Contingent Income Buffered Securities due August 12, 2027
Payments on the Securities Based on the Worst Performing of the S&P 500® Index and the Russell 2000® 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 provide for the regular payment of interest and provide a minimum payment at maturity of only 20% of the stated principal amount. The securities will pay a contingent quarterly coupon but only if the index closing value of each of the S&P 500® Index and the Russell 2000® Index on the related observation date is at or above 80% of its respective initial index value, which we refer to as the respective coupon barrier level. If the index closing value of either underlying index is less than the coupon barrier level for such index on any observation date, we will pay no interest for the related quarterly period. At maturity, if the final index value of each underlying index has appreciated, has remained unchanged or has declined by an amount less than or equal to the buffer amount of 20%, the payment at maturity will be the stated principal amount and the related contingent quarterly coupon. If, however, the final index value of either underlying index has declined from its initial index value by an amount greater than the buffer amount of 20%, investors will lose 1% for every 1% decline of the worst performing underlying index beyond the specified buffer amount, subject to the minimum payment at maturity of 20% of the stated principal amount. Accordingly, investors in the securities must be willing to accept the risk of losing up to 80% of the stated principal amount if either underlying index declines by an amount greater than the buffer amount, and also the risk of not receiving any quarterly coupons during the entire 3-year term of the securities. Because payments on the securities are based on the worst performing of the underlying indices, a decline beyond the respective coupon barrier level and/or by an amount greater than the respective buffer amount, as applicable, of either underlying index will result in few or no contingent quarterly coupons and/or a loss of your investment, as applicable, even if the other underlying index has appreciated or has not declined as much. Investors will not participate in any appreciation in either underlying index. The securities are for investors who are willing to risk their principal and seek an opportunity to earn interest at a potentially above-market rate and the limited protection provided by the buffer feature in exchange for the risk of receiving no quarterly interest if either underlying index closes below the coupon barrier level for such index on the observation dates. 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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S&P 500® Index (the “SPX Index”) and Russell 2000® Index (the “RTY 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 (see “Commissions and issue price” below)
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Pricing date:
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August 7, 2024
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Original issue date:
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August 12, 2024 (3 business days after the pricing date)
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Maturity date:
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August 12, 2027
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Contingent quarterly coupon:
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If, on any observation date, the index closing value of each underlying index is greater than or equal to its respective coupon barrier level, we will pay a contingent quarterly coupon at an annual rate of at least 7.40% (corresponding to approximately $18.50 per quarter per security) on the related contingent coupon payment date. The actual contingent quarterly coupon rate will be determined on the pricing date.
If, on any observation date, the closing value of either underlying index is less than the coupon barrier level for such index, no contingent quarterly coupon will be paid with respect to that observation date. It is possible that one or both underlying indices will remain below the respective coupon barrier level(s) for extended periods of time or even throughout the entire term of the securities so that you will receive few or no contingent quarterly coupons.
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Payment at maturity:
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Investors will receive on the maturity date a payment at maturity determined as follows:
If the final index value of each underlying index is greater than or equal to 80% of its respective initial index value, meaning that neither underlying index has decreased by an amount greater than the buffer amount of 20% from its respective initial index value:
the stated principal amount and the contingent quarterly coupon with respect to the final observation date
If the final index value of either underlying index is less than 80% of its respective initial index value, meaning that either underlying index has decreased by an amount greater than the buffer amount of 20% from its respective initial index value:
($1,000 × index performance factor of the worst performing underlying index ) + $200
Under these circumstances, the payment at maturity will be less than the stated principal amount of $1,000. However, under no circumstances will the payment at maturity be less than $200 per security.
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Terms continued on the following page
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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 $982.70 per security, or within $45.00 of that estimate. See “Investment Overview” beginning on page 3.
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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 28.
The securities involve risks not associated with an investment in ordinary debt securities. See “Risk Factors” beginning on page 10.
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.
References to “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