Equity-Linked Partial Principal at Risk Securities due June 1, 2027
Based on the Performance of the Worst Performing of the Dow Jones Industrial AverageSM, the Russell 2000® Index and the NASDAQ-100 Index®
Fully and Unconditionally Guaranteed by Morgan Stanley
Equity-Linked Partial Principal at Risk Securities, which we refer to as the securities, are unsecured obligations of Morgan Stanley Finance LLC (“MSFL”) and are fully and unconditionally guaranteed by Morgan Stanley. The securities will pay no interest, provide for a minimum payment amount of only 95% of principal at maturity and have the terms described in the accompanying product supplement, index supplement and prospectus, as supplemented and modified by this document. The payment at maturity on the securities will be based on the performance of the worst performing of the Dow Jones Industrial AverageSM, the Russell 2000® Index and the NASDAQ-100 Index®. At maturity, if the final index value of each of the underlying indices is greater than its respective initial index value, investors will receive the stated principal amount of their investment plus a supplemental redemption amount reflecting 125% of the appreciation of the worst performing underlying index from its initial index value to its final index value, subject to the maximum payment amount. The supplemental redemption amount will therefore be payable only if all three underlying indices have appreciated from their respective initial index values. However, if at maturity the final index value of any underlying index has depreciated in value, investors will lose 1% for every 1% decline in the worst performing underling index from its initial index value to its final index value, subject to the minimum payment amount. Investors may lose up to 5% of the stated principal amount of the securities. Because the payment at maturity is based on the worst performing of the underlying indices, a decline in any underlying index will result in a loss of up to 5% of your investment even if the other underlying indices have appreciated or have not declined as much. These long-dated securities are for investors who are concerned about principal risk, but seek an equity index-based return, and who are willing to risk 5% of their principal and to forgo current income and upside returns above the maximum payment amount in exchange for the repayment of at least 95% of the principal at maturity and the opportunity to earn a return reflecting 125% of the appreciation of the worst performing underlying index from its initial index value to its final index value, subject to the maximum payment amount. The securities are securities issued as part of MSFL’s Series A Global Medium-Term Notes program.
All payments on the securities, including the payment of the minimum payment amount at maturity, 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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Issue price:
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$1,000 per security (see “Commissions and issue price” below)
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Stated principal amount:
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$1,000 per security
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Aggregate principal amount:
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$
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Pricing date:
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May 26, 2022
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Original issue date:
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June 1, 2022 (3 business days after the pricing date)
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Maturity date:
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June 1, 2027
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Interest:
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None
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Underlying indices:
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The Dow Jones Industrial AverageSM (the “INDU Index”), the Russell 2000® Index (the “RTY Index”) and the NASDAQ-100 Index® (the “NDX Index”)
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Payment at maturity:
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If the final index value of each underlying index is greater than its respective initial index value:
$1,000 + supplemental redemption amount, subject to the maximum payment amount
If the final index value of any underlying index is less than or equal to its respective initial index value:
$1,000 × index performance factor of the worst performing underlying index, subject to the minimum payment amount
Under these circumstances, the payment at maturity will be less than the stated principal amount of $1,000 per security by an amount that is proportionate to the percentage decline of the worst performing underlying index. However, under no circumstances will the payment due at maturity be less than the minimum payment amount of $950 per security.
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Supplemental redemption amount:
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(i) $1,000 times (ii) the index percent change of the worst performing underlying index times (iii) the participation rate
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Worst performing underlying index:
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The underlying index with the lowest index percent change
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Maximum payment amount:
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At least $1,900 per security (190% of the stated principal amount). The actual maximum payment amount will be determined on the pricing date.
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Minimum payment amount:
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$950 per security (95% of the stated principal amount)
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Participation rate:
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125%
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Index percent change:
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With respect to each underlying index, (final index value – initial index value) / initial index value
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Index performance factor
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With respect to each underlying index, final index value / initial index value
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Initial index value:
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With respect to the INDU Index, , which is the index closing value of such index on the pricing date
With respect to the RTY Index, , which is the index closing value of such index on the pricing date
With respect to the NDX Index, , which is the index closing value of such index on the pricing date
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Final index value:
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With respect to each underlying index, the index closing value of such index on the determination date
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Determination date:
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May 26, 2027, subject to postponement for non-index business days and certain market disruption events
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CUSIP / ISIN:
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61774DGA9 / US61774DGA90
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Listing:
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The securities will not be listed on any securities exchange.
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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 $960.50 per security, or within $40.00 of that estimate. See “Investment Summary” beginning on page 2.
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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 19.
The securities involve risks not associated with an investment in ordinary debt securities. See “Risk Factors” beginning on page 8.
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. 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 Equity-Linked Partial Principal at Risk Securities dated November 16, 2020
Index Supplement dated November 16, 2020 Prospectus dated November 16, 2020