CALCULATION
OF REGISTRATION FEE
|
|
Maximum Aggregate
|
|
Amount of Registration
|
Title
of Each Class of Securities Offered
|
|
Offering Price
|
|
Fee
|
|
|
|
|
|
Market-Linked
Notes due 2024
|
|
$350,000.00
|
|
$42.42
|
July 2019
Pricing Supplement No. 2,206
Registration Statement Nos. 333-221595;
333-221595-01
Dated July 31, 2019
Filed pursuant to Rule 424(b)(2)
M
organ
S
tanley
F
inance
LLC
Structured Investments
Opportunities in U.S. and International Equities
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket
Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
Fully and Unconditionally Guaranteed by Morgan
Stanley
The notes are unsecured obligations of Morgan Stanley Finance
LLC (“MSFL”) and are fully and unconditionally guaranteed by Morgan Stanley. The notes will pay no interest and will
have the terms described in the accompanying product supplement, index supplement and prospectus, as supplemented and modified
by this document. At maturity, we will pay per note the stated principal amount of $1,000 plus a supplemental redemption amount,
if any, based on the value of a basket of two indices on the determination date. These long-dated notes are for investors who are
concerned about principal risk but seek a return based on a basket of equity indices, and who are willing to forgo current income
in exchange for the repayment of principal at maturity plus the potential to receive a supplemental redemption amount, if any.
The notes 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.
FINAL TERMS
|
Issuer:
|
Morgan Stanley Finance LLC
|
Guarantor:
|
Morgan Stanley
|
Issue price:
|
$1,000 per note
|
Stated principal amount:
|
$1,000 per note
|
Aggregate principal amount:
|
$350,000
|
Pricing date:
|
July 31, 2019
|
Original issue date:
|
August 5, 2019 (3 business days after the pricing date)
|
Maturity date:
|
August 5, 2024
|
Interest:
|
None
|
Basket:
|
Basket component*
|
Ticker symbol*
|
Basket component weighting
|
Initial index value
|
Multiplier
|
|
S&P 500
®
Index (the “SPX Index”)
|
SPX
|
50%
|
2,980.38
|
0.016776384
|
|
EURO STOXX 50
®
Index (the “SX5E Index”)
|
SX5E
|
50%
|
3,466.85
|
0.014422314
|
|
* Ticker symbols are being provided for reference purposes only. We refer to the SPX Index and the SX5E Index, collectively, as the underlying indices.
|
Payment at maturity:
|
The payment due at maturity per $1,000 stated principal amount
will equal:
$1,000 + supplemental redemption amount, if any.
In no event will the payment due at maturity be
less than the stated principal amount, regardless of the performance of the underlying indices.
|
Supplemental redemption amount:
|
(i) $1,000
times
(ii) the basket percent change
times
(iii) the participation rate,
provided
that the supplemental redemption amount will not be less than $0.
|
Participation rate:
|
102%
|
Basket percent change:
|
(final basket closing value – initial basket value) / initial basket value
|
Listing:
|
The notes will not be listed on any securities exchange.
|
|
Terms continued on the following page
|
Agent:
|
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.”
|
Estimated value on the pricing date:
|
$972.70 per note. See “Investment Summary” on page 3.
|
Commissions and issue price:
|
Price to public
(1)
|
Agent’s commissions and fees
(2)
|
Proceeds to us
(3)
|
Per note
|
$1,000
|
$5
|
$995
|
Total
|
$350,000
|
$1,750
|
$348,250
|
|
(1)
|
The notes will be sold only to investors purchasing the securities in fee-based advisory accounts.
|
|
(2)
|
MS & Co. expects to sell all of the notes that
it purchases from us to an unaffiliated dealer at a price of $995 per note, for further sale to certain fee-based advisory accounts
at the price to public of $1,000 per note. MS & Co. will not receive a sales commission with respect to the notes. See “Supplemental
information regarding plan of distribution; conflicts of interest.” For additional information, see “Plan of Distribution
(Conflicts of Interest)” in the accompanying product supplement for equity-linked notes.
|
|
(3)
|
See “Use of proceeds and hedging” on page 18.
|
The notes
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 notes, or determined if this document or the accompanying
product supplement, index supplement and prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The notes are not bank deposits and are
not insured by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they obligations of, or guaranteed
by, a bank.
You should read this document together
with the related product supplement, index supplement and prospectus, each of which can be accessed via the hyperlinks below. Please
also see “Additional Terms of the Notes” and “Additional Information About the Notes” 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.
Product Supplement for Equity-Linked Notes dated November 16, 2017
Index Supplement dated November 16, 2017
Prospectus dated November 16, 2017
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
Terms continued from previous page:
|
Initial basket value:
|
The initial basket value is 100, which is equal to the sum of the products of (i) the initial index value of each basket component, as set forth under “Basket—Initial index value” above, and (ii) the multiplier for such basket component, as set forth under “Basket—Multiplier” above.
|
Final basket closing value:
|
The basket closing value on the determination date
|
Basket closing value:
|
On any date, the sum of the products of (i) the closing value of each basket component on such date, and (ii) the multiplier for such basket component.
|
Multiplier:
|
The multiplier for each basket component was set on the pricing date so that each basket component represents its applicable basket component weighting in the predetermined initial basket value of 100. Each multiplier will remain constant for the term of the notes.
|
Determination date:
|
July 31, 2024, subject to postponement for non-index business days and certain market disruption events
|
CUSIP:
|
61769HJV8
|
ISIN:
|
US61769HJV87
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
Investment Summary
Market-Linked Notes
The Market-Linked Notes due August 5, 2024 Based on the Value
of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index (the
“notes”) offer the potential for a supplemental redemption amount at maturity based on the closing value of a basket
of two indices on the determination date. The notes provide investors:
|
■
|
an opportunity to gain exposure to the indices comprising the basket
|
|
■
|
the repayment of principal at maturity, subject to our creditworthiness
|
|
■
|
102% participation in any appreciation of the basket over the term of the notes
|
|
■
|
no exposure to any decline of the final basket closing value below the initial basket value if the notes are held to maturity
|
At maturity, if the basket percent change is less than or equal
to zero, you will receive the stated principal amount of $1,000 per note, without any positive return on your investment. All payments
on the notes, including the repayment of principal at maturity, are subject to our credit risk.
Maturity:
|
5 years
|
Participation rate:
|
102%
|
Interest:
|
None
|
The original issue price of each note is $1,000. This price includes
costs associated with issuing, selling, structuring and hedging the notes, which are borne by you, and, consequently, the estimated
value of the notes on the pricing date is less than $1,000. We estimate that the value of each note on the pricing date is $972.70.
What goes into the estimated value on the pricing date?
In valuing the notes on the pricing date, we take into account
that the notes comprise both a debt component and a performance-based component linked to the underlying indices. The estimated
value of the notes is determined using our own pricing and valuation models, market inputs and assumptions relating to the underlying
indices, instruments based on the underlying indices, volatility and other factors including current and expected interest rates,
as well as an interest rate related to our secondary market credit spread, which is the implied interest rate at which our conventional
fixed rate debt trades in the secondary market.
What determines the economic terms of the notes?
In determining the economic terms of the notes, including the
participation rate, we use an internal funding rate, which is likely to be lower than our secondary market credit spreads and therefore
advantageous to us. If the issuing, selling, structuring and hedging costs borne by you were lower or if the internal funding rate
were higher, one or more of the economic terms of the notes would be more favorable to you.
What is the relationship between the estimated value on the
pricing date and the secondary market price of the notes?
The price at which MS & Co. purchases the notes in the secondary
market, absent changes in market conditions, including those related to the underlying indices, may vary from, and be lower than,
the estimated value on the pricing date, because the secondary market price takes into account our secondary market credit spread
as well as the bid-offer spread that MS & Co. would charge in a secondary market transaction of this type and other factors.
However, because the costs associated with issuing, selling, structuring and hedging the notes are not fully deducted upon issuance,
for a period of up to 6 months following the issue date, to the extent that MS & Co. may buy or sell the notes in the secondary
market, absent changes in market conditions, including those related to the underlying
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
indices, and to our secondary market credit spreads, it would
do so based on values higher than the estimated value. We expect that those higher values will also be reflected in your brokerage
account statements.
MS & Co. may, but is not obligated to, make a market in the
notes, and, if it once chooses to make a market, may cease doing so at any time.
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
Key Investment Rationale
Market-Linked Notes offer investors exposure to the performance
of an equally weighted basket composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index and
provide for the repayment of principal at maturity. They are for investors who are concerned about principal risk but seek a return
based on a basket of equity indices and who are willing to forgo current income in exchange for the repayment of principal at maturity
plus the potential to receive a supplemental redemption amount, if any.
Repayment
of Principal
|
The notes offer investors 102% upside exposure to any positive performance of the basket, while providing for the repayment of principal in full at maturity.
|
Upside
Scenario
|
The basket closing value on the determination date is greater than the initial basket value of 100, and, at maturity, the notes pay the stated principal amount of $1,000
plus
102% of the positive percent change from the initial basket value to the final basket closing value.
|
Par
Scenario
|
The final basket closing value is less than or equal to the initial basket value, and, at maturity, the notes pay only the stated principal amount of $1,000.
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
Hypothetical Payout on the
Notes
At maturity, for each $1,000 stated principal amount of notes
that you hold, you will receive the stated principal amount of $1,000
plus
a supplemental redemption amount, if any. The
supplemental redemption amount will be calculated as follows:
supplemental redemption amount
|
=
|
$1,000 x basket percent change x the participation rate
In no event will the payment due at maturity be less than the stated principal amount, regardless of the performance of the underlying indices.
|
where
|
|
|
basket percent change
|
=
|
(final basket closing value – initial basket value) / initial basket value
|
final basket closing value
|
=
|
the basket closing value on the determination date.
|
In no event will the payment due at maturity be less than the
stated principal amount.
Hypothetical Payment at Maturity
The table below illustrates the payment at maturity for each
note for a hypothetical range of basket percent change and does not cover the complete range of possible payouts at maturity. The
table reflects the participation rate of 102% and the initial basket value of 100.
Basket percent change
|
Final basket closing value
|
Stated principal amount
|
Participation rate
|
Supplemental redemption amount
|
Payment at maturity
|
Return on $1,000 note
|
100.00%
|
200
|
$1,000
|
102%
|
$1,020.00
|
$2,020.00
|
102.00%
|
90.00%
|
190
|
$1,000
|
102%
|
$918.00
|
$1,918.00
|
91.80%
|
80.00%
|
180
|
$1,000
|
102%
|
$816.00
|
$1,816.00
|
81.60%
|
70.00%
|
170
|
$1,000
|
102%
|
$714.00
|
$1,714.00
|
71.40%
|
60.00%
|
160
|
$1,000
|
102%
|
$612.00
|
$1,612.00
|
61.20%
|
50.00%
|
150
|
$1,000
|
102%
|
$510.00
|
$1,510.00
|
51.00%
|
40.00%
|
140
|
$1,000
|
102%
|
$408.00
|
$1,408.00
|
40.80%
|
30.00%
|
130
|
$1,000
|
102%
|
$306.00
|
$1,306.00
|
30.60%
|
20.00%
|
120
|
$1,000
|
102%
|
$204.00
|
$1,204.00
|
20.40%
|
10.00%
|
110
|
$1,000
|
102%
|
$102.00
|
$1,102.00
|
10.20%
|
5.00%
|
105
|
$1,000
|
102%
|
$51.00
|
$1,051.00
|
5.10%
|
0%
|
100
|
$1,000
|
N/A
|
$0.00
|
$1,000.00
|
0%
|
–10%
|
90
|
$1,000
|
N/A
|
$0.00
|
$1,000.00
|
0%
|
–20%
|
80
|
$1,000
|
N/A
|
$0.00
|
$1,000.00
|
0%
|
–30%
|
70
|
$1,000
|
N/A
|
$0.00
|
$1,000.00
|
0%
|
–40%
|
60
|
$1,000
|
N/A
|
$0.00
|
$1,000.00
|
0%
|
–50%
|
50
|
$1,000
|
N/A
|
$0.00
|
$1,000.00
|
0%
|
–60%
|
40
|
$1,000
|
N/A
|
$0.00
|
$1,000.00
|
0%
|
–70%
|
30
|
$1,000
|
N/A
|
$0.00
|
$1,000.00
|
0%
|
–80%
|
20
|
$1,000
|
N/A
|
$0.00
|
$1,000.00
|
0%
|
–90%
|
10
|
$1,000
|
N/A
|
$0.00
|
$1,000.00
|
0%
|
–100%
|
0
|
$1,000
|
N/A
|
$0.00
|
$1,000.00
|
0%
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
Risk Factors
The following is a non-exhaustive list
of certain key risk factors for investors in the notes. For further discussion of these and other risks you should read the section
entitled “Risk Factors” in the accompanying product supplement, index supplement and prospectus. You should also consult
with your investment, legal, tax, accounting and other advisers in connection with your investment in the notes.
|
■
|
The notes do not pay interest and may not pay more than the stated principal amount at maturity.
If the basket percent
change is less than or equal to zero, you will receive only the stated principal amount of $1,000 for each note you hold at maturity.
As the notes do not pay any interest, if the final basket closing value is not sufficiently higher than the initial basket value,
the overall return on the notes (the effective yield to maturity) may be less than the amount that would be paid on a conventional
debt security of ours of comparable maturity. The notes have been designed for investors who are willing to forgo market floating
interest rates in exchange for a supplemental redemption amount, if any, based on the basket closing value on the determination
date.
|
|
■
|
Changes in the value of the basket components may offset each other.
Value movements in the basket components may not
correlate with each other. At a time when the value of one basket component increases, the value of the other basket component
may decline. Therefore, in calculating the payment at maturity, increases in the value of one basket component may be moderated,
or wholly offset, by declines in the value of the other basket component.
|
|
■
|
The market price of the notes will be influenced by many unpredictable factors.
Several factors,
many of which are beyond our control, will influence the value of the notes in the secondary market and the price at which MS &
Co. may be willing to purchase or sell the notes in the secondary market, including the values of the basket components at any
time, the volatility (frequency and magnitude of changes in value) of the underlying indices, dividend rate on the stocks underlying
the underlying indices, interest and yield rates in the market, time remaining until
the notes mature, geopolitical conditions and economic, financial, political, regulatory
or judicial events that affect the underlying indices or equities markets generally and which may affect the closing values of
the underlying indices on any determination date and the actual or anticipated changes in our credit ratings or credit spreads.
Generally, the longer the time remaining to maturity, the more the market price of the notes will be affected by the other factors
described above. The values of the underlying indices may be, and have recently been, volatile, and we can give you no assurance
that the volatility will lessen. See “Historical Information” below. You may receive less, and possibly significantly
less, than the stated principal amount per note if you try to sell your notes prior to maturity.
|
|
■
|
There are risks associated with investments in notes linked to the value of foreign equity securities.
As the EURO STOXX
50
®
Index is one of the underlying indices, the notes are linked to the value of foreign equity securities. Investments
in notes linked to the value of foreign equity securities involve risks associated with the securities markets in those countries,
including risks of volatility in those markets, governmental intervention in those markets and cross-shareholdings in companies
in certain countries. Also, there is generally less publicly available information about foreign companies than about U.S. companies
that are subject to the reporting requirements of the United States Securities and Exchange Commission, and foreign companies are
subject to accounting, auditing and financial reporting standards and requirements different from those applicable to U.S. reporting
companies. The prices of securities issued in foreign markets may be affected by political, economic, financial and social factors
in those countries, or global regions, including changes in government, economic and fiscal policies and currency exchange laws.
Local securities markets may trade a small number of securities and may be unable to respond effectively to increases in trading
volume, potentially making prompt liquidation of holdings difficult or impossible at times. Moreover, the economies in such countries
may differ favorably or unfavorably from the economy in the United States in such respects as growth of gross national product,
rate of inflation, capital reinvestment, resources, self-sufficiency and balance of payment positions.
|
|
■
|
The notes are subject to our credit risk, and any actual or anticipated changes to our credit ratings or credit spreads
may adversely affect the market value of the notes.
You are dependent on our ability to pay all amounts due on the notes at
maturity and therefore you are subject to our credit risk. The notes are not
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
guaranteed by any other entity.
If we default on our obligations under the notes, your investment would be at risk and you could lose some or all of your investment.
As a result, the market value of the notes prior to maturity will be affected by changes in the market’s view of our creditworthiness.
Any actual or anticipated decline in our credit ratings or increase in the credit spreads charged by the market for taking our
credit risk is likely to adversely affect the market value of the notes.
|
■
|
As a finance subsidiary, MSFL has no independent operations and will have no independent assets
. As a finance subsidiary,
MSFL has no independent operations beyond the issuance and administration of its securities and will have no independent assets
available for distributions to holders of MSFL securities if they make claims in respect of such securities in a bankruptcy, resolution
or similar proceeding. Accordingly, any recoveries by such holders will be limited to those available under the related guarantee
by Morgan Stanley and that guarantee will rank pari passu with all other unsecured, unsubordinated obligations of Morgan Stanley.
Holders will have recourse only to a single claim against Morgan Stanley and its assets under the guarantee. Holders of securities
issued by MSFL should accordingly assume that in any such proceedings they would not have any priority over and should be treated
pari passu with the claims of other unsecured, unsubordinated creditors of Morgan Stanley, including holders of Morgan Stanley-issued
securities.
|
|
■
|
The amount payable on the notes is not linked to the value of the underlying indices at any time other than the determination
date.
The amount payable on the notes will be based on the basket closing value on the determination date, subject to postponement
for non-index business days and certain market disruption events. Even if the value of the basket appreciates prior to the determination
date but then drops by the determination date, the payment at maturity may be less, and may be significantly less, than it would
have been had the payment at maturity been linked to the value of the basket prior to such drop. Although the actual value of the
basket on the stated maturity date or at other times during the term of the notes may be higher than the final basket closing value,
the payment at maturity will be based solely on the final basket closing value.
|
|
■
|
The rate we are willing to pay for securities of this type, maturity and issuance size is likely to be lower than the rate
implied by our secondary market credit spreads and advantageous to us. Both the lower rate and the inclusion of costs associated
with issuing, selling, structuring and hedging the notes in the original issue price reduce the economic terms of the notes, cause
the estimated value of the notes to be less than the original issue price and will adversely affect secondary market prices.
Assuming no change in market conditions or any other relevant factors, the prices, if any, at which dealers, including MS &
Co., may be willing to purchase the notes in secondary market transactions will likely be significantly lower than the original
issue price, because secondary market prices will exclude the issuing, selling, structuring and hedging-related costs that are
included in the original issue price and borne by you and because the secondary market prices will reflect our secondary market
credit spreads and the bid-offer spread that any dealer would charge in a secondary market transaction of this type as well as
other factors.
|
The inclusion of the costs of issuing,
selling, structuring and hedging the notes in the original issue price and the lower rate we are willing to pay as issuer make
the economic terms of the notes less favorable to you than they otherwise would be.
However, because the costs associated
with issuing, selling, structuring and hedging the notes are not fully deducted upon issuance, for a period of up to 6 months following
the issue date, to the extent that MS & Co. may buy or sell the notes in the secondary market, absent changes in market conditions,
including those related to the underlying indices, and to our secondary market credit spreads, it would do so based on values higher
than the estimated value, and we expect that those higher values will also be reflected in your brokerage account statements.
|
■
|
The estimated value of the notes is determined by reference to our pricing and valuation models, which may differ from those
of other dealers and is not a maximum or minimum secondary market price.
These pricing and valuation models are proprietary
and rely in part on subjective views of certain market inputs and certain assumptions about future events, which may prove to be
incorrect. As a result, because there is no market-standard way to value these types of securities, our models may yield a higher
estimated value of the
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
notes than those generated by others,
including other dealers in the market, if they attempted to value the notes. In addition, the estimated value on the pricing date
does not represent a minimum or maximum price at which dealers, including MS & Co., would be willing to purchase your notes
in the secondary market (if any exists) at any time. The value of your notes at any time after the date of this document will vary
based on many factors that cannot be predicted with accuracy, including our creditworthiness and changes in market conditions.
See also “The market price of the notes will be influenced by many unpredictable factors” above.
|
■
|
Adjustments to the basket components could adversely affect the value of the notes
. The index publisher of a basket
component can add, delete or substitute the stocks underlying basket component, and can make other methodological changes that
could change the value of such basket component. Any of these actions could adversely affect the value of the notes. In addition
the index publisher of a basket component may discontinue or suspend calculation or publication of such basket component at any
time. In these circumstances, MS & Co., as the calculation agent, will have the sole discretion to substitute a successor index
that is comparable to the discontinued basket component and is permitted to consider indices that are calculated and published
by MS & Co. or any of its affiliates. If MS & Co. determines that there is no appropriate successor index on the determination
date, the index closing value on such determination date will be an amount based on the stocks underlying the discontinued index
at the time of such discontinuance, without rebalancing or substitution, computed by MS & Co, as calculation agent, in accordance
with the formula for calculating the index closing value last in effect prior to discontinuance of the index.
|
|
■
|
Investing in the notes is not equivalent to investing in the basket components; you
have no shareholder or other rights in the basket components and are exposed to the credit risk of Morgan Stanley.
Investing
in the notes is not equivalent to investing in the basket components. As an investor in the notes, you will not have voting rights
or the right to receive dividends or other distributions or any other rights with respect to the component stocks of either basket
component. Furthermore, investing in the notes is not equivalent to investing in the basket components or their component stocks.
In addition, you are subject to our credit risk.
|
|
■
|
The notes will not be listed on any securities exchange and secondary trading may be limited.
The notes will not be
listed on any securities exchange. Therefore, there may be little or no secondary market for the notes. MS & Co. may, but is
not obligated to, make a market in the notes and, if it once chooses to make a market, may cease doing so at any time. When it
does make a market, it will generally do so for transactions of routine secondary market size at prices based on its estimate of
the current value of the notes, taking into account its bid/offer spread, our credit spreads, market volatility, the notional size
of the proposed sale, the cost of unwinding any related hedging positions, the time remaining to maturity and the likelihood that
it will be able to resell the notes. Even if there is a secondary market, it may not provide enough liquidity to allow you to trade
or sell the notes easily. Since other broker-dealers may not participate significantly in the secondary market for the notes, the
price at which you may be able to trade your notes is likely to depend on the price, if any, at which MS & Co. is willing to
transact. If, at any time, MS & Co. were to cease making a market in the notes, it is likely that there would be no secondary
market for the notes. Accordingly, you should be willing to hold your notes to maturity.
|
|
■
|
The calculation agent, which is a subsidiary of Morgan Stanley and an affiliate of MSFL, will make determinations with respect
to the notes.
As calculation agent, MS & Co. has determined the initial index value and multiplier for each basket component,
will determine the final basket closing value and the basket percent change and will calculate the amount of cash you will receive
at maturity. Moreover, certain determinations made by MS & Co., in its capacity as calculation agent, may require it to exercise
discretion and make subjective judgments, such as with respect to the occurrence or non-occurrence of market disruption events
and the selection of a successor index or calculation of the basket closing value in the event of a discontinuance of any basket
component or a market disruption event with respect to any basket component. These potentially subjective determinations may affect
the payout to you at maturity. For further information regarding these types of determinations, see “Description of Equity-Linked
Notes—Supplemental Redemption Amount,” “—Calculation Agent and Calculations,” “—Alternate
Exchange Calculation in the Case of an Event of Default” and “—Discontinuance of Any Underlying Index; Alteration
of Method of Calculation” in the
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
accompanying product supplement.
In addition, MS & Co. has determined the estimated value of the notes on the pricing date.
|
■
|
Hedging and trading activity by our affiliates could potentially adversely affect the value of the notes.
One or more
of our affiliates and/or third-party dealers have carried out, and will continue to carry out, hedging activities related to the
notes (and to other instruments linked to the underlying indices or their component stocks), including trading in the component
stocks of the underlying indices and in other instruments related to the underlying indices. As a result, these entities may be
unwinding or adjusting hedge positions during the term of the notes, and the hedging strategy may involve greater and more frequent
dynamic adjustments to the hedge as the determination date approaches. Some of our affiliates also trade the component stocks of
the underlying indices and other financial instruments related to the underlying indices on a regular basis as part of their general
broker-dealer and other businesses. Any of these hedging or trading activities on or prior to the pricing date could have increased
the initial index values, and, therefore, could have increased the values at or above which the underlying indices must close on
the determination date before an investor receives a payment at maturity that exceeds the stated principal amount of the notes.
Additionally, such hedging or trading activities during the term of the notes, including on the determination date, could adversely
affect the closing values of the underlying indices on such determination date, and, accordingly, the amount of cash an investor
will receive at maturity.
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
Basket Overview
S&P 500
®
Index
The S&P 500
®
Index, which
is calculated, maintained and published by S&P Dow Jones Indices LLC (“S&P”), consists of stocks of 500 component
companies selected to provide a performance benchmark for the U.S. equity markets. The calculation of the S&P 500
®
Index is based on the relative value of the float adjusted aggregate market capitalization of the 500 component companies as of
a particular time as compared to the aggregate average market capitalization of 500 similar companies during the base period of
the years 1941 through 1943. For additional information about the S&P 500
®
Index, see the information set forth
under “S&P 500
®
Index” in the accompanying index supplement.
“Standard & Poor’s
®
,” “S&P
®
,”
“S&P 500
®
,” “Standard & Poor’s 500” and “500” are trademarks of
Standard and Poor’s Financial Services LLC. See “S&P 500
®
Index” in the accompanying index
supplement.
EURO STOXX 50
®
Index
The EURO STOXX 50
®
Index was created by STOXX
®
Limited, which is owned by Deutsche Börse AG and SIX Group AG. Publication of the EURO STOXX 50
®
Index began
on February 26, 1998, based on an initial index value of 1,000 at December 31, 1991. The EURO STOXX 50
®
Index is
composed of 50 component stocks of market sector leaders from within the STOXX 600 Supersector Indices, which includes stocks selected
from the Eurozone. The component stocks have a high degree of liquidity and represent the largest companies across all market sectors.
For additional information about the EURO STOXX 50
®
Index, see the information set forth under “EURO STOXX
50
®
Index” in the accompanying index supplement.
“EURO STOXX 50
®
” and “STOXX
®
”
are registered trademarks of STOXX Limited. For more information, see “EURO STOXX 50
®
Index” in the
accompanying index supplement.
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
Information as of market close on July 31, 2019:
Basket Component Information as of July 31, 2019
|
|
Ticker Symbol
|
Current Basket Component Closing Value
|
52 Weeks Ago
|
52 Week High
|
52 Week Low
|
S&P 500
®
Index
|
SPX
|
2,980.38
|
2,816.29
|
3,025.86 (on 7/26/2019)
|
2,351.10 (on 12/24/2018)
|
EURO STOXX 50
®
Index
|
SX5E
|
3,466.85
|
3,525.49
|
3,544.15 (on 7/4/2019)
|
2,937.36 (on 12/27/2018)
|
The following graph is calculated based on an initial basket
value of 100 on January 1, 2014 (assuming that each basket component is weighted as described in “Basket” on the cover
page) and illustrates the effect of the offset and/or correlation among the basket components during such period. The graph does
not take into account the terms of the notes, nor does it attempt to show in any way your expected return on an investment in the
notes. The historical performance of the basket should not be taken as an indication of its future performance.
Basket Historical Performance
January 1, 2014 to July
31, 2019
|
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
Historical Information
The following tables set forth the published high and low closing
values as well as end-of-quarter closing values for each of the basket components for each quarter in the period from January 1,
2014 through July 31, 2019. The closing values on July 31, 2019 were (i) in the case of the SPX Index, 2,980.38, and (ii) in the
case of the SX5E Index, 3,466.85. The related graphs set forth the daily closing values for each of the basket components in the
same period. We obtained the information in the tables and graphs below from Bloomberg Financial Markets, without independent verification.
The historical information of the basket components should not be taken as an indication of their future performance, and no assurance
can be given as to the basket closing value on the determination date.
S&P 500
®
Index
|
High
|
Low
|
Period End
|
2014
|
|
|
|
First Quarter
|
1,878.04
|
1,741.89
|
1,872.34
|
Second Quarter
|
1,962.87
|
1,815.69
|
1,960.23
|
Third Quarter
|
2,011.36
|
1,909.57
|
1,972.29
|
Fourth Quarter
|
2,090.57
|
1,862.49
|
2,058.90
|
2015
|
|
|
|
First Quarter
|
2,117.39
|
1,992.67
|
2,067.89
|
Second Quarter
|
2,130.82
|
2,057.64
|
2,063.11
|
Third Quarter
|
2,128.28
|
1,867.61
|
1,920.03
|
Fourth Quarter
|
2,109.79
|
1,923.82
|
2,043.94
|
2016
|
|
|
|
First Quarter
|
2,063.95
|
1,829.08
|
2,059.74
|
Second Quarter
|
2,119.12
|
2,000.54
|
2,098.86
|
Third Quarter
|
2,190.15
|
2,088.55
|
2,168.27
|
Fourth Quarter
|
2,271.72
|
2,085.18
|
2,238.83
|
2017
|
|
|
|
First Quarter
|
2,395.96
|
2,238.83
|
2,362.72
|
Second Quarter
|
2,453.46
|
2,328.95
|
2,423.41
|
Third Quarter
|
2,519.36
|
2,409.75
|
2,519.36
|
Fourth Quarter
|
2,690.16
|
2,519.36
|
2,673.61
|
2018
|
|
|
|
First Quarter
|
2,872.87
|
2,581.00
|
2,640.87
|
Second Quarter
|
2,786.85
|
2,581.88
|
2,718.37
|
Third Quarter
|
2,930.75
|
2,713.22
|
2,913.98
|
Fourth Quarter
|
2,925.51
|
2,351.10
|
2,506.85
|
2019
|
|
|
|
First Quarter
|
2,854.88
|
2,447.89
|
2,834.40
|
Second Quarter
|
2,954.18
|
2,744.45
|
2,941.76
|
Third Quarter (through July 31, 2019)
|
3,025.86
|
2,964.33
|
2,980.38
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
S&P 500
®
Index
Daily Index Closing Values
January 1, 2014 to July
31, 2019
|
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
EURO
STOXX 50
®
Index
|
High
|
Low
|
Period
End
|
2014
|
|
|
|
First Quarter
|
3,172.43
|
2,962.49
|
3,161.60
|
Second Quarter
|
3,314.80
|
3,091.52
|
3,228.24
|
Third Quarter
|
3,289.75
|
3,006.83
|
3,225.93
|
Fourth Quarter
|
3,277.38
|
2,874.65
|
3,146.43
|
2015
|
|
|
|
First Quarter
|
3,731.35
|
3,007.91
|
3,697.38
|
Second Quarter
|
3,828.78
|
3,424.30
|
3,424.30
|
Third Quarter
|
3,686.58
|
3,019.34
|
3,100.67
|
Fourth Quarter
|
3,506.45
|
3,069.05
|
3,267.52
|
2016
|
|
|
|
First Quarter
|
3,267.52
|
2,680.35
|
3,004.93
|
Second Quarter
|
3,151.69
|
2,697.44
|
2,864.74
|
Third Quarter
|
3,091.66
|
2,761.37
|
3,002.24
|
Fourth Quarter
|
3,290.52
|
2,954.53
|
3,290.52
|
2017
|
|
|
|
First Quarter
|
3,500.93
|
3,230.68
|
3,500.93
|
Second Quarter
|
3,658.79
|
3,409.78
|
3,441.88
|
Third Quarter
|
3,594.85
|
3,388.22
|
3,594.85
|
Fourth Quarter
|
3,697.40
|
3,503.96
|
3,503.96
|
2018
|
|
|
|
First Quarter
|
3,672.29
|
3,278.72
|
3,361.50
|
Second Quarter
|
3,592.18
|
3,340.35
|
3,395.60
|
Third Quarter
|
3,527.18
|
3,293.36
|
3,399.20
|
Fourth Quarter
|
3,414.16
|
2,937.36
|
3,001.42
|
2019
|
|
|
|
First Quarter
|
3,409.00
|
2,954.66
|
3,351.71
|
Second Quarter
|
3,514.62
|
3,280.43
|
3,473.69
|
Third Quarter (through July 31, 2019)
|
3,544.15
|
3,462.85
|
3,466.85
|
EURO STOXX 50
®
Index
Daily Index Closing Values
January 1, 2014 to July
31, 2019
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
Additional Terms of the Notes
Please read this information in conjunction
with the summary terms on the front cover of this document.
Additional Terms:
|
If the terms described herein are inconsistent with those described in the accompanying product supplement, index supplement or prospectus, the terms described herein shall control.
|
Underlying
index publishers:
|
With respect to the SPX Index, S&P Dow Jones Indices LLC,
or any successor thereof.
With respect to the SX5E Index, STOXX Limited, or any successor
thereof.
|
Denominations:
|
$1,000 and integral multiples thereof
|
Interest:
|
None
|
Bull
or bear notes:
|
Bull notes
|
Call
right:
|
The notes are not callable prior to the maturity date.
|
Postponement of maturity date:
|
If the determination date for any basket component is postponed so that it falls less than two business days prior to the scheduled maturity date, the maturity date will be postponed to the second business day following the final determination date as postponed, by which date the basket percent change will have been determined.
|
Equity-linked notes:
|
All references to “equity-linked notes” or related terms in the accompanying product supplement for equity-linked notes shall be deemed to refer to market-linked notes when read in conjunction with this document.
|
Trustee:
|
The Bank of New York Mellon
|
Calculation agent:
|
MS & Co.
|
Issuer notice to registered
note holders, the trustee and the depositary:
|
In the event that the maturity date is postponed due to postponement
of the determination date, the issuer shall give notice of such postponement and, once it has been determined, of the date to which
the maturity date has been rescheduled (i) to each registered holder of the notes by mailing notice of such postponement by first
class mail, postage prepaid, to such registered holder’s last address as it shall appear upon the registry books, (ii) to
the trustee by facsimile, confirmed by mailing such notice to the trustee by first class mail, postage prepaid, at its New York
office and (iii) to The Depository Trust Company (the “depositary”) by telephone or facsimile, confirmed by mailing
such notice to the depositary by first class mail, postage prepaid. Any notice that is mailed to a registered holder of the notes
in the manner herein provided shall be conclusively presumed to have been duly given to such registered holder, whether or not
such registered holder receives the notice. The issuer shall give such notice as promptly as possible, and in no case later than
(i) with respect to notice of postponement of the maturity date, the business day immediately preceding the scheduled maturity
date, and (ii) with respect to notice of the date to which the maturity date has been rescheduled, the business day immediately
following the actual determination date.
The issuer shall, or shall cause the calculation agent to, (i)
provide written notice to the trustee at its New York office, on which notice the trustee may conclusively rely, and to the depositary
of the payment at maturity on or prior to 10:30 a.m. (New York City time) on the business day preceding the maturity date and (ii)
deliver the aggregate cash amount due with respect to the notes to the trustee for delivery to the depositary, as holder of the
notes, on the maturity date.
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
Additional Information About the Notes
Additional Information:
|
Minimum
ticketing size:
|
$1,000 / 1 note
|
Tax
considerations:
|
In the opinion of our counsel, Davis Polk & Wardwell LLP,
the notes should be treated as “contingent payment debt instruments” for U.S. federal income tax purposes, as described
in the section of the accompanying product supplement called “United States Federal Taxation—Tax Consequences to U.S.
Holders.” Under this treatment, if you are a U.S. taxable investor, you generally will be subject to annual income tax based
on the “comparable yield” (as defined in the accompanying product supplement) of the notes, adjusted upward or downward
to reflect the difference, if any, between the actual and projected amount of the payments on the notes. In addition, any gain
recognized by U.S. taxable investors on the sale or exchange, or at maturity, of the notes generally will be treated as ordinary
income. We have determined that the “comparable yield” for the notes is a rate of 2.7542% per annum, compounded semi-annually.
Based on the comparable yield set forth above, the “projected payment schedule” for a note (assuming an issue price
of $1,000) consists of a single projected amount equal to $ 1,146.5985 due at maturity.
You should read the discussion under “United States Federal
Taxation” in the accompanying product supplement concerning the U.S. federal income tax consequences of an investment in
the notes.
The following table states the amount of interest income (without
taking into account any adjustment to reflect the difference, if any, between the actual and the projected amount of the contingent
payment on a note) that will be deemed to have accrued with respect to a note for each accrual period (assuming a day count convention
of 30 days per month and 360 days per year), based upon the comparable yield set forth above.
|
|
ACCRUAL
PERIOD
|
INTEREST
INCOME DEEMED TO ACCRUE DURING ACCRUAL PERIOD (PER NOTE)
|
TOTAL
INTEREST INCOME DEEMED TO HAVE ACCRUED FROM ORIGINAL ISSUE DATE (PER NOTE) AS OF END OF ACCRUAL PERIOD
|
|
Original Issue Date through December 31, 2019
|
$11.0933
|
$11.0933
|
|
January 1, 2020 through June 30, 2020
|
$13.9238
|
$25.0171
|
|
July 1, 2020 through December 31, 2020
|
$14.1155
|
$39.1326
|
|
January 1, 2021 through June 30, 2021
|
$14.3099
|
$53.4425
|
|
July 1, 2021 through December 31, 2021
|
$14.5070
|
$67.9495
|
|
January 1, 2022 through June 30, 2022
|
$14.7067
|
$82.6562
|
|
July 1, 2022 through December 31, 2022
|
$14.9093
|
$97.5655
|
|
January 1, 2023 through June 30, 2023
|
$15.1146
|
$112.6801
|
|
July 1, 2023 through December 31, 2023
|
$15.3227
|
$128.0028
|
|
January 1, 2024 through June 30, 2024
|
$15.5337
|
$143.5365
|
|
July 1, 2024 through the Maturity Date
|
$3.0620
|
$146.5985
|
|
The comparable yield and the projected payment schedule are
not provided for any purpose other than the determination of U.S. Holders’ accruals of interest income and adjustments thereto
in respect of the notes for U.S. federal income tax purposes, and we make no representation regarding the actual amount of the
payments that will be made on the notes.
If you are a non-U.S. investor, please also read the section
of the accompanying product supplement called “United States Federal Taxation—Tax Consequences to Non-U.S. Holders.”
As discussed in the accompanying product supplement,
Section 871(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and Treasury regulations promulgated
thereunder (“Section 871(m)”) generally impose a 30% (or a lower applicable treaty rate) withholding tax on dividend
equivalents paid or deemed paid to Non-U.S. Holders with respect to certain financial instruments linked to U.S. equities or indices
that include U.S. equities (each, an “Underlying Security”). Subject to certain exceptions, Section 871(m) generally
applies to securities that substantially replicate the economic performance of one or more Underlying Securities, as determined
based on tests set forth in the applicable Treasury regulations (a “Specified Security”). However, pursuant to an
Internal Revenue Service (“IRS”) notice, Section 871(m) will not apply to securities issued before January 1, 2021
that do not have a delta of one with respect to any Underlying Security. Based on our determination that the notes do not have
a delta of one with respect to any Underlying Security, our counsel is of the opinion that the notes should not be Specified Securities
and, therefore, should not be subject to Section 871(m). Our determination is not binding on the IRS, and the IRS may disagree
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
|
with this determination. Section 871(m) is complex and its application
may depend on your particular circumstances, including whether you enter into other transactions with respect to an Underlying
Security.
If withholding is required, we will not be required to pay any additional amounts with respect to the amounts so withheld.
You should consult your tax adviser regarding the potential application of Section 871(m) to the notes.
In addition, as discussed in the accompanying product supplement,
withholding rules commonly referred to as “FATCA” apply to certain financial instruments (including the notes) with
respect to payments of amounts treated as interest and to any payment of gross proceeds of a disposition (including retirement)
of such an instrument. However, recently proposed regulations (the preamble to which specifies that taxpayers are permitted to
rely on them pending finalization) eliminate the withholding requirement on payments of gross proceeds of a taxable disposition.
You should consult your tax adviser regarding all aspects
of the U.S. federal income 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. Moreover, neither this document nor the accompanying product supplement addresses
the consequences to taxpayers subject to special tax accounting rules under Section 451(b) of the Code.
The discussion in the preceding paragraphs under “Tax
considerations” and the discussion contained in the section entitled “United States Federal Taxation” in the
accompanying product 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.
|
Use
of proceeds and hedging:
|
The proceeds from the sale of the notes will be used by us for
general corporate purposes. We will receive, in aggregate, $1,000 per note issued, because, when we enter into hedging transactions
in order to meet our obligations under the notes, our hedging counterparty will reimburse the cost of the agent’s commissions.
The costs of the notes borne by you and described on page 3 above comprise the agent’s commissions and the cost of issuing,
structuring and hedging the notes.
On or prior to the pricing date, we hedged our anticipated exposure
in connection with the notes by entering into hedging transactions with our affiliates and/or third party dealers. We expect our
hedging counterparties to have taken positions in the stocks constituting the underlying indices and in futures and/or options
contracts on the underlying indices or the component stocks of the underlying indices listed on major securities markets. Such
purchase activity could have increased the initial index values, and, therefore, could have increased the values at or above which
the underlying indices must close on the determination date before you would receive at maturity a payment that exceeds the stated
principal amount of the notes. In addition, through our affiliates, we are likely to modify our hedge position throughout the term
of the notes, including on the determination date, by purchasing and selling the stocks constituting the underlying indices, futures
or options contracts on the underlying indices or their component stocks listed on major securities markets or positions in any
other available securities or instruments that we may wish to use in connection with such hedging activities. As a result, these
entities may be unwinding or adjusting hedge positions during the term of the notes, and the hedging strategy may involve greater
and more frequent dynamic adjustments to the hedge as the determination date approaches. We cannot give any assurance that our
hedging activities will not affect the values of the underlying indices, and, therefore, adversely affect the value of the notes
or the payment you will receive at maturity. For further information on our use of proceeds and hedging, see “Use of Proceeds
and Hedging” in the accompanying product supplement.
|
Benefit plan investor considerations:
|
Each fiduciary of a pension, profit-sharing
or other employee benefit plan subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)
(a “Plan”), should consider the fiduciary standards of ERISA in the context of the Plan’s particular circumstances
before authorizing an investment in the notes. Accordingly, among other factors, the fiduciary should consider whether the investment
would satisfy the prudence and diversification requirements of ERISA and would be consistent with the documents and instruments
governing the Plan.
In addition, we and certain of our affiliates,
including MS & Co., may each be considered a “party in interest” within the meaning of ERISA, or a “disqualified
person” within the meaning of the Internal Revenue Code of 1986, as amended (the “Code”), with respect to many
Plans, as well as many individual retirement accounts and Keogh plans (such accounts and plans, together with other plans, accounts
and arrangements subject to Section 4975 of the Code, also “Plans”). ERISA Section 406 and Code Section 4975 generally
prohibit transactions between Plans and parties in interest or disqualified persons. Prohibited transactions within the meaning
of ERISA or the Code would likely arise, for example, if the notes are acquired by or with the assets of a Plan with respect to
which MS & Co. or any of its affiliates is a service provider or other party in interest, unless the notes are acquired pursuant
to an exemption from the “prohibited transaction” rules. A violation of these “prohibited transaction”
rules could result in an excise tax or other liabilities under ERISA and/or Section 4975 of the Code for those persons, unless
exemptive relief is available under an applicable statutory or
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
|
administrative exemption.
The U.S.
Department of Labor has issued five prohibited transaction class exemptions (“PTCEs”) that may provide exemptive relief
for direct or indirect prohibited transactions resulting from the purchase or holding of the notes. Those class exemptions are
PTCE 96-23 (for certain transactions determined by in-house asset managers), PTCE 95-60 (for certain transactions involving insurance
company general accounts), PTCE 91-38 (for certain transactions involving bank collective investment funds), PTCE 90-1 (for certain
transactions involving insurance company separate accounts) and PTCE 84-14 (for certain transactions determined by independent
qualified professional asset managers). In addition, ERISA Section 408(b)(17) and Section 4975(d)(20) of the Code provide an exemption
for the purchase and sale of securities and the related lending transactions, provided that neither the issuer of the securities
nor any of its affiliates has or exercises any discretionary authority or control or renders any investment advice with respect
to the assets of the Plan involved in the transaction and provided further that the Plan pays no more, and receives no less, than
“adequate consideration” in connection with the transaction (the so-called “service provider” exemption).
There can be no assurance that any of these class or statutory exemptions will be available with respect to transactions involving
the notes.
Because we
may be considered a party in interest with respect to many Plans, the notes may not be purchased, held or disposed of by any Plan,
any entity whose underlying assets include “plan assets” by reason of any Plan’s investment in the entity (a
“Plan Asset Entity”) or any person investing “plan assets” of any Plan, unless such purchase, holding
or disposition is eligible for exemptive relief, including relief available under PTCEs 96-23, 95-60, 91-38, 90-1, 84-14 or the
service provider exemption or such purchase, holding or disposition is otherwise not prohibited. Any purchaser, including any
fiduciary purchasing on behalf of a Plan, transferee or holder of the notes will be deemed to have represented, in its corporate
and its fiduciary capacity, by its purchase and holding of the notes that either (a) it is not a Plan or a Plan Asset Entity and
is not purchasing such notes on behalf of or with “plan assets” of any Plan or with any assets of a governmental,
non-U.S. or church plan that is subject to any federal, state, local or non-U.S. law that is substantially similar to the provisions
of Section 406 of ERISA or Section 4975 of the Code (“Similar Law”) or (b) its purchase, holding and disposition of
these notes will not constitute or result in a non-exempt are not prohibited transaction under Section 406 of ERISA or Section
4975 of the Code or violate any Similar Law.
Due to the
complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it
is particularly important that fiduciaries or other persons considering purchasing the notes on behalf of or with “plan
assets” of any Plan consult with their counsel regarding the availability of exemptive relief.
Each purchaser
and holder of the notes has exclusive responsibility for ensuring that its purchase, holding and disposition of the notes do not
violate the prohibited transaction rules of ERISA or the Code or any Similar Law. The sale of any notes to any Plan or plan subject
to Similar Law is in no respect a representation by us or any of our affiliates or representatives that such an investment meets
all relevant legal requirements with respect to investments by plans generally or any particular plan, or that such an investment
is appropriate for plans generally or any particular plan. In this regard, neither this discussion nor anything provided in this
document is or is intended to be investment advice directed at any potential Plan purchaser or at Plan purchasers generally and
such purchasers of these notes should consult and rely on their own counsel and advisers as to whether an investment in these
notes is suitable.
However, individual retirement
accounts, individual retirement annuities and Keogh plans, as well as employee benefit plans that permit participants to direct
the investment of their accounts, will not be permitted to purchase or hold the notes if the account, plan or annuity is for the
benefit of an employee of Morgan Stanley or Morgan Stanley Wealth Management or a family member and the employee receives any
compensation (such as, for example, an addition to bonus) based on the purchase of the notes by the account, plan or annuity.
|
Additional
considerations:
|
Client accounts
over which Morgan Stanley, Morgan Stanley Wealth Management or any of their respective subsidiaries have investment discretion
are not permitted to purchase the notes, either directly or indirectly.
|
Supplemental
information regarding plan of distribution; conflicts of interest:
|
MS & Co. expects to
sell all of the notes that it purchases from us to an unaffiliated dealer at a price of $995 per note, for further sale
to certain fee-based advisory accounts at the price to public of $1,000 per note. MS & Co. will not receive a sales
commission with respect to the notes.
MS & Co. is an affiliate
of MSFL and a wholly owned subsidiary of Morgan Stanley, and it and other affiliates of ours expect to make a profit by
selling, structuring and, when applicable, hedging the notes.
MS & Co. will conduct
this offering in compliance with the requirements of FINRA Rule 5121 of the Financial Industry Regulatory Authority, Inc.,
which is commonly referred to as FINRA, regarding a
|
Morgan Stanley Finance LLC
Market-Linked Notes due August 5, 2024
Based on the Value of an Equally Weighted Basket Composed of the S&P 500
®
Index and the EURO STOXX 50
®
Index
|
FINRA member firm’s distribution of the securities of an affiliate
and related conflicts of interest. MS & Co. or any of our other affiliates may not make sales in this offering to any
discretionary account. See “Plan of Distribution (Conflicts of Interest)” and “Use of Proceeds and Hedging”
in the accompanying product supplement.
|
Validity
of the notes:
|
In the opinion
of Davis Polk & Wardwell LLP, as special counsel to MSFL and Morgan Stanley, when the notes offered by this pricing supplement
have been executed and issued by MSFL, authenticated by the trustee pursuant to the MSFL 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 MSFL and the related guarantee will be a valid and binding obligation 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 (i) the effect
of fraudulent conveyance, fraudulent transfer or similar provision of applicable law on the conclusions expressed above and
(ii) any provision of the MSFL Senior Debt Indenture that purports to avoid the effect of fraudulent conveyance, fraudulent
transfer or similar provision of applicable law by limiting the amount of Morgan Stanley’s obligation under the related
guarantee. This opinion is given as of the date hereof and is limited to the laws of the State of New York, the
General Corporation Law of the State of Delaware and the Delaware Limited Liability Company Act. In addition, this
opinion is subject to customary assumptions about the trustee’s authorization, execution and delivery of the MSFL Senior
Debt Indenture and its authentication of the notes and the validity, binding nature and enforceability of the MSFL Senior
Debt Indenture with respect to the trustee, all as stated in the letter of such counsel dated November 16, 2017, which is
Exhibit 5-a to the Registration Statement on Form S-3 filed by Morgan Stanley on November 16, 2017.
|
Where
you can find more information:
|
Morgan Stanley and MSFL
have filed a registration statement (including a prospectus, as supplemented by the product supplement for Equity-Linked
Notes and the index supplement) with the Securities and Exchange Commission, or SEC, for the offering to which this communication
relates. You should read the prospectus in that registration statement, the product supplement for Equity-Linked Notes,
the index supplement and any other documents relating to this offering that Morgan Stanley and MSFL have filed with the
SEC for more complete information about Morgan Stanley, MSFL and this offering. You may get these documents without cost
by visiting EDGAR on the SEC web site at
.
www.sec.gov. Alternatively, Morgan Stanley
or MSFL will arrange to send you the prospectus, the product supplement for Equity-Linked Notes and the index supplement
if you so request by calling toll-free 800-584-6837.
You may access these documents
on the SEC web site at
.
www.sec.gov as follows:
Product
Supplement for Equity-Linked Notes dated November 16, 2017
Index
Supplement dated November 16, 2017
Prospectus
dated November 16, 2017
Terms used but not defined
in this document are defined in the product supplement for Equity-Linked Notes, in the index supplement or in the prospectus.
|
Morgan Stanley Depository Shares Representing 1/1000TH Preferred Series 1 Fixed TO Floating Non (Cum) (NYSE:MSPI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Morgan Stanley Depository Shares Representing 1/1000TH Preferred Series 1 Fixed TO Floating Non (Cum) (NYSE:MSPI)
Historical Stock Chart
From Jul 2023 to Jul 2024