Morgan Stanley Calls For Redemption of the 7¼% Capital Securities of Morgan Stanley Capital Trust II

New York —

Morgan Stanley (NYSE:MS) has announced that it will redeem on May 21, 2007 all of its 7¼% junior subordinated deferrable interest debentures held by Morgan Stanley Capital Trust II.  As a result, the trust will redeem on May 21, 2007, all of the trust’s 7¼% capital securities (CUSIP 61747N109).  There are 32,400,000 capital securities outstanding, having an aggregate liquidation amount of $810,000,000 ($25 liquidation amount per security).  The capital securities will be redeemed at a redemption price per security equal to the $25 liquidation amount per security plus accumulated and unpaid distributions to but excluding the redemption date.  The Bank of New York, as Property Trustee of the trust, will facilitate the redemption of the capital securities.  The capital securities are listed on the New York Stock Exchange under the symbol MWJ. 

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management, wealth management and credit services.  The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 31 countries.  For further information about Morgan Stanley, please visit www.morganstanley.com.

Contact: Corporate Treasury, Jai Sooklal, 212.762.3920

             Media Relations, Mark Lake, 212.762.6927