New Issue: Morgan Stanley prices $2 million airbag return optimization notes on SPDR S&P 500 ETF

By Jennifer Chiou

New York, Aug. 27 - Morgan Stanley priced $2 million of 0% airbag return optimization securities due Aug. 29, 2016 linked to the SPDR S&P 500 ETF, according to a 424B2 filing with the Securities and Exchange Commission.

If the fund's return is positive, the payout at maturity will be par plus 150% of the fund's return, subject to a maximum return of 32%.

Investors will receive par if the fund declines by 15% or less. Otherwise, investors will receive a number of shares equal to the product of 7.0587, which is the principal amount of $1,000 divided by the conversion price and the adjustment factor on the final valuation date.

Morgan Stanley & Co. LLC is the agent, and UBS Financial Services Inc. is dealer.

Issuer:	Morgan Stanley
Issue:	Airbag return optimization securities
Underlying ETF:	SPDR S&P 500 ETF
Amount:	$2 million
Maturity:	Aug. 29, 2016
Coupon:	0%
Price:	Par
Payout at maturity:	If fund's return is positive, par plus 150% of fund's return, subject to maximum return of 32%; par if fund declines by 15% or less; otherwise, a number of shares equal to the product of 7.0587, which is the principal amount of $1,000 divided by the conversion price and the adjustment factor on the final valuation date
Initial share price:	$166.67
Conversion price:	$141.67, 85% of initial price
Pricing date:	Aug. 23
Settlement date:	Aug. 28
Agent::	Morgan Stanley & Co. LLC
Dealer:	UBS Financial Services Inc.
Fees:	2.5%
Cusip:	61762P708

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