Morgan Stanley
Issue:	Market-linked barrier notes
Underlying basket:	iShares MSCI Emerging Markets index fund (30% weight), S&P 500 index (25% weight), Russell 2000 index (15% weight), Japanese yen (10% weight), euro (10% weight) and Australian dollar (10% weight)
Amount:	$3,597,600
Maturity:	Feb. 2, 2015
Coupon:	0%
Price:	Par of $10.00
Payout at maturity:	If basket return is at or above 47.5% on any day during life of notes, par plus 6%; otherwise, par plus basket return, capped at 47.5% with floor of par
Initial levels:	$46.79 for MSCI EM, 1,299.54 for S&P, 795.43 for Russell, 82.92 for yen, 1.3734 for euro and 0.9920 for Australian dollar
Pricing date:	Jan. 27
Settlement date:	Feb. 1
Agent:	Morgan Stanley & Co. Inc.
Fees:	2.4%
Cusip:	61759G273

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