Fixed Income Securities due July 3, 2025
All Payments on the Securities Based on the Worst Performing of the Russell 2000® Index and the S&P 500® Index
Fully and Unconditionally Guaranteed by Morgan Stanley
Principal at Risk Securities
The securities offered are unsecured obligations of Morgan Stanley Finance LLC (“MSFL”) and are fully and unconditionally guaranteed by Morgan Stanley. The securities have the terms described in the accompanying prospectus supplement, index supplement and prospectus, as supplemented or modified by this document. The securities do not guarantee the repayment of principal. Instead, the securities offer the opportunity for investors to earn a fixed monthly coupon at an annual rate of at least 8.55% (to be determined on the pricing date). At maturity, if the index closing value of each underlying index has remained greater than or equal to 75% of the respective initial index value, which we refer to as the downside threshold level, on each index business day during the term of the securities, the payment at maturity will be the stated principal amount and the related monthly coupon. If, however, the index closing value of either underlying index is less than its respective downside threshold level on any index business day during the term of the securities, a trigger event will have occurred and investors will be fully exposed to the decline in the worst performing underlying index on a 1-to-1 basis and, if the final index value of either underlying index is less than its initial index value, investors will receive a payment at maturity that is less than the stated principal amount of the securities and could be zero. Accordingly, investors could lose their entire initial investment in the securities. The securities are for investors who are willing to risk their principal and seek to earn interest at a potentially above-market rate in exchange for the risk of losing some or all of their investment. Investors will not participate in any appreciation of either underlying index. The securities are notes issued as part of MSFL’s Series A Global Medium-Term Notes program.
All payments are subject to our credit risk. If we default on our obligations, you could lose some or all of your investment. These securities are not secured obligations and you will not have any security interest in, or otherwise have any access to, any underlying reference asset or assets.
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SUMMARY TERMS
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Issuer:
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Morgan Stanley Finance LLC
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Guarantor:
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Morgan Stanley
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Underlying indices:
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Russell 2000® Index (the “RTY Index”) and S&P 500® Index (the “SPX Index”)
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Aggregate principal amount:
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$
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Stated principal amount:
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$1,000 per security
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Issue price:
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$1,000 per security
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Pricing date:
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May 31, 2024
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Original issue date:
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June 5, 2024 (3 business days after the pricing date)
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Maturity date:
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July 3, 2025
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Monthly coupon:
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A fixed coupon at an annual rate of at least 8.55% (corresponding to approximately $7.125 per month per security, to be determined on the pricing date) will be paid on the securities on each coupon payment date
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Trigger event:
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A trigger event occurs if, on any index business day from but excluding the pricing date to and including the determination date, the closing level of either underlying index is less than its respective downside threshold level. If a trigger event occurs on any index business day during the term of the securities, you will be exposed to the downside performance of the worst performing underlying index at maturity.
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Payment at maturity:
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At maturity, investors will receive, in addition to the final monthly coupon payment, a payment at maturity determined as follows:
If a trigger event HAS NOT occurred on any index business day from but excluding the pricing date to and including the determination date: the stated principal amount
If a trigger event HAS occurred on any index business day from but excluding the pricing date to and including the determination date: (i) the stated principal amount multiplied by (ii) the index performance factor of the worst performing underlying index, subject to a maximum payment at maturity of the stated principal amount.
If a trigger event occurs and the final index value of either underlying index is less than its initial index value, the payment at maturity will be less than the stated principal amount of the securities and could be zero.
Under no circumstances will investors participate in any appreciation of either underlying index.
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Downside threshold level:
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With respect to the RTY Index: , which is 75% of its initial index value
With respect to the SPX Index: , which is 75% of its initial index value
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Initial index value:
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With respect to the RTY Index: , which is its index closing value on the pricing date
With respect to the SPX Index: , which is its index closing value on the pricing date
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Final index value:
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With respect to each index, the respective index closing value on the determination date
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Worst performing underlying index:
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The underlying index with the larger percentage decrease from the respective initial index value to the respective final index value
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Index performance factor:
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Final index value divided by the initial index value
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Coupon payment dates:
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Monthly, on the 5th day of each month, beginning July 5, 2024; provided that if any such day is not a business day, that monthly coupon will be paid on the next succeeding business day and no adjustment will be made to any coupon payment made on that succeeding business day. The monthly coupon for June 2025 will be paid on the maturity date.
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Determination date:
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June 30, 2025, subject to postponement for non-index business days and certain market disruption events.
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CUSIP / ISIN:
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61776MBA2 / US61776MBA27
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Listing:
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The securities will not be listed on any securities exchange.
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Agent:
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Morgan Stanley & Co. LLC (“MS & Co.”), an affiliate of MSFL and a wholly owned subsidiary of Morgan Stanley. See “Supplemental information regarding plan of distribution; conflicts of interest.”
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Estimated value on the pricing date:
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Approximately $985.20 per security, or within $35.00 of that estimate. See “Investment Summary” beginning on page 2.
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Commissions and issue price:
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Price to public(1)
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Agent’s commissions and fees(2)
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Proceeds to us(3)
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Per security
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$1,000
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$
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$
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Total
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$
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$
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$
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(1)The securities will be sold only to investors purchasing the securities in fee-based advisory accounts.
(2)MS & Co. expects to sell all of the securities that it purchases from us to an unaffiliated dealer at a price of $ per security, for further sale to certain fee-based advisory accounts at the price to public of $1,000 per security. MS & Co. will not receive a sales commission with respect to the securities. See “Supplemental information regarding plan of distribution; conflicts of interest.” For additional information, see “Plan of Distribution (Conflicts of Interest)” in the accompanying prospectus supplement.
(3)See “Use of proceeds and hedging” on page 27.
The securities involve risks not associated with an investment in ordinary debt securities. See “Risk Factors” beginning on page 7.
The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this document or the accompanying prospectus supplement, index supplement and prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The securities 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.
You should read this document together with the related prospectus supplement, index supplement and prospectus, each of which can be accessed via the hyperlinks below. When you read the accompanying prospectus supplement and index supplement, please note that all references in such supplements to the prospectus dated November 16, 2023, or to any sections therein, should refer instead to the accompanying prospectus dated April 12, 2024 or to the corresponding sections of such prospectus, as applicable. Please also see “Additional Terms of the Securities” and “Additional Information About the Securities” at the end of this document.
As used in this document, “we,” “us” and “our” refer to Morgan Stanley or MSFL, or Morgan Stanley and MSFL collectively, as the context requires.
Prospectus Supplement dated November 16, 2023 Index Supplement dated November 16, 2023 Prospectus dated April 12, 2024