Keep More of What You Earn

Finding an appropriate investment to meet your monthly income needs may be an important step toward achieving your financial objectives. For decades, investors have purchased municipal bonds for their tax-exempt income, high credit quality and predictability. The Municipal Bond Check-A-Month Portfolio (M-CAMP®) offers you the opportunity to own a diversified portfolio of high quality, tax-exempt municipal bonds.

M-CAMPs are professionally selected portfolios of six individual municipal bond issues. The six different issues have alternating interest payment dates that generate twelve consecutive monthly checks—which are free from regular federal income taxation and, in most cases, from state and local taxes.

Municipal Bonds: The Basics Municipal bonds are tax-exempt, fixed income securities that allow individuals the opportunity to participate in the development or maintenance of a variety of shared public interests, such as schools, highways, hospitals, bridges or other public facilities. When you purchase a municipal bond, you are lending money to an issuer (a state or local government entity) for a specified period of time and for use on a specific public project. The issuer promises to repay your principal in full at the bond’s maturity, in addition to paying you interest income—which is tax-exempt.

How Do M-CAMP®s Work? An M-CAMP is a professionally structured investment portfolio consisting of six different high quality, tax-exempt municipal bond issues. The six issues are professionally selected by Morgan Stanley’s bond trading desk personnel. The bonds have alternating coupon payment dates that generate twelve consecutive monthly checks, every year, over the life of the bonds. The six bonds that comprise an M-CAMP are marketed together with a total par value of $30,000 (six bonds at $5,000 each). M-CAMPs trade in multiples of approximately $30,000 plus accrued interest; however, each of the bond issues maintains its individual liquidity. The accompanying chart illustrates a sample National M-CAMP and the monthly interest payment schedule it generates.

Ease and Convenience the Tax-Exempt Way The key advantages of investing in an M-CAMP are: A professionally structured portfolio of six bonds that generates tax-exempt monthly income Not a mutual fund—you own each bond issue directly Individual daily liquidity—sell one or all of the bonds at anytime Competitive yields, fixed maturity dates and no ongoing management fees. Sample National M-CAMP Monthly Interest Payments Quantity Bond Description Interest Income Payable 5,000 Aaa/AAA Metropolitan Transit Authority 5.125% due 7/01/22 $128.12 January 1 and July 1 5,000 Aaa/AAA South Bend, IN Community School 5.00% due 8/15/19 $125.00 February 15 and August 15 5,000 Aaa/AAA Pittsburgh, PA School District 5.20% due 9/01/16 $130.00 March 1 and September 1 5,000 Aaa/AAA South Dakota State University 5.375% due 4/01/17 $134.37 April 1 and October 1 5,000 Aaa/AAA Long Beach, CA Finance Authority 5.00% due 11/15/22 $125.00 May 15 and November 15 5,000 Aaa/AAA North Central TX Health Facility 5.25% due 6/01/21 $131.25 June 1 and December 1 Approximate cost of one M-CAMP unit.......... $30,000 plus accrued interest Total annual income.......................... $1,547 Total federal income tax..................... $0 Federal exemption: All income generated is exempt from regular federal income taxation. State exemption: Investors may also be exempt from paying state income taxes, if they live in states that exempt "in-state" municipal bond interest from the state's income tax.

Features of the Morgan Stanley M-CAMP Monthly Tax-Exempt Income Interest income is exempt from regular federal income taxation. Predictability of Income Ability to make investment decisions due to the predictability of future income. Cost Effective No ongoing management fees. High Credit Quality Provides a sense of financial security and peace of mind. Highest Quality Bond Selection Carries the highest rating of investment reliability from the nation’s two leading credit rating agencies. Convenience Opportunity to obtain a high quality portfolio of municipal bonds with one purchase.

M-CAMP® Benefits Credit Quality Most of the individual bonds are rated "AAA," the highest rating assigned by Moody’s and Standard & Poor’s. "AAA"-rated bonds are judged to be the best quality in terms of investment reliability. Diversification M-CAMP®s hold six different issues of municipal bonds with various issuer names, coupon rates, call protection and maturities. Daily Liquidity Although the bonds are purchased together, they may be sold individually or collectively at any time to meet one’s changing investment needs.

Morgan Stanley Family of M-CAMPs State-Specific California                        New Mexico Florida                            New York Georgia                          North Carolina Ohio                               Pennsylvania Michigan                        Texas Massachusetts             Virginia New Jersey Regional Midwest                         National Southeast                      Southwest

Financial Strength Morgan Stanley is one of the world’s pre-eminent financial services firms, servicing more than 45 million people and 5,000 institutions. We support a network of approximately 14,500 Financial Advisors who are located in 608 offices in 27 countries. For more information on municipal bonds, please contact a Morgan Stanley Financial Advisor. Ask for a free copy of the brochure, Your Prudent Path to Lower Federal Income Taxes (#37610).