Morgan Stanley plans 8% Sparqs linked to Valero Energy

By Laura Lutz

Des Moines, May 8 - Morgan Stanley plans to price an issue of 8% Stock Participation Accreting Redemption Quarterly-pay Securities (Sparqs) due June 20, 2008 mandatorily exchangeable for Valero Energy Corp. stock, according to an FWP filing with the Securities and Exchange Commission.

The securities will price at the closing price of one share of Valero Energy common stock on the pricing date, which will be in May.

Interest will be payable quarterly.

At maturity, investors will receive one share of Valero Energy stock per Sparqs.

The Sparqs will be callable beginning Dec. 20, 2007. The yield to call will be set at pricing and is expected to be between 15% and 18%.

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

Morgan Stanley & Co. Inc. will be the agent.

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