Morgan Stanley plans contingent income autocallables linked to Wells Fargo

By Angela McDaniels

Tacoma, Wash., July 27 - Morgan Stanley plans to price contingent income autocallable securities due Aug. 27, 2012 linked to the common stock of Wells Fargo & Co., according to an FWP filing with the Securities and Exchange Commission.

If Wells Fargo stock closes at or above the downside threshold level - 80% of the initial share price - on a quarterly determination date, investors will receive a contingent payment of $0.20 to $0.25 for each $10.00 note. Otherwise, no contingent payment will be made for that quarter. The exact contingent payment will be set at pricing.

If the closing share price is greater than or equal to the initial share price on any of the first three quarterly determination dates, the notes will be automatically redeemed at par plus the contingent payment.

If the notes are not called and the final share price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the contingent payment. If the final share price is less than the downside threshold level, the payout will be a number of Wells Fargo shares equal to $10.00 divided by the initial share price or, at the issuer's option, a cash amount equal to the value of those shares.

The notes (Cusip: 61760E184) will price Aug. 25 and settle Aug. 30.

Morgan Stanley & Co. LLC is the agent.

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