Dual Directional Buffered PLUS Based on the Value of the Worst Performing of the Dow Jones Industrial AverageSM and the Russell 2000® Index due April 3, 2025
Buffered Performance Leveraged Upside SecuritiesSM
Fully and Unconditionally Guaranteed by Morgan Stanley
Principal at Risk Securities
The Dual Directional Buffered PLUS, or “Buffered PLUS,” are unsecured obligations of Morgan Stanley Finance LLC (“MSFL”) and are fully and unconditionally guaranteed by Morgan Stanley. The Buffered PLUS will pay no interest, provide a minimum payment at maturity of only 10% of the stated principal amount and have the terms described in the accompanying product supplement for PLUS, index supplement and prospectus, as supplemented or modified by this document. The payment at maturity on the Buffered PLUS will be based on the value of the worst performing of the Dow Jones Industrial AverageSM and the Russell 2000® Index. At maturity, if the final index value of each underlying index is greater than its respective initial index value, investors will receive the stated principal amount of their investment plus leveraged upside performance of the worst performing underlying index. If the final index value of either underlying index is less than or equal to its respective initial index value, but the final index value of each underlying index is greater than or equal to 90% of its respective initial index value, meaning that neither underlying index has decreased from its initial index value by an amount greater than the buffer amount of 10%, investors will receive the stated principal amount of their investment plus an unleveraged positive return based on the absolute value of the performance of the worst performing underlying index, which will be inherently limited to a maximum return of 10%. However, if the final index value of either underlying index is less than 90% of its respective initial index value, meaning that either underlying index has decreased from its respective initial index value by an amount greater than the buffer amount of 10%, the absolute return feature will no longer be available and instead investors will lose 1% for every 1% decline in the worst performing underlying index beyond the specified buffer amount, subject to the minimum payment at maturity of 10% of the stated principal amount. Investors may lose up to 90% of the stated principal amount of the Buffered PLUS. Because the payment at maturity of the Buffered PLUS is based on the worst performing of the underlying indices, a decline in either underlying index beyond the buffer amount will result in a loss, and potentially a significant loss, of your investment even if the other underlying index has appreciated or has not declined as much. The Buffered PLUS are for investors who seek an equity index-based return and who are willing to risk their principal, risk exposure to the worst performing of two underlying indices and forgo current income in exchange for the leverage, buffer and absolute return features that in each case apply to a limited range of performance of the worst performing underlying index. The Buffered PLUS are notes issued as part of MSFL’s Series A Global Medium-Term Notes program.
The Buffered PLUS differ from the PLUS described in the accompanying product supplement for PLUS in that the Buffered PLUS offer the potential for a positive return at maturity if the worst performing underlying index depreciates by no more than 10%.
All payments are subject to our credit risk. If we default on our obligations, you could lose some or all of your investment. These Buffered PLUS 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 |
Issuer: | Morgan Stanley Finance LLC |
Guarantor: | Morgan Stanley |
Maturity date: | April 3, 2025 |
Underlying indices: | Dow Jones Industrial AverageSM (the “INDU Index”) and the Russell 2000® Index (the “RTY Index”) |
Aggregate principal amount: | $ |
Payment at maturity: | If the final index value of each underlying index is greater than its respective initial index value, |
| $1,000 + ($1,000 × leverage factor × index percent change of the worst performing underlying index) |
| If the final index value of either underlying index is less than or equal to its respective initial index value but the final index value of each underlying index is greater than or equal to 90% of its respective initial index value, meaning that neither underlying index has decreased from its initial index value by an amount greater than the buffer amount of 10%, |
| $1,000 + ($1,000 × absolute index return of the worst performing underlying index) |
| If the final index value of either underlying index is less than 90% of its respective initial index value, meaning that either underlying index has decreased from its respective initial index value by an amount greater than the buffer amount of 10%, |
| ($1,000 × index performance factor of the worst performing underlying index) + $100 |
| Under these circumstances, the payment at maturity will be less than the stated principal amount of $1,000. However, under no circumstances will the Buffered PLUS pay less than $100 per Buffered PLUS at maturity. |
Index percent change: | With respect to each underlying index, (final index value – initial index value) / initial index value |
Worst performing underlying index: | The underlying index with the lesser index percentage change |
Index performance factor: | With respect to each underlying index, final index value / initial index value |
Absolute index return: | The absolute value of the index percent change. For example, a -5% index percent change of the worst performing underlying index will result in a +5% absolute index return. |
Initial index value: | 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 |
Final index value: | With respect to each underlying index, the index closing value of such index on the valuation date |
Valuation date: | March 31, 2025, subject to adjustment for non-index business days and certain market disruption events |
Minimum payment at maturity: | $100 per Buffered PLUS (10% of the stated principal amount) |
Leverage factor: | 110% to 120%. The actual leverage factor will be determined on the pricing date. |
Buffer amount: | 10% |
Stated principal amount: | $1,000 per Buffered PLUS |
Issue price: | $1,000 per Buffered PLUS |
Pricing date: | June 30, 2023 |
Original issue date: | July 6, 2023 (3 business days after the pricing date) |
CUSIP / ISIN: | 61774XU50 / US61774XU501 |
Listing: | The Buffered PLUS will not be listed on any securities exchange. |
Agent: | Morgan Stanley & Co. LLC (“MS & Co.”), a wholly owned subsidiary of Morgan Stanley and an affiliate of MSFL. See “Supplemental information regarding plan of distribution; conflicts of interest.” |
Estimated value on the pricing date: | Approximately $960.80 per Buffered PLUS, or within $35.00 of that estimate. See “Investment Summary” on page 2. |
Commissions and issue price: | Price to public(1) | Agent’s commissions and fees(2) | Proceeds to us(3) |
Per Buffered PLUS | $1,000 | $ | $ |
Total | $ | $ | $ |
(1)The Buffered PLUS will be sold only to investors purchasing the Buffered PLUS in fee-based advisory accounts.
(2)MS & Co. expects to sell all of the Buffered PLUS that it purchases from us to an unaffiliated dealer at a price of $ per Buffered PLUS, for further sale to certain fee-based advisory accounts at the price to public of $1,000 per Buffered PLUS. MS & Co. will not receive a sales commission with respect to the Buffered PLUS. 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 PLUS.
(3)See “Use of proceeds and hedging” on page 18.
The Buffered PLUS 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 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 Buffered PLUS 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 Buffered PLUS” and “Additional Information About the Buffered PLUS” 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 PLUS dated November 16, 2020 Index Supplement dated November 16, 2020
Prospectus dated November 16, 2020