The information in this pricing
supplement is not complete and may be changed. We may not deliver these securities until a final pricing supplement is delivered.
This pricing supplement and the accompanying prospectus supplement and prospectus do not constitute an offer to sell these securities
and we are not soliciting an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.
Subject to Completion,
Preliminary Pricing Supplement dated January 23, 2018
PROSPECTUS Dated November 16, 2017
PROSPECTUS SUPPLEMENT Dated November 16, 2017
|
Pricing Supplement No. 197
to
Registration Statement No.
333-221595
Dated January , 2018
Rule 424(b)(2)
|
GLOBAL MEDIUM-TERM NOTES, SERIES
I
CAD , Floating Rate Senior
Notes Due 2021
We,
Morgan Stanley, are offering the notes described herein on a global basis. We may redeem the Global Medium-Term Notes, Series I,
CAD , Floating Rate Senior Notes Due 2021 (the “notes”), in whole but not in part, on October 15, 2020, 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” and in the section
of the accompanying prospectus called “Description of Debt Securities—Floating Rate Debt Securities,” 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 January 29, 2018 (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 on the notes, including where a scheduled interest payment date is not a business day, under “Description
of Debt Securities—Floating Rate Debt Securities” in the accompanying prospectus and “Interest Payment Dates”
below.
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-3.
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
|
CAD
|
CAD
|
CAD
|
Total
|
CAD
|
CAD
|
CAD
|
MORGAN STANLEY
PRIIPs
Regulation / Prospectus Directive / 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
2002/92/EC (the Insurance Mediation Directive), as amended, 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 Directive. 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.
Floating
Rate Notes Due 2021
|
Aggregate Principal Amount:
|
|
CAD
|
Maturity Date:
|
|
October 15, 2021
|
|
|
|
Settlement Date (Original Issue Date):
|
|
January 29, 2018 (4 New York
business days after the date of this pricing supplement)
|
Interest Accrual Date:
|
|
January 29, 2018
|
Issue Price:
|
|
%
|
Specified Currency:
|
|
Canadian dollars (“CAD”)
|
|
|
|
Redemption Percentage at Maturity:
|
|
100%
|
Base Rate:
|
|
3-month CDOR
|
Spread:
|
|
Plus %
|
Index Maturity:
|
|
3 months
|
Index Currency:
|
|
CAD
|
Initial Interest Rate:
|
|
The base rate plus %,
as determined by the calculation agent as of 10:00 am Toronto time on the settlement date.
|
Interest Payment Dates:
|
|
Quarterly payments on January
15, April 15, July 15 and October 15 of each year, commencing on April 15, 2018.
|
|
|
The day count convention
is Actual/365.
|
Interest Payment Period:
|
|
Quarterly
|
Interest Reset Dates:
|
|
Each interest payment date
|
Interest Reset Period:
|
|
Quarterly
|
Interest Determination Dates:
|
|
Each interest payment date
|
Reporting Service
|
|
Bloomberg Professional Service
(page “CDOR03”)
|
Business Days:
|
|
Toronto and New York
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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:
|
|
|
ISIN:
|
|
|
|
|
|
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 10:00 a.m. (Toronto time) for the relevant interest payment period.
|
Other Provisions:
|
|
General Terms of Notes, Optional
Redemption, Tax Redemption, and Payment of Additional Amounts (see below)
|
|
|
|
|
Terms not defined herein have the meanings given to such
terms in the accompanying prospectus supplement and prospectus, as applicable.
Supplemental Information Concerning Description
of Notes
General Terms of Notes
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 10:00 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,
as determined on the settlement date.
Optional Redemption
We may, at our option, redeem
the notes, in whole but not in part, on October 15, 2020, on at least 10 but not more than 60 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.
On or before the 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 will be treated as debt instruments denominated in a currency
other than the U.S. dollar for U.S. federal income tax purposes, and will therefore be subject to special rules under Section 988
of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury regulations thereunder. Please see
“United States Federal Taxation—Tax Consequences to U.S. Holders—Foreign Currency Notes” in the accompanying
prospectus supplement.
For
a description of the material U.S. federal income tax consequences and certain estate tax consequences of the purchase, ownership
and disposition of the notes, please refer to “United States Federal Taxation” in the accompanying prospectus supplement.
The discussion in the accompanying prospectus supplement does not address the consequences to taxpayers subject to special tax
accounting rules under Section 451(b) of the Code.
Both
U.S. investors and non-U.S. investors should consult their tax advisers 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 foreign 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.