October
2024
Amendment
No. 1 dated September 30, 2024 relating to
Preliminary
Pricing Supplement No. 4,119
Registration
Statement Nos. 333-275587; 333-275587-01
Dated
September 26, 2024
Filed
pursuant to Rule 424(b)(2)
Morgan Stanley Finance LLC
Fixed Rate Callable Notes due 2030
Fully and Unconditionally
Guaranteed by Morgan Stanley
As further described below, we, Morgan
Stanley Finance LLC (“MSFL”), will redeem the notes in accordance with the risk neutral valuation model determination noted
herein. Any redemption payment will be 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. Subject to the call feature, interest will accrue and be
payable on the notes, in arrears, at the interest rate and frequency specified below.
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.
| SUMMARY TERMS |
| Issuer: |
Morgan Stanley Finance LLC |
|
| Guarantor: |
Morgan Stanley |
|
| Aggregate
principal amount: |
$
. May be increased prior to the original issue date but we are not required to do so. |
|
| Issue
price: |
$1,000 per note |
|
| Stated
principal amount: |
$1,000 per note |
|
| Pricing
date: |
October , 2024 |
|
| Original
issue date: |
October 21, 2024
( business days after the pricing date) |
|
| Maturity
date: |
October 21, 2030 |
|
| Interest
accrual date: |
October
21, 2024 |
|
| Payment
at maturity: |
The payment at maturity
per note will be the stated principal amount plus accrued and unpaid interest |
|
| Interest
rate: |
From
and including |
To
but excluding |
Interest
rate (per annum) |
| |
Original
issue date |
Maturity
date |
4.150% |
| Interest payment period: |
Semi-annual |
| Interest payment period end dates: |
Unadjusted |
| Interest payment dates: |
The 21st calendar day of each April
and October, beginning on the initial interest payment date; provided that if any such day is not a business day,
that interest payment will be made on the next succeeding business day and no adjustment will be made to any interest payment made
on that succeeding business day. |
| Initial interest payment date: |
April 21, 2025 |
| Day-count convention: |
30/360 (Bond Basis) |
| Call feature: |
An early redemption, in whole but not in part,
will occur on a redemption date if and only if the output of a risk neutral valuation model on the calendar day that is 13 calendar
months prior to such redemption date, subject to adjustment as described below (the “determination date”), taking as
input: (i) prevailing reference market levels, volatilities and correlations, as applicable and in each case as of the determination
date and (ii) Morgan Stanley’s credit spreads as of the pricing date(s), indicates that redeeming on such date is economically
rational for us as compared to not redeeming on such date. If any scheduled determination date falls on a day that is
not a business day, it will be postponed to the following business day. Any redemption payment will be 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. If we call the notes, we will give you notice at least 5 business days before the call date specified in
the notice. No further payments will be made on the redeemed notes once they have been redeemed. See “The
Notes.” |
| Redemption percentage at redemption date: |
100% per note redeemed |
| Frequency of redemption dates: |
Annual |
| Redemption date(s): |
The 21st calendar day of each October,
beginning on the initial redemption date |
| Initial redemption date: |
October 21, 2026 |
| Specified currency: |
U.S. dollars |
| No
listing: |
The notes will not be listed on any securities
exchange. |
| Denominations: |
$1,000 / $1,000 |
| CUSIP: |
61766YVG3 |
| ISIN: |
US61766YVG33 |
| Book-entry
or certificated note: |
Book-entry |
| Business
day: |
New York |
| Agent: |
Morgan Stanley & Co. LLC (“MS &
Co.”), an affiliate of MSFL and a wholly owned subsidiary of Morgan Stanley. See “Supplemental Information
Concerning Plan of Distribution; Conflicts of Interest.” |
| Calculation
agent: |
Morgan Stanley Capital Services LLC |
| Trustee: |
The Bank of New York Mellon |
| Estimated value on the pricing date: |
Approximately $977.40
per note, or within $27.40 of that estimate.
See “The Notes”
on page 2.
|
| Commissions
and issue price: |
Price
to public(1) |
Agent’s
commissions and fees(2) |
Proceeds
to us(3) |
| Per note |
$1,000 |
$ |
$ |
| Total |
$ |
$ |
$ |
| (1) | The price to public for investors
purchasing the notes in fee-based advisory accounts will be $ per
note. |
| (2) | Selected
dealers, including Morgan Stanley Wealth Management (an affiliate of the agent), and their
financial advisors will collectively receive from the agent, MS & Co., a fixed sales
commission of $ for each note they sell; provided that
dealers selling to investors purchasing the notes in fee-based advisory accounts will not
receive a sales commission with respect to such notes. See
“Supplemental Information Concerning 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 5. |
The notes involve risks not associated
with an investment in ordinary debt securities. See “Risk Factors” beginning on page 3.
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 and prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
You should read
this document together with the related prospectus supplement and prospectus,
each of which can be accessed via the hyperlinks below. When you read the accompanying prospectus supplement, please note
that all references in such supplement 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.
References to “we,” “us”
and “our” refer to Morgan Stanley or MSFL, or Morgan Stanley and MSFL collectively, as the context requires.
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.
Morgan Stanley Finance LLC |
Fixed Rate Callable Notes |
The Notes
The notes are debt securities of Morgan Stanley Finance LLC and are
fully and unconditionally guaranteed by Morgan Stanley.
An early redemption, in whole but not in part, will occur on a redemption
date if and only if the output of a risk neutral valuation model on the calendar day that is 13 calendar months prior to such redemption
date, based on the inputs indicated in the call feature terms, indicates that redeeming on such date is economically rational for us as
compared to not redeeming on such date. Any redemption payment will be 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. If we call the notes,
we will give you notice at least 5 business days before the call date specified in the notice. 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. We describe
the basic features of these notes in the sections of the accompanying prospectus called “Description of Debt Securities—Fixed
Rate Debt Securities” and prospectus supplement called “Description of Notes,” subject to and as modified by the provisions
described below. For information regarding notices of redemption, see “Description of Debt Securities—Redemption
and Repurchase of Debt Securities—Notice of Redemption” in the accompanying prospectus. All payments on the notes
are subject to our credit risk.
The stated principal amount and 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 will be less than the issue price. We estimate that the value of each note
on the pricing date will be approximately $977.40 or within $27.40 of that estimate. Our estimate of the value
of the notes as determined on the pricing date will be set forth in the final pricing supplement.
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 interest rates. The estimated value of
the notes is determined using our own pricing and valuation models, market inputs and assumptions relating to 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 interest
rate applicable to each interest payment period, 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 securities 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 interest rates, 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, the costs of unwinding the related hedging transactions
and other factors.
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 |
Fixed Rate Callable Notes |
Risk Factors
The notes involve risks not associated with an investment in ordinary
fixed rate notes. This section describes the material risks relating to the notes. For a complete list of risk factors,
please see the accompanying prospectus supplement and prospectus. Investors should consult their financial and legal advisers
as to the risks entailed by an investment in the notes and the suitability of the notes in light of their particular circumstances.
Risks Relating to an Investment in the Notes
| § | The notes have early redemption risk. Any early redemption, in whole but not in part, will occur on a redemption
date if and only if the output of a risk neutral valuation model on the calendar day that is 13 calendar months prior to such redemption
date, based on the inputs indicated in the call feature terms, indicates that redeeming on such date is economically rational for us as
compared to not redeeming on such date. In accordance with the risk neutral valuation model determination noted herein, it
is more likely that the issuer will redeem the notes prior to their stated maturity date to the extent that the interest payable on the
notes is greater than the interest that would be payable on other instruments of the issuer of a comparable maturity, of comparable terms
and of a comparable credit rating trading in the market. If the notes are redeemed prior to their stated maturity date, you
will receive no further interest payments on the redeemed notes and may have to re-invest the proceeds in a lower interest rate environment. |
| § | Investors 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. Investors are dependent on our ability to pay all amounts due on the notes on interest
payment dates, on any redemption date and at maturity and therefore investors are subject to our credit risk and to changes in the market’s
view of our creditworthiness. 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 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 price at which the notes may be sold prior to maturity will depend on a number of factors and may be substantially less than
the amount for which they were originally purchased. Some of these factors include, but are not limited to: (i) actual
or anticipated changes in interest and yield rates, (ii) any actual or anticipated changes in our credit ratings or credit spreads and
(iii) time remaining to maturity. Generally, the longer the time remaining to maturity and the more tailored the exposure,
the more the market price of the notes will be affected by the other factors described in the preceding sentence. This can
lead to significant adverse changes in the market price of securities like the notes. Depending on the actual or anticipated
level of interest and yield rates, the market value of the notes is expected to decrease and you may receive substantially less than 100%
of the issue price if you are able to sell your notes prior to maturity. |
| § | 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., are 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 |
Morgan Stanley Finance LLC |
Fixed Rate Callable Notes |
any dealer would charge in a secondary
market transaction of this type, the costs of unwinding the related hedging transactions 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.
| § | 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 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 pricing supplement will vary based on many factors that cannot be predicted with accuracy, including our creditworthiness
and changes in market conditions. |
| § | 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. Moreover,
in accordance with the risk neutral valuation model determination noted herein, it is less likely that the issuer will redeem the notes
prior to their stated maturity date to the extent that the interest payable on the notes is less than the interest that would be payable
on other instruments of the issuer of a comparable maturity trading in the market. Accordingly, you should be willing to hold
your notes to maturity. |
| § | Morgan Stanley & Co. LLC, which is a subsidiary of Morgan Stanley and an affiliate of MSFL, has determined the estimated value
on the pricing date. MS & Co. has determined the estimated value of the notes on the pricing date. |
| § | Our affiliates may publish research that could affect the market value of the notes. They also expect to hedge the issuer’s
obligations under the notes. One or more of our affiliates may, at present or in the future, publish research reports with
respect to movements in interest rates generally. This research is modified from time to time without notice to you and may
express opinions or provide recommendations that are inconsistent with purchasing or holding the notes. Any
of these activities may affect the market value of the notes. In addition, our affiliates expect to hedge the issuer’s
obligations under the notes and they may realize a profit from that expected hedging activity even if investors do not receive a favorable
investment return under the terms of the notes or in any secondary market transaction. |
| § | The calculation agent, which is a subsidiary of Morgan Stanley and an affiliate of MSFL, will make determinations with respect
to the notes. Any of these determinations made by the calculation agent may adversely affect the payout to investors. Moreover,
certain determinations made by the calculation agent may require it to exercise discretion and make subjective judgments. These
potentially subjective determinations may adversely affect the payout to you on the notes. For further information regarding
these types of determinations, see “Description of Debt Securities—Fixed Rate Debt Securities” and related definitions
in the accompanying prospectus. |
Morgan Stanley Finance LLC |
Fixed Rate Callable 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 2 above comprise the Agent’s commissions and the cost of issuing, structuring
and hedging the notes.
Supplemental Information Concerning Plan of Distribution;
Conflicts of Interest
The agent may distribute the notes through Morgan Stanley Smith Barney
LLC (“Morgan Stanley Wealth Management”), as selected dealer, or other dealers, which may include Morgan Stanley & Co.
International plc (“MSIP”) and Bank Morgan Stanley AG. Morgan Stanley Wealth Management, MSIP and Bank Morgan Stanley
AG are affiliates of ours. Selected dealers, including Morgan Stanley Wealth Management, and their financial advisors will
collectively receive from the agent, Morgan Stanley & Co. LLC, a fixed sales commission of $ for
each note they sell; provided that dealers selling to investors purchasing the notes in fee-based advisory accounts will not receive
a sales commission with respect to such 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. When MS & Co. prices this offering of notes, it will determine the economic terms of the notes such that for each
note the estimated value on the pricing date will be no lower than the minimum level described in “The Notes” on page 2.
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 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.
Acceleration Amount in Case of an Event of Default
In case an event of default with respect to the notes
shall have occurred and be continuing, the amount declared due and payable per note upon any acceleration of the notes shall be an amount
in cash equal to the stated principal amount plus accrued and unpaid interest.
Where You Can Find More Information
MSFL and Morgan Stanley have filed a registration
statement (including a prospectus, as supplemented by a prospectus supplement) with the Securities and Exchange Commission, or SEC, for
the offering to which this pricing supplement relates. You should read the prospectus in that registration statement, the prospectus
supplement and any other documents relating to this offering that MSFL and Morgan Stanley have filed with the SEC for more complete information
about MSFL, Morgan Stanley and this offering. When you read the accompanying prospectus supplement, please note that all references
in such supplement 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. You may get these documents without
cost by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, MSFL, Morgan Stanley, any underwriter or any dealer
participating in the offering will arrange to send you the prospectus and the prospectus supplement if you so request by calling toll-free
1-(800)-584-6837.
You may access these documents on the SEC web site
at www.sec.gov as follows:
Prospectus Supplement dated November 16, 2023
Prospectus dated April 12, 2024
Terms used but not defined in this pricing supplement
are defined in the prospectus supplement or in the prospectus.
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