Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp)
30 Junho 2022 - 07:02AM
Edgar (US Regulatory)
Free Writing Prospectus to
Preliminary Pricing Supplement No. 5,602
Registration Statement Nos.
333-250103; 333-250103-01
Dated July 1, 2022; Filed
pursuant to Rule 433
Morgan
Stanley
5-Year
Market-Linked Notes Linked to the Morgan Stanley MAP Trend
Index
This document provides a
summary of the terms of the notes. Investors must carefully review
the accompanying preliminary pricing supplement referenced below,
product supplement and prospectus, and the “Risk Considerations” on
the following page, prior to making an investment
decision.
1All payments are subject to our credit
risk
Hypothetical Payout at
Maturity1
|
|
|
Change in
Underlying
|
Return on
Notes
|
|
+40.00%
|
180.00%
|
|
+30.00%
|
135.00%
|
|
+20.00%
|
90.00%
|
|
+15.00%
|
67.50%
|
|
+10.00%
|
45.00%
|
|
+5.00%
|
22.50%
|
|
0.00%
|
0.00%
|
|
-5.00%
|
0.00%
|
|
-10.00%
|
0.00%
|
|
-15.00%
|
0.00%
|
|
-20.00%
|
0.00%
|
|
-30.00%
|
0.00%
|
|
-40.00%
|
0.00%
|
|
1The graph and table assume a participation
rate of 450.00%
|
The issuer has filed a registration
statement (including a prospectus) with the SEC for the offering to
which this communication relates. Before you invest, you should
read the prospectus in that registration statement and other
documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these
documents for free by visiting EDGAR on the SEC Web site
at
www.sec.gov. Alternatively, the issuer, any
underwriter or any dealer participating in the offering will
arrange to send you the prospectus if you request it by calling
toll-free 1-800-584-6837.
Underlying
Index
For more information about the underlying
index, including historical performance information, see the
accompanying preliminary pricing supplement.
Risk
Considerations
The
risks set forth below are discussed in more detail in the “Risk
Factors” section in the accompanying preliminary terms. Please
review those risk factors carefully prior to making an investment
decision.
Risks Relating to an Investment in the Notes
|
· |
The notes do not pay interest and may not pay more than the stated
principal amount at maturity. |
|
· |
The market price of the notes will be influenced by many
unpredictable factors. |
|
· |
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. |
|
· |
As a finance subsidiary, MSFL has no independent operations and
will have no independent assets. |
|
· |
The estimated value of the notes is approximately $959.40 per note,
or within $55.00 of that estimate, and 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. |
|
· |
The amount payable on the notes is not linked to the value of the
underlying index at any time other than the determination
date. |
|
· |
MS & Co., which is a subsidiary of Morgan Stanley and an
affiliate of MSFL, is both the calculation agent and the underlying
index publisher, and will make determinations with respect to the
notes and the underlying index. |
|
· |
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. |
|
· |
Investing in the notes is not equivalent to investing in the
underlying index. |
|
· |
The notes will not be listed on any securities exchange and
secondary trading may be limited. Accordingly, you should be
willing to hold your notes for the entire 5-year term of the
notes. |
|
· |
Hedging and trading activity by our affiliates could potentially
adversely affect the value of the notes. |
Risks Relating to the
Underlying Index
|
· |
There are risks associated with the underlying index. |
|
· |
The level of the underlying index can go down as well as
up. |
|
· |
The base allocation of ETFs in the Asset Portfolio is determined
in reference to each ETF’s Risk Budget and
volatility. |
|
· |
There are risks associated with the underlying index’s momentum
investment strategy. |
|
· |
Low volatility in the underlying index is not synonymous with
low risk in an investment linked to the underlying
index. |
|
· |
While the underlying index has a Volatility Target of 5%, there
can be no guarantee, even if the Asset Portfolio is rebalanced
daily, that the realized volatility of the underlying index will
not be less than or greater than 5%. |
|
· |
There can be no assurance that the actual volatility of the
underlying index will be lower than the volatility of any or all of
the Index Components. |
|
· |
The volatility target feature of the underlying index may dampen
its performance in bullish markets. |
|
· |
The value of the underlying index and any instrument linked to
the underlying index may increase or decrease due to a number of
factors, many of which are beyond our control. |
|
· |
The future performance of the underlying index may bear little
or no relation to the historical or hypothetical retrospective
performance of the underlying index. |
|
· |
The underlying index is particularly susceptible to “choppy”
markets. |
|
· |
The underlying index has fixed weighting
constraints. |
|
· |
The underlying index was established on March 7, 2017 and
therefore has a very limited history. |
|
· |
As the underlying index is new and has very limited actual
historical performance, any investment in the underlying index may
involve greater risk than an investment in an index with longer
actual historical performance and a proven track
record. |
|
· |
The underlying index is reduced by an excess return
cost. |
|
· |
The underlying index contains embedded costs. |
|
· |
An investment in the notes involves risks associated with
emerging markets equities and bonds, currency exchange rates and
commodities. |
|
· |
Changes in the value of the Index Components may offset each
other. |
|
· |
The Morgan Stanley Two Year Treasury Index can produce negative
returns, which may have an adverse effect on the level of the
respective Sub-Indices, and consequently, the level of the
index. |
|
· |
Adjustments to the underlying index could adversely affect the
value of instruments linked to the underlying
index. |
|
· |
Investing in the notes is not equivalent to investing in the
underlying index. Investing in the notes is not equivalent to
investing in the underlying index or its component ETFs or the
Morgan Stanley Two Year Treasury Index. |
|
· |
Reliance on information. Morgan Stanley has relied on
publicly available sources and not independently verified the
information extracted from these sources. |
|
· |
Research. Morgan Stanley will be under no obligation to make any
adjustments to the index or to reflect any change in outlook by
Morgan Stanley Research. |
|
· |
If the underlying index is discontinued and no successor index is
available, at maturity, Morgan Stanley will pay an alternative
supplemental redemption amount, if any, in lieu of the supplemental
redemption amount. |
|
· |
Adjustments to the
underlying index could adversely affect the value of the
notes. |
Tax Considerations
You should review carefully the discussion in the accompanying
preliminary pricing supplement under the caption “Additional
Information About the Notes –Tax considerations” concerning the
U.S. federal income tax consequences of an
investment in the notes, and you should consult your tax
adviser.
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