Fixed Income Buffered Auto-Callable Securities due December 22, 2025
All Payments on the Securities Based on the Worst Performing of the Nasdaq-100 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 product supplement, index supplement and prospectus, as supplemented or modified by this document. The securities do not guarantee the repayment of any principal. The securities offer the opportunity for investors to earn a fixed semi-annual coupon at an annual rate of 7.65%. In addition, the securities will be automatically redeemed if the index closing value of each of the Nasdaq-100 Index® and the Russell 2000® Index is greater than or equal to its respective initial index value on any semi-annual redemption determination date for the early redemption payment equal to the sum of the stated principal amount plus the related semi-annual coupon. At maturity, if the securities have not previously been redeemed and the final index value of each underlying index is greater than or equal to 75% of the respective initial index value, meaning that neither underlying index has declined by an amount greater than the buffer amount of 25%, the payment at maturity will be the stated principal amount and the related semi-annual coupon. If, however, the final index value of either underlying index is less than its respective initial index value by an amount greater than the specified buffer amount, investors will lose 1.3333% of the principal amount for every 1% decline in the final index value of the worst performing underlying index from its initial index value beyond the buffer amount of 25%. Under these circumstances, the payment at maturity will be less, and possibly significantly less, than the stated principal amount of the securities and could be zero. There is no minimum payment at maturity on the securities. Accordingly, investors in the securities may lose their entire initial investment in the securities. Because payments on the securities are based on the worst performing of the underlying indices, a decline beyond the buffer amount of either of the underlying indices will result in a loss of your investment, even if the other underlying index has appreciated or has not declined as much. Investors will not participate in any appreciation of the underlying indices. The securities are for investors who are willing to risk their principal based on the worst performing of two underlying indices and who are willing to forgo the opportunity to participate in any appreciation of the underlying indices in exchange for the limited protection against loss, the opportunity to earn interest at a potentially above-market rate and the possibility of an automatic early redemption prior to maturity. 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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Nasdaq-100 Index® (the “NDX 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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June 20, 2024
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Original issue date:
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June 25, 2024 (3 business days after the pricing date)
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Maturity date:
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December 22, 2025
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Early redemption:
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If, on any redemption determination date, beginning on December 17, 2024, the index closing value of each underlying index is greater than or equal to its respective initial index value, the securities will be automatically redeemed for an early redemption payment on the related early redemption date. No further payments will be made on the securities once they have been redeemed.
The securities will not be redeemed early on any early redemption date if the index closing value of either underlying index is below the respective initial index value for such underlying index on the related redemption determination date.
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Early redemption payment:
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The early redemption payment will be an amount equal to (i) the stated principal amount for each security you hold plus (ii) the semi-annual coupon for the related interest period.
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Semi-annual coupon:
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Unless the securities have been previously redeemed, a fixed coupon at an annual rate of 7.65% (corresponding to approximately $38.25 per semi-annual period per security) will be paid on each coupon payment date.
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Payment at maturity:
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If the securities have not been automatically redeemed prior to maturity, the payment at maturity will be determined as follows:
If the final index value of each underlying index is greater than or equal to 75% of its respective initial index value, meaning that the final index value of neither underlying index has decreased by an amount greater than the buffer amount of 25% from its respective initial index value, investors will receive the stated principal amount plus the semi-annual coupon for the final interest period.
If the final index value of either underlying index is less than 75% of its respective initial index value, meaning that the final index value of either of the underlying indices has decreased by an amount greater than the buffer amount of 25% from its respective initial index value, investors will receive (i) the semi-annual coupon for the final interest period plus (ii) an amount calculated as follows:
$1,000 + [$1,000 × (index percent change of the worst performing underlying index + 25%) × downside factor]
Under these circumstances, the payment at maturity will be less, and possibly significantly less, than the stated principal amount of the securities and could be zero.
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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 $993.80 per security, or within $25.00 of that estimate. See “Investment Summary” 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 product supplement.
(3)See “Use of proceeds and hedging” on page 27.
The securities involve risks not associated with an investment in ordinary debt securities. See “Risk Factors” beginning on page 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 product 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 product supplement, index supplement and prospectus, each of which can be accessed via the hyperlinks below. When you read the accompanying product supplement and index supplement, please note that all references in such supplements to the prospectus dated November 16, 2023, or to any sections therein, should refer instead to the accompanying prospectus dated April 12, 2024 or to the corresponding sections of such prospectus, as applicable. Please also see “Additional Terms of the Securities” and “Additional Information About the Securities” at the end of this document.
As used in this document, “we,” “us” and “our” refer to Morgan Stanley or MSFL, or Morgan Stanley and MSFL collectively, as the context requires.
Product Supplement for Auto-Callable Securities dated November 16, 2023 Index Supplement dated November 16, 2023 Prospectus dated April 12, 2024