CALCULATION
OF REGISTRATION FEE
Title
of Each Class of Securities Offered
|
|
Maximum
Aggregate Offering Price(1)
|
|
Amount
of Registration Fee
|
Fixed/Floating Rate Senior Notes due 2027
|
|
$803,500,000
|
|
$87,661.85
|
(1) The U.S.
dollar equivalent of the maximum aggregate offering price has been calculated using an exchange rate of U.S. $0.8035 per CAD1.00 as of
July 29, 2021.
PROSPECTUS Dated November 16, 2020
PROSPECTUS SUPPLEMENT Dated November 16, 2020
|
Pricing Supplement No. 2,050 to
Registration Statement No. 333-250103
Dated July 29, 2021
Rule 424(b)(2)
|
GLOBAL MEDIUM-TERM NOTES, SERIES I
CAD1,000,000,000, Fixed/Floating Rate Senior
Notes Due 2027
We,
Morgan Stanley, are offering the notes described herein on a global basis. We may redeem some or all of the Global Medium-Term Notes,
Series I, CAD1,000,000,000, Fixed/Floating Rate Senior Notes Due 2027 (the “notes”) at any time on or after February 4,
2022 and prior to August 4, 2026 in accordance with the provisions described in the accompanying prospectus under the heading “Description
of Debt Securities—Redemption and Repurchase of Debt Securities—Optional Make-whole Redemption of Debt Securities,”
as supplemented by the provisions below. We also may redeem the notes, (i) in whole but not in part, on August 4, 2026, or (ii) in whole
at any time or in part from time to time, on or after July 4, 2027, in each case at a redemption price equal to 100% of the principal
amount to be redeemed plus accrued and unpaid interest thereon to but excluding the redemption date, in accordance with the provisions
described in the accompanying prospectus under the heading “Description of Debt Securities—Redemption and Repurchase of Debt
Securities—Notice of Redemption,” as supplemented by the provisions below under the heading “Supplemental Information
Concerning Description of Notes—Optional Redemption.” We may also redeem the notes prior to the maturity thereof in accordance
with the provisions described in the accompanying prospectus under “Securities Offered on a Global Basis Through the Depositary—Tax
Redemption” and “Securities Offered on a Global Basis Through the Depositary—Payment
of Additional Amounts.”
We describe the basic features of the
notes in the section of the accompanying prospectus supplement called “Description of Notes.” In addition, we describe the
basic features of the notes during the fixed rate period (as defined below) in the section of the accompanying prospectus called “Description
of Debt Securities—Fixed Rate Debt Securities” and during the floating rate period (as defined below) in the section of the
accompanying prospectus called “Description of Debt Securities—Floating Rate Debt Securities,” in each case subject
to and as modified by the provisions described below.
We will issue the notes only in registered
form, which form is further described herein and under “Description of Notes—Forms of Notes” in the accompanying prospectus
supplement.
CDS Clearing and Depository Services
Inc. (“CDS”) will be designated as the depositary for any registered global security relating to the notes. We will issue
the notes only in book-entry form as global securities registered in the name of CDS & Co., CDS’s nominee, or in such other
name as CDS may designate with our prior consent. The sale of the notes will settle in immediately available funds through CDS on August
4, 2021 (4 New York business days after the date of this pricing supplement).
The notes will not be listed on any
securities exchange.
We describe how interest is calculated,
accrued and paid during the fixed rate period, including where a scheduled interest payment date is not a business day (the following
unadjusted business day convention), under “Description of Debt Securities—Fixed Rate Debt Securities” in the accompanying
prospectus. We describe how interest is calculated, accrued and paid during the floating rate period, including the adjustment of scheduled
interest payment dates for business days (except at maturity), under “Description of Debt Securities—Floating Rate Debt Securities”
in the accompanying prospectus.
Terms not defined herein have the meanings
given to such terms in the accompanying prospectus supplement and prospectus, as applicable.
Investing in the notes involves risks. See
“Risk Factors” on page PS-5.
The notes are not deposits
or savings accounts and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality,
nor are they obligations of, or guaranteed by, a bank.
The Securities and Exchange Commission
and state securities regulators have not approved or disapproved these securities, or determined if this pricing supplement or the accompanying
prospectus supplement or prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
|
Price
to Public
|
Agent’s
Commissions
|
Proceeds
to Company
|
Per note
|
CAD100,000
|
CAD350
|
CAD99,650
|
Total
|
CAD1,000,000,000
|
CAD3,500,000
|
CAD996,500,000
|
MORGAN STANLEY
|
SCOTIABANK
|
BMO CAPITAL MARKETS
|
TD SECURITIES
|
MUFG
|
NOTICE TO PROSPECTIVE INVESTORS IN THE EUROPEAN
ECONOMIC AREA
None
of this pricing supplement, the accompanying prospectus supplement nor the accompanying prospectus is a prospectus for the purposes of
the Prospectus Regulation (as defined below). This pricing supplement, the accompanying prospectus supplement and the accompanying prospectus
have been prepared on the basis that any offer of notes in any Member State of the European Economic Area (the “EEA”) will
only be made to a legal entity which is a qualified investor under the Prospectus Regulation (“Qualified Investors”). Accordingly
any person making or intending to make an offer in that Member State of notes which are the subject of any offering contemplated in this
pricing supplement, the accompanying prospectus supplement and the accompanying prospectus may only do so with respect to Qualified Investors.
Neither Morgan Stanley nor the managers have authorized, nor do they authorize, the making of any offer of notes other than to Qualified
Investors. The expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
PROHIBITION
OF SALES TO EEA RETAIL INVESTORS – The notes are not intended to be offered, sold or otherwise made available
to and should not be offered, sold or otherwise made available to any retail investor in the EEA. For these purposes, a retail investor
means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as amended
(“MiFID II”); or (ii) a customer within the meaning of Directive (EU) 2016/97 (the “Insurance Distribution Directive”),
where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified
investor as defined in the Prospectus Regulation. Consequently no key information document required by Regulation (EU) No 1286/2014, as
amended (the “PRIIPs Regulation”) for offering or selling the notes or otherwise making them available to retail investors
in the EEA has been prepared and therefore offering or selling the notes or otherwise making them available to any retail investor in
the EEA may be unlawful under the PRIIPs Regulation.
NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED
KINGDOM
PROHIBITION
OF SALES TO UK RETAIL INVESTORS – The notes are not intended to be offered, sold or otherwise made available to
and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom. For these purposes, a retail
investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565
as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended by the European Union
(Withdrawal Agreement) Act 2020 (“EUWA”); or (ii) a customer within the meaning of the provisions of the United Kingdom's
Financial Services and Markets Act 2000, as amended (the “FSMA”) and any rules or regulations made under the FSMA to implement
the Insurance Distribution Directive, where that customer would not qualify as a professional client, as defined in point (8) of Article
2(1) of Regulation (EU) No 600/2014 as it forms part of United Kingdom domestic law by virtue of the EUWA; or (iii) not a qualified investor
as defined in Article 2 of Regulation (EU) 2017/1129 as it forms part of United Kingdom domestic law by virtue of the EUWA. Consequently
no key information document required by Regulation (EU) No 1286/2014 as it forms part of United Kingdom domestic law by virtue of the
EUWA (the “UK PRIIPs Regulation”) for offering or selling the notes or otherwise making them available to retail investors
in the UK has been prepared and therefore offering or selling the notes or otherwise making them available to any retail investor in the
UK may be unlawful under the UK PRIIPs Regulation.
Fixed/Floating Rate Notes Due 2027
|
|
Aggregate Principal
|
|
Amount:
|
CAD1,000,000,000
|
Maturity Date:
|
August 4, 2027
|
Settlement Date
|
|
(Original Issue Date):
|
August 4, 2021 (4 New York business days after the date of this pricing supplement)
|
Interest Accrual Date:
|
August 4, 2021
|
Issue Price:
|
100%
|
Specified Currency:
|
Canadian dollars (“CAD”)
|
Redemption Percentage
|
|
at Maturity:
|
100%
|
Fixed Rate Period:
|
The period from and including the settlement date to but excluding August 4, 2026
|
Floating Rate Period:
|
The period from and including August 4, 2026 to but excluding the maturity date
|
Interest Rate:
|
During the fixed rate period, 1.779% per annum; during the floating rate period, the base rate plus 0.516% (to be determined by the Calculation Agent on each interest reset date)
|
Base Rate:
|
3-month CDOR
|
Spread:
|
Plus 0.516%
|
Index Maturity:
|
3 months
|
Index Currency:
|
CAD
|
Interest Payment Dates:
|
With respect to the fixed rate period, each February 4 and August 4, commencing February 4, 2022 to and including August 4, 2026; with respect to the floating rate period, each February 4, May 4, August 4 and November 4, commencing November 4, 2026 to and including the maturity date
|
Interest Payment Periods:
|
During the fixed rate period, semiannually in equal installments; during the floating rate period, quarterly
|
Interest Reset Dates:
|
Each interest payment date commencing August 4, 2026 , provided that the August 4, 2026 interest reset date shall not be adjusted for a non-business day
|
Interest Reset Period:
|
Quarterly
|
Interest Determination Dates:
|
Each interest reset date
|
Reporting Service:
|
Bloomberg Professional Service (page “CDOR03”)
|
Business Days:
|
Toronto and New York
|
Calculation Agent:
|
BNY Trust Company of Canada
|
Sub-Paying Agent:
|
BNY Trust Company of Canada
|
Denominations:
|
CAD100,000 and integral multiples of CAD1,000
|
CUSIP:
|
61747Y EE1
|
ISIN:
|
CA61747YEE10
|
Day Count Convention:
|
During the fixed rate period, Actual/365 (Fixed) when calculating interest accruals during any partial interest period and 30/360 when calculating amounts due on any interest payment date (also known as the Actual/Actual Canadian Compound Method); during the floating rate period, Actual/365
|
3-month CDOR:
|
The 3-month CAD-BA-CDOR is the inter-bank bid rate for Canadian dollar bankers acceptances expressed as a rate per annum published on the screen page Bloomberg Professional Service CDOR03 (or any successor page of Bloomberg Professional Service or a screen page of another agency) on the interest determination date at or about 10:15 a.m. (Toronto time) for the relevant interest payment period.
|
Other Provisions:
|
Optional make-whole redemption on or after February 4, 2022 and prior to August 4, 2026, on at least 5 but not more than 30 days’ prior notice, as described in the accompanying prospectus under the heading “Description of Debt Securities—Redemption and Repurchase of Debt Securities—Optional Make-whole Redemption of Debt Securities,” provided that, for purposes of the notes, the make-whole redemption price shall be equal to the greater of: (i) 100% of the principal amount of such notes to be redeemed and (ii) the sum of (a) the present value of the payment of principal on such notes to be redeemed and (b) the present values of the scheduled payments of interest on such notes to be redeemed that would have been payable from the date of redemption to August 4, 2026 (not including any portion of such payments of interest accrued to the date of redemption), each discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the GOC Bond Yield plus 23 basis points, as calculated by the premium calculation agent; plus, in either case, accrued and unpaid interest on the principal amount being redeemed to the redemption date.
|
|
|
|
“GOC
Bond Yield” on any date of determination means the arithmetic average of the interest rates
|
|
quoted
to the premium calculation agent by two major Canadian registered investment dealers selected by us as being the annual yield to maturity
on such date, assuming semi-annual compounding, which a non-callable Government of Canada bond would carry, if issued in Canadian dollars
in Canada, at 100% of its principal amount on the applicable date of redemption with a maturity date of August 4, 2026.
The GOC Bond Yield will be determined by the premium
calculation agent as set forth above on the third business day immediately preceding the applicable redemption date.
See also Terms of Notes
During the Floating Rate Period, Optional Redemption, Tax Redemption, and Payment of Additional Amounts
|
|
|
Terms not defined herein have the meanings given to such terms in
the accompanying prospectus supplement and prospectus, as applicable.
Risk Factors
For a discussion of the risk factors
affecting Morgan Stanley and its business, including market risk, credit risk, operational risk, liquidity risk, legal, regulatory and
compliance risk, risk management, competitive environment, international risk and acquisition, divestiture and joint venture risk, among
others, see “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020
and our current and periodic reports filed pursuant to the Securities Exchange Act of 1934, as amended (file number 001-11758), that are
incorporated by reference into this pricing supplement and the accompanying prospectus supplement and prospectus.
This section describes certain selected
risk factors relating to the notes. Please see “Risk Factors” in the accompanying prospectus for a complete list of risk factors
relating to the notes.
The
notes have early redemption risk. We may redeem the notes,
(i) in whole but not in part, on August 4, 2026, or (ii) in whole at any time or in part from time to time, on or after July 4,
2027, on at least 5 but not more than 30 days’ prior notice. It is more likely that
we will redeem the notes prior to their stated maturity date to the extent that the interest payable on the notes is greater than the
interest that would be payable on other instruments of ours of a comparable maturity, of comparable terms and of a comparable credit rating
trading in the market. If the notes are redeemed prior to their stated maturity date, you may have to re-invest the proceeds in a lower
interest rate environment.
Supplemental Information Concerning Description of
Notes
Terms of Notes During the Floating Rate Period
If
the above-referenced Bloomberg Professional Service CDOR03 page is not available, the calculation agent will request the principal Toronto
offices of three banks selected by us from the banks named in Schedule I of the Bank Act (Canada) to provide their bid rate quotations
(expressed as percentages per year) for Canadian dollar bankers’ acceptances in Canadian dollars having a 3-month term to maturity
as of 10:15 a.m. (Toronto time) on the interest determination date used for a principal amount equal to the aggregate principal amount
of the notes (or a term to maturity and principal amount as close as possible to the foregoing term to maturity and principal amount),
and the 3-month CDOR will be the arithmetic mean of the three bid rate quotations.
If
fewer than three bid rate quotations are provided as requested in the paragraph above, the 3-month CDOR will be the 3-month CDOR as determined
on the previous interest determination date or, in the case where there is no previous interest determination date, 3-month CDOR that
is most recently published prior to such date on the above-referenced Bloomberg Professional Service CDOR03 page.
Notwithstanding
the foregoing, if we or our designee determine that the 3-month CDOR has been permanently or indefinitely discontinued, then the calculation
agent shall use, as a substitute for 3-month CDOR and for each future interest payment date, the alternative reference rate selected or
recommended by the central bank, monetary authority, relevant regulatory supervisor or any similar institution (including any committee
or working group thereof), or identified through any other applicable regulatory or legislative action or guidance, that is consistent
with accepted market practice for debt obligations such as the notes (the “Alternative Rate”). As part of such substitution,
we or our designee shall make such adjustments to the Alternative Rate and the spread thereon, as well as the business day convention,
interest payment dates and related provisions and definitions, in each case that are consistent with accepted market practice or applicable
regulatory or legislative action or guidance for the use of such Alternative Rate for debt obligations such as the notes. If we or our
designee determine that there is no clear market consensus as to an Alternative Rate, we shall appoint in our sole discretion a financial
institution or investment bank of national standing in Canada (which may be an affiliate of ours) to determine an appropriate alternative
reference rate and adjustments thereto, and the decisions of such financial institution shall be binding on us, the calculation agent,
any designee, the holders of the notes and the beneficial owners of interests in the notes. If such financial institution is unable to
determine an appropriate alternative reference rate and adjustments, the 3-month CDOR for such interest period shall be the 3-month CDOR
for the immediately preceding interest period, and the process set forth in this paragraph to determine an Alternative Rate shall be repeated
for each subsequent interest period until such time as an Alternative Rate is determined.
Optional Redemption
In
addition to the optional make-whole redemption discussed above under “—Other Provisions,” we may, at our option, redeem
the notes, (i) in whole but not in part, on August 4, 2026, or (ii) in whole
at any time or in part from time to time, on or after July 4, 2027, on at least 5 but not more than
30 days’ prior notice, at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest on the notes
to but excluding the redemption date. If fewer than all of the notes are to be redeemed, the trustee will select, not more than 30 days
prior to the redemption date, the particular notes or portions thereof for redemption from the outstanding notes not previously called
for redemption in accordance with its procedures at the time of selection; provided, that if the notes are represented by one or more
global securities, such notes will be selected for redemption by the applicable depositary in accordance with its standard procedures
therefor.
On or before the respective redemption
date, we will deposit with the trustee money sufficient to pay the redemption price of and accrued interest on the notes to be redeemed
on that date. If such money is so deposited, on and after the redemption date interest will cease to accrue on the notes (unless we default
in the payment of the redemption price and accrued interest) and such notes will cease to be outstanding.
For information regarding notices
of redemption, see “Description of Debt Securities—Redemption and Repurchase of Debt Securities—Notice of Redemption”
in the accompanying prospectus.
The notes do not contain any provisions
affording the holders the right to require us to purchase the notes after the occurrence of any change in control event affecting us.
Tax Redemption
We
may redeem, in whole but not in part, the notes offered on a global basis through CDS at our option at any time prior to maturity,
upon the giving of a notice of tax redemption as described in the accompanying prospectus, at a redemption price equal to 100% of the
principal amount of those notes, together with accrued and unpaid interest to the date fixed for redemption, if we determine that we have
or will become obligated to pay additional amounts, as described below under “—Payment of Additional Amounts,” in accordance
with “Securities Offered on a Global Basis Through the Depositary—Tax Redemption” in the accompanying prospectus.
Payment of Additional Amounts
With respect
to the notes, we will, subject to certain exceptions and limitations set forth in the accompanying prospectus, pay the additional amounts
to the beneficial owner of the notes who is a U.S. Alien (as defined in the accompanying prospectus) as may be necessary in order that
every net payment of the principal of and interest on the notes and any other amounts payable on the notes, after withholding or deduction
for or on account of any present or future tax, assessment or governmental charge imposed upon or as a result of the payment by the United
States, or any political subdivision or taxing authority of or in the United States, will not be less than the amount provided for in
the notes to be then due and payable. See “Securities Offered on a Global Basis Through the Depositary—Payment of Additional
Amounts” in the accompanying prospectus.
Notes Denominated in a Foreign Currency
The notes
are denominated in Canadian dollars and a beneficial owner of interests in the notes will not have the right to receive all or a portion
of the payments of principal or interest in U.S. dollars.
Supplemental
Information Concerning Form of Securities
Global Securities; Book-Entry, Delivery and Form
The notes
will be issued in one or more registered notes in global form (i.e. global notes), initially deposited with CDS & Co., as nominee
for CDS. Beneficial interests in the global notes will be represented through book-entry accounts of financial institutions acting on
behalf of beneficial owners as direct and indirect participants in CDS. Investors may elect to hold interests in the global notes through
any of CDS (in Canada), or Euroclear Bank S.A./N.V. (“Euroclear”) or Clearstream Banking, société anonyme (“Clearstream,
Luxembourg”) (in Europe) if they are participants of such systems, or indirectly through organizations which are participants in
such systems. Euroclear and Clearstream, Luxembourg will hold interests on behalf of their participants through customers’ securities
accounts in their respective names on the books of their respective Canadian subcustodians, each of which is a Canadian schedule I chartered
bank (“Canadian Subcustodians”), which in turn will hold such interests in customers’ securities accounts in the names
of the Canadian Subcustodians on the books of CDS.
The notes
will be deposited with CDS & Co. as nominee of CDS for the benefit of owners of beneficial interests in the global notes, including
participants of Euroclear and Clearstream, Luxembourg. Principal and interest payments on the global notes deposited with CDS & Co.,
or any other nominee appointed by CDS, will be made on behalf of us to CDS & Co., or any other nominee appointed by CDS, and CDS will
distribute the payment received to the applicable clearing system.
For as
long as the notes are maintained in book-entry form at CDS, we and any paying agent shall treat CDS & Co., or any other nominee appointed
by CDS, as the sole holder of such notes for all purposes. Notes, which are represented by the global notes, will be transferable only
in accordance with the rules and procedures of CDS.
The holder
of the global notes shall be the only person entitled to receive payments in respect of notes represented by such global notes and we
will be discharged by payment to, or to the order of, the holder of such global notes for each amount so paid. Each of the persons shown
in the records of CDS as the beneficial holder of a particular nominal amount of notes represented by such global notes, must look solely
to CDS, as the case may be, for his or her share of each payment so made by us to, or to the order of, the holder of such global notes.
No person other than the holder of such global notes shall have any claim against us in respect of any payments due on such global notes.
In respect
of the notes, we will at all times maintain a sub-paying agent having an office in Toronto, Canada. All notices concerning the notes will
be validly given if given through the sub-paying agent.
Supplemental Information Concerning Securities Offered
on a Global Basis Through the Depositary
Global Clearance and Settlement Procedures
Initial
settlement for the notes will be made in immediately available Canadian dollar funds.
Secondary
market trading between CDS participants will be in accordance with market conventions applicable to transactions in book-based Canadian
domestic bonds. Secondary market trading between Euroclear participants and Clearstream, Luxembourg participants will occur in the ordinary
way in accordance with the applicable rules and operating procedures of Euroclear and Clearstream, Luxembourg and will be settled using
the procedures applicable to conventional Eurobonds, in immediately available funds.
Links have
been established among CDS, Euroclear, and Clearstream, Luxembourg to facilitate the initial issuance of the notes and cross-market transfers
of the notes associated with secondary market trading. CDS will be linked to Euroclear and Clearstream, Luxembourg through the CDS accounts
of the respective Canadian Subcustodians of Clearstream, Luxembourg and Euroclear.
Cross-market
transfers between persons holding directly or indirectly through CDS participants, on the one hand, and directly or indirectly through
Euroclear or Clearstream, Luxembourg participants, on the other, will be effected in CDS in accordance with CDS rules; however, such cross-market
transactions will require delivery of instructions to the relevant clearing system by the counterparty in such system in accordance with
its rules and procedures and within its established deadlines. The relevant clearing system will, if the transaction meets its settlement
requirements, deliver instructions to CDS directly or through its Canadian Subcustodian to take action to effect final settlement on its
behalf by delivering or receiving notes in CDS, and making or receiving payment in accordance with normal procedures for settlement in
CDS. Euroclear and Clearstream, Luxembourg participants may not deliver instructions directly to CDS or the Canadian Subcustodians.
Because
of time-zone differences, credits of notes received in Euroclear or Clearstream, Luxembourg as a result of a transaction with a CDS participant
will be made during subsequent securities settlement processing and dated the business day following the CDS settlement date. Such credits
or any transactions in such notes settled during such processing will be reported to the relevant Euroclear participants or Clearstream,
Luxembourg participants on such business day. Cash received in Euroclear or Clearstream, Luxembourg as a result of sales of notes by or
through a Euroclear participant or a Clearstream, Luxembourg participant to a CDS participant will be received with value on the CDS settlement
date but will be available in the relevant Euroclear or Clearstream, Luxembourg cash account only as of the business day following settlement
in CDS.
The information
in this section concerning CDS and CDS’s book-entry system has been obtained from sources we believe to be reliable, but we take
no responsibility for the accuracy thereof. CDS may change or discontinue the foregoing procedures at any time.
Notices
Notices
given to CDS, as holder of the notes, will be passed on to the beneficial owners of the notes in accordance with the standard rules and
procedures of CDS and its direct and indirect participants, including Clearstream, Luxembourg and Euroclear.
United States Federal Taxation
In the
opinion of our counsel, Davis Polk & Wardwell LLP, the notes should be treated as “variable rate debt instruments” denominated
in a currency (the “denomination currency”) other than the U.S. dollar for U.S. federal tax purposes, and will therefore be
subject to special rules under Section 988 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder.
See the discussion in the section of the accompanying prospectus supplement called “United States Federal Taxation―Tax Consequences
to U.S. Holders― Foreign Currency Notes” for further information about the treatment of the notes. The notes should be treated
as providing for a single fixed rate followed by a single qualified floating rate (“QFR”), as described in the sections of
the accompanying prospectus supplement called “United States Federal Taxation―Tax Consequences to U.S. Holders― Floating
Rate Notes―General” and “―Floating Rate Notes that Provide for Multiple Rates.” Under applicable Treasury
Regulations, in order to determine the amount of qualified stated interest (“QSI”) and original issue discount (“OID”)
in respect of the notes, an equivalent fixed rate debt instrument (denominated in CAD) must be constructed for the entire term of the
notes. The equivalent fixed rate debt instrument is constructed in the following manner: (i) first, the initial fixed rate is converted
to a QFR that would preserve the fair market value of the notes, and (ii) second, each QFR (including the QFR determined under (i) above)
is converted to a fixed rate substitute (which should generally be the value of that QFR as of the issue date of the notes). Under Treasury
Regulations applicable to certain options arising under the terms of a debt instrument, in determining the amount of QSI and OID, we should
be deemed to exercise our optional redemption right if doing so would reduce the yield on the equivalent
fixed rate
debt instrument. For the purpose of determining QSI and OID, the optional make-whole redemption should not be deemed to be exercised.
However, if, as of the issue date, redeeming the notes on August 4, 2026 would reduce the yield of the equivalent fixed rate debt instrument,
the notes should be treated as fixed rate debt instruments maturing on August 4, 2026 (the “instrument maturing August 2026”).
Under those circumstances, if the notes are not actually redeemed by us on August 4, 2026, solely for purposes of the OID rules, they
should be deemed retired and reissued for their principal amount, and should thereafter be treated as floating rate debt instruments with
a term of one year (the “1-year instrument”). The instrument maturing August 2026 would be treated as issued without OID,
and all payments of interest thereon would be treated as QSI. Interest on the 1-year instrument should generally be taken into account
when received or accrued, according to your method of tax accounting, but it is possible that the 1-year instrument could be subject to
the rules described under “United States Federal Taxation―Tax Consequences to U.S. Holders―Short-Term Notes”
in the accompanying prospectus supplement.
If, as
of the issue date, redeeming the notes on August 4, 2026 would not reduce the yield on the equivalent fixed rate debt instrument, the
rules under “United States Federal Taxation―Tax Consequences to U.S. Holders― Discount Notes―General”
must be applied to the equivalent fixed rate debt instrument to determine the amounts of QSI and OID on the notes. Under those circumstances,
the notes may be issued with OID.
A U.S.
holder is required to include any QSI in income in accordance with the U.S. holder’s regular method of accounting for U.S. federal
income tax purposes. U.S. holders will be required to include any OID in income for U.S. federal income tax purposes as it accrues, in
accordance with a constant yield method based on a compounding of interest. All amounts will be determined in the denomination currency
and then translated into U.S. dollars according to the rules described in the section of the accompanying prospectus supplement called
“United States Federal Taxation—Tax Consequences to U.S. Holders—Foreign Currency Notes.” QSI allocable to an
accrual period must be increased (or decreased) by the amount, if any, which the interest actually accrued or paid during an accrual period
(including the fixed rate payments made during the initial period) exceeds (or is less than) the interest assumed to be accrued or paid
during the accrual period under the equivalent fixed rate debt instrument.
Both U.S.
and non-U.S. holders of the notes should read the section of the accompanying prospectus supplement entitled “United States Federal
Taxation.”
You
should consult your tax adviser regarding all aspects of the U.S. federal tax consequences of an investment in the notes, as well as any
tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.
The
discussion in the preceding paragraphs under “United States Federal Taxation,” and the discussion contained in the section
entitled “United States Federal Taxation” in the accompanying prospectus supplement, insofar as they purport to describe provisions
of U.S. federal income tax laws or legal conclusions with respect thereto, constitute the full opinion of Davis Polk & Wardwell LLP
regarding the material U.S. federal tax consequences of an investment in the notes.
Supplemental Information Concerning Plan of Distribution;
Conflicts of Interest
On
July 29, 2021, we agreed to sell to the agents listed below, and they severally agreed to purchase, the principal amount of
notes set forth opposite their respective names below at a net price of 99.65%, plus accrued interest, if any, which we refer to as the
“purchase price” for the notes. The purchase price equals the stated issue price of 100%, plus accrued interest, if any, less
a combined management and underwriting commission of 0.35% of the principal amount of notes.
Name
|
Principal
Amount of Notes
|
Morgan Stanley & Co. LLC
|
CAD400,000,000
|
Scotia Capital Inc.
|
CAD200,000,000
|
BMO Nesbitt Burns Inc.
|
CAD150,000,000
|
TD Securities Inc.
|
CAD150,000,000
|
MUFG Securities (Canada), Ltd.
|
CAD100,000,000
|
Total
|
CAD1,000,000,000
|
We refer
to each of Morgan Stanley & Co. LLC, Scotia Capital Inc., BMO Nesbitt Burns Inc., TD Securities Inc. and MUFG Securities (Canada),
Ltd as an “agent” (and together as the “agents”) as such term is used under “Plan of Distribution (Conflicts
of Interest)” in the accompanying prospectus supplement.
Scotia
Capital Inc., BMO Nesbitt Burns Inc., TD Securities Inc. and MUFG Securities (Canada), Ltd are not U.S. registered broker-dealers and,
therefore, to the extent that they intend to effect any sales of the notes in the United States, they will do so through one or more U.S.
registered broker-dealers as permitted by FINRA regulations.
Morgan
Stanley & Co. LLC is our wholly-owned subsidiary. Mitsubishi UFJ Financial Group, Inc., the ultimate parent of MUFG Securities (Canada),
Ltd. (one of the agents), holds an approximately 20.2% interest in Morgan Stanley. This offering will be conducted in compliance with
the requirements of Rule 5121 of the Financial Industry Regulatory Authority, Inc., which is commonly referred to as FINRA, regarding
a FINRA member firm’s distribution of the securities of an affiliate and related conflicts of interest. In accordance with Rule
5121 of FINRA, Morgan Stanley & Co. LLC and MUFG Securities (Canada), Ltd. may not make sales in this offering to any discretionary
accounts without the prior written approval of the customer.
The agents
intend to offer the notes for sale in Canada only on a private placement basis to “accredited investors” within the meaning
of the applicable Canadian provincial securities laws, either directly or through affiliates or other dealers acting as selling agents.
Resales of the notes by purchasers will be subject to restrictions under Canadian securities laws. The rights and remedies available to
Canadian investors are governed by Canadian securities laws. Canadian investors may be subject to Canadian tax law and should consult
their own legal and tax advisors with respect to the Canadian tax consequences of owning the notes.
Each agent severally
(and not jointly) represents and warrants to, and agrees with, us that:
|
(a)
|
the sale and delivery of any notes to any purchaser who is a resident of Canada or otherwise subject
to the laws of Canada or who is purchasing for a principal who is a resident of Canada or otherwise subject to the laws of Canada (each
such purchaser or principal a “Canadian Purchaser”) by such agent shall be made so as to be exempt from the prospectus filing
requirements and exempt from, or in compliance with, the dealer registration requirements of all applicable securities laws, regulations,
rules, instruments, rulings and orders, including those applicable in each of the provinces and territories of Canada (“Canadian
Securities Laws”);
|
|
(b)
|
the agent (or its registered affiliate) is a dealer registered as an “investment dealer”
or “exempt market dealer” as defined under applicable Canadian Securities Laws or the agent (or one of its affiliates) is
exempt from the requirement to be registered as a dealer under applicable Canadian Securities Laws, and, in either case, the agent (and
any applicable affiliate) is otherwise in compliance with the representations, warranties, and agreements set out herein;
|
|
(c)
|
each Canadian Purchaser is entitled under the Canadian Securities Laws to acquire the notes without
the benefit of a prospectus qualified under the Canadian Securities Laws;
|
|
(d)
|
it will comply with all relevant Canadian Securities Laws concerning any resale of the notes and will
prepare, execute, deliver, and file all documentation required by the applicable Canadian Securities Laws to permit each resale by the
agents of notes to a Canadian Purchaser;
|
|
(e)
|
the offer and sale of the notes will not be made through or accompanied by any advertisement of the
notes, including, without limitation, in printed media of general and regular paid circulation, radio, television, or telecommunications,
including electronic display or any other form of advertising or as part of a general solicitation in Canada;
|
|
(f)
|
it has not provided and will not provide to any Canadian Purchaser any document or other material that
would constitute an offering memorandum (other than the preliminary and final version of the Canadian Offering Memorandum dated July 29,
2021 with respect to the private placement of the notes in Canada (the “Canadian Offering Memorandum”)) within the meaning
of Canadian Securities Laws;
|
|
(g)
|
it will ensure that each Canadian Purchaser is advised that no securities commission or other similar
regulatory authority in Canada has passed upon the Canadian Offering Memorandum or the merit of the notes described therein, nor has any
such securities commission or other similar regulatory authority in Canada made any recommendation or endorsement with respect to, the
notes;
|
|
(h)
|
it has not made and it will not make any written or oral representations to any Canadian Purchaser:
|
|
(i)
|
that any person will resell or repurchase the notes purchased by such Canadian Purchaser;
|
|
(ii)
|
that the notes will be freely tradeable by the Canadian Purchaser without any restrictions or hold
periods;
|
|
(iii)
|
that any person will refund the purchase price of the notes; or
|
|
(iv)
|
as to the future price or value of the notes; and
|
|
(i)
|
it will inform each Canadian Purchaser:
|
|
(i)
|
that the global certificate(s) representing the notes will not carry the legend prescribed by Section
2.5(2) of National Instrument 45-102 – Resale of Securities nor will a written notice containing such legend restriction notation
be delivered to any purchaser;
|
|
(ii)
|
that the notes will not be or become freely tradeable in Canada, and any resale of the notes must be
made in accordance with an exemption from, or pursuant to a transaction not subject to, the prospectus requirements of applicable Canadian
Securities Laws and that Canadian purchasers are advised to seek legal advice prior to any resale of the notes; and
|
|
(iii)
|
such Canadian Purchaser’s name and other specified information may be disclosed to the relevant
Canadian securities regulators or regulatory authorities and may become available to the public in accordance with applicable laws.
|
Notwithstanding the selling
and other restrictions set forth in “Plan of Distribution (Conflicts of Interest)” in the accompanying prospectus supplement,
the following applies with respect to securities offered or sold in the EEA:
Prohibition of Sales to EEA Retail Investors
The notes may not be offered,
sold or otherwise made available to any retail investor in the EEA. For the purposes of this provision:
(a) the
expression “retail investor” means a person who is one (or more) of the following:
|
(i)
|
a retail client as defined in point (11) of Article 4(1) of MiFID II; or
|
|
(ii)
|
a customer within the meaning of the Insurance Distribution Directive, where that customer would not qualify as a professional
client as defined in point (10) of Article 4(1) of MiFID II; or
|
|
(iii)
|
not a qualified investor as defined in the Prospectus Regulation; and
|
(b) the
expression “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer
and the notes to be offered so as to enable an investor to decide to purchase or subscribe for the notes.
Notwithstanding the
selling and other restrictions set forth in “Plan of Distribution (Conflicts of Interest)” in the accompanying prospectus
supplement, the following applies with respect to securities offered or sold in the United Kingdom:
Prohibition of Sales to United Kingdom Retail
Investors
The notes may not be offered,
sold or otherwise made available to any retail investor in the United Kingdom. For the purposes of this provision:
(a) the
expression “retail investor” means a person who is one (or more) of the following:
|
(i)
|
a retail client as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue
of the EUWA; or
|
|
(ii)
|
a customer within the meaning of the provisions of the FSMA and any rules or regulations made under the FSMA to implement the Insurance
Distribution Directive, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation
(EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA; or
|
|
(iii)
|
not a qualified investor as defined in Article 2 of Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the
EUWA; and
|
(b) the
expression “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer
and the notes to be offered so as to enable an investor to decide to purchase or subscribe for the notes.
The communication of this
pricing supplement, the accompanying prospectus supplement, the accompanying prospectus and any other document or materials relating to
the issue of the notes offered hereby is not being made, and such documents and/or materials have not been approved, by an authorized
person for the purposes of section 21 of the FSMA. Accordingly, such documents and/or materials are not being distributed to, and must
not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion
is only being made to those persons in the United Kingdom who have professional experience in matters relating to investments and who
fall within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended (the “Financial Promotion Order”)), or who fall within Article 49(2)(a) to (d) of the Financial
Promotion Order, or who are any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order (all such
persons together being referred to as "relevant persons"). In the United Kingdom, the notes offered hereby are only available
to, and any investment or investment activity to which this pricing supplement, the accompanying prospectus
supplement and the accompanying prospectus relates
will be engaged in only with, relevant persons. Any person in the United Kingdom that is not a relevant person should not act or rely
on this this pricing supplement, the accompanying prospectus supplement and the accompanying prospectus or any of their contents.
With respect to securities
to be offered or sold in the United Kingdom, the managers have represented and agreed, and each underwriter, dealer, other agent and remarketing
firm participating in the distribution of the securities will be required to represent and agree, that (1) it has only communicated or
caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity
(within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any securities in circumstances
in which Section 21(1) of the FSMA does not apply to Morgan Stanley, and (2) it has complied and will comply with all applicable provisions
of the FSMA with respect to anything done by it in relation to any securities in, from or otherwise involving the United Kingdom.
Validity
of the Notes
In
the opinion of Davis Polk & Wardwell LLP, as special counsel to Morgan Stanley, when the notes offered by this pricing supplement
have been executed and issued by Morgan Stanley, authenticated by the trustee pursuant to the Senior Debt Indenture (as defined in the
accompanying prospectus) and delivered against payment as contemplated herein, such notes will be valid and binding obligations of Morgan
Stanley, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’
rights generally, concepts of reasonableness and equitable principles of general applicability (including, without limitation, concepts
of good faith, fair dealing and the lack of bad faith), provided that such counsel expresses no opinion as to the effect of fraudulent
conveyance, fraudulent transfer or similar provision of applicable law on the conclusions expressed above. This opinion is given as of
the date hereof and is limited to the laws of the State of New York and the General Corporation Law of the State of Delaware. In addition,
this opinion is subject to customary assumptions about the trustee’s authorization, execution and delivery of the Senior Debt Indenture
and its authentication of the notes and the validity, binding nature and enforceability of the Senior Debt Indenture with respect to the
trustee, all as stated in the letter of such counsel dated November 16, 2020, which is Exhibit 5-a to the Registration Statement on Form
S-3 filed by Morgan Stanley on November 16, 2020. This opinion is also subject to the discussion, as stated in such letter, of the enforcement
of notes denominated in a foreign currency.
Morgan Stanley (NYSE:MS)
Historical Stock Chart
From Apr 2024 to May 2024
Morgan Stanley (NYSE:MS)
Historical Stock Chart
From May 2023 to May 2024