Morgan Stanley plans 14.5% reverse convertibles tied to Sears Holding

By Jennifer Chiou

New York, Feb. 2 - Royal Bank of Scotland NV plans to price 14.5% annualized reverse convertible securities due Aug. 25, 2011 linked to Sears Holding Co. shares, according to an FWP with the Securities and Exchange Commission.

The payout at maturity will be par in cash unless Sears Holding shares fall below 75% of the initial price during the life of the notes and finish below the initial price, in which case the payout will be a number of Sears Holding shares equal to $1,000 divided by the initial price.

The notes (Cusip: 617482RE6) are expected to price on Feb. 22 and settle on Feb. 25.

Morgan Stanley & Co. Inc. is the agent.

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