Lookback Entry Buffered Participation Securities Based on the Value of the S&P 500® Index due May 21, 2027
Fully and Unconditionally Guaranteed by Morgan Stanley
Principal at Risk Securities
The Lookback Entry Buffered Participation 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 a minimum payment at maturity of only 5% of the stated principal amount and have the terms described in the accompanying product supplement for participation securities, index supplement and prospectus, as supplemented or modified by this document. The payment at maturity on the securities is based on whether the final index value is greater than, equal to or less than the initial index value, which will be the lowest index closing value during the initial observation period. At maturity, if the underlying index has appreciated in value from the initial index value determined during the initial observation period, investors will receive the stated principal amount of their investment plus a return reflecting 100% of the upside performance of the underlying index. If the underlying index has depreciated in value, but the underlying index has not declined by more than the specified buffer amount, the securities will redeem for par. However, if the underlying index has depreciated in value by more than the buffer amount, investors will lose 1% for every 1% decline beyond the specified buffer amount, subject to the minimum payment at maturity of 5% of the stated principal amount. These long-dated securities are for investors who seek an equity index-based return and who are willing to risk their principal and forgo current income in exchange for the lookback feature used in determining the initial index value and the buffer feature that applies to a limited range of performance of the underlying index. Investors may lose up to 95% of the stated principal amount of the securities. The securities are notes issued as part of MSFL’s Series A Global Medium-Term Notes program.
All payments on the securities 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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FINAL 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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Maturity date:
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May 21, 2027
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Underlying index:
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S&P 500® Index
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Aggregate principal amount:
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$7,500,000
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Payment at maturity:
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If the final index value is greater than the initial index value:
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$10 + upside payment
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If the final index value is less than or equal to the initial index value but has decreased from the initial index value by an amount less than or equal to the buffer amount of 5%:
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$10
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If the final index value is less than the initial index value and has decreased from the initial index value by an amount greater than the buffer amount of 5%:
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($10 × index performance factor) + $0.50
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Under these circumstances, the payment at maturity will be less than the stated principal amount of $10. However, under no circumstances will the securities pay less than $0.50 per security at maturity.
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Upside payment:
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$10 × participation rate × index percent increase
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Index percent increase:
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(final index value – initial index value) / initial index value
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Initial index value:
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3,900.79, which was the index closing value on May 19, 2022 and represents the lowest index closing value during the initial observation period.
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Initial observation period:
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Each index business day on which there is no market disruption event with respect to the underlying index during the approximately 3-week period from and including the pricing date to and including June 8, 2022.
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Final index value:
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The index closing value on the valuation date
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Valuation date:
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May 18, 2027, subject to adjustment for non-index business days and certain market disruption events
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Buffer amount:
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5%
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Minimum payment at maturity:
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$0.50 per security (5% of the stated principal amount)
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Participation rate:
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100%
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Index performance factor:
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final index value / initial index value
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Stated principal amount:
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$10 per security
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Issue price:
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$10 per security (see “Commissions and issue price” below)
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Pricing date:
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May 18, 2022
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Original issue date:
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May 23, 2022 (3 business days after the pricing date)
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CUSIP / ISIN:
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61773Y839 / US61773Y8396
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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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$9.418 per security. See “Investment Summary” beginning on page 2.
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Commissions and issue price:
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Price to public
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Agent’s commissions and fees
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Proceeds to us(3)
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Per security
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$10
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$0.30(1)
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$0.05(2)
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$9.65
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Total
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$7,500,000
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$262,500
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$7,237,500
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(1) 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 $0.30 for each security they sell. 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 participation securities.
(2) Reflects a structuring fee payable to Morgan Stanley Wealth Management by the agent or its affiliates of $0.05 for each security.
(3) See “Use of proceeds and hedging” on page 14.
The securities involve risks not associated with an investment in ordinary debt securities. See “Risk Factors” beginning on page 6.
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 Participation Securities dated November 16, 2020 Index Supplement dated November 16, 2020
Prospectus dated November 16, 2020