Morgan Stanley to price HITS exchangeable for Schlumberger

By Jennifer Chiou

New York, Oct. 25 - Morgan Stanley is planning an issue of HITS (High Income Trigger Securities) due Dec. 20, 2007 exchangeable for Schlumberger Ltd. stock, according to an FWP filing with the Securities and Exchange Commission.

The coupon is talked at 8.5% to 9.5% and will be payable quarterly.

The global medium-term series F notes will be priced at par of $10.00.

Payout at maturity will be determined according to the performance of Schlumberger stock up to and including Dec. 18, 2007, the determination date. If the stock price has not decreased below the trigger level, 75% of the initial share price, investors will receive par in cash. If Schlumberger stock has dropped below the trigger price, investors will collect Schlumberger shares at an exchange ratio equal to $10.00 divided by the initial share price.

Morgan Stanley said it will apply to list the notes on the American Stock Exchange under the symbol "SBM."

Morgan Stanley will be manager for the offering.

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