Morgan Stanley plans two-year buffered PLUS linked to index, funds

By Susanna Moon

Chicago, June 20 - Morgan Stanley plans to price 0% buffered Performance Leveraged Upside Securities due July 2014 linked to a basket consisting of an index and four exchange-traded funds, according to an FWP filing with the Securities and Exchange Commission.

The basket consists of the SPDR S&P 500 ETF Trust with a 40% weight, the iShares Russell 2000 index fund with a 20% weight, the iShares MSCI Emerging Markets index fund with a 15% weight, S&P 100 index with a 15% weight and the the iShares MSCI EAFE index fund with a 10% weight.

The payout at maturity will be par of $10.00 plus double any basket gain, up to a maximum return of $12.30 to $12.70 per note. The exact cap will be set at pricing.

Investors will receive par if the basket falls by up to 20% and will lose 1% for every 1% decline beyond 20%.

Morgan Stanley & Co. LLC is the agent, and Morgan Stanley Smith Barney LLC will handle distribution.

The notes will price and settle in June.

The Cusip number is 61755S362.

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