Jump Securities with Auto-Callable Feature due December 23, 2027, with 1-Year Initial Non-Call Period Based on the Performance of the S&P 500® 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 do not guarantee the repayment of principal, do not provide for the regular payment of interest and have the terms described in the accompanying product supplement, index supplement and prospectus, as supplemented or modified by this document. Beginning after one year, the securities will be automatically redeemed if the index closing value on any of the semi-annual determination dates is greater than or equal to the initial index value, for an early redemption payment that will increase over the term of the securities and that will correspond to a return of at least 12.50% per annum (to be determined on the pricing date), as described below. No further payments will be made on the securities once they have been redeemed. At maturity, if the securities have not previously been redeemed and the final index value is greater than or equal to the initial index value, investors will receive a fixed positive return that will also correspond to a return of at least 12.50% per annum (to be determined on the pricing date), as set forth below. If the securities are not automatically redeemed prior to maturity and the final index value is less than the initial index value but greater than or equal to 70% of the initial index value, which we refer to as the downside threshold level, investors will receive the stated principal amount of their investment. However, if the securities are not automatically redeemed prior to maturity and the final index value is less than the downside threshold level, investors will be exposed to the decline in the underlying index on a 1-to-1 basis and will receive a payment at maturity that is less than 70% of the stated principal amount of the securities and could be zero. Accordingly, investors in the securities must be willing to accept the risk of losing their entire initial investment. These long-dated securities are for investors who are willing to risk their principal and forego current income and participation in the appreciation of the underlying index in exchange for the possibility of receiving an early redemption payment or payment at maturity greater than the stated principal amount if the underlying index closes at or above the initial index value on a semi-annual determination date or the final determination date, respectively, and the limited protection against loss that applies only if the final index value is greater than or equal to the downside threshold level. Investors will not participate in any appreciation of the S&P 500® Index. 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 index:
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S&P 500® Index (the “SPX 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
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Pricing date:
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December 19, 2022
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Original issue date:
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December 22, 2022 (3 business days after the pricing date)
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Maturity date:
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December 23, 2027
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Early redemption:
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The securities are not subject to automatic early redemption until approximately one year after the original issue date. Following this initial 1-year non-call period, if, on any of the first eight semi-annual determination dates, the index closing value of the underlying index is greater than or equal to the initial index value, the securities will be automatically redeemed for the applicable early redemption payment on the related early redemption date.
The securities will not be redeemed early on any early redemption date if the index closing value of the underlying index is below the initial index value on the related determination date.
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Early redemption payment (Beginning after one year):
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The early redemption payment will be an amount in cash per stated principal amount (corresponding to a return of at least 12.50% per annum, to be determined on the pricing date) for each semi-annual determination date, as follows:
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1st determination date: at least $1,125.00
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5th determination date: at least $1,375.00
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2nd determination date: at least $1,187.50
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6th determination date: at least $1,437.50
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3rd determination date: at least $1,250.00
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7th determination date: at least $1,500.00
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4th determination date: at least $1,312.50
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8th determination date: at least $1,562.50
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No further payments will be made on the securities once they have been redeemed.
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Determination dates (Beginning after one year):
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1st determination date: December 20, 2023
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6th determination date: June 22, 2026
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2nd determination date: June 20, 2024
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7th determination date: December 21, 2026
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3rd determination date: December 19, 2024
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8th determination date: June 21, 2027
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4th determination date: June 20, 2025
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Final determination date: December 20, 2027
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5th determination date: December 19, 2025
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The determination dates are subject to postponement for non-index business days and certain market disruption events.
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Early redemption dates:
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The third business day after the relevant determination date
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Initial index value:
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, which is the index closing value on the pricing date
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Final index value:
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The index closing value on the final determination date
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Payment at maturity:
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If the securities have not previously been redeemed, you will receive at maturity a cash payment per security as follows:
●If the final index value is greater than or equal to the initial index value:
At least $1,625.00 (to be determined on the pricing date)
●If the final index value is less than the initial index value but is greater than or equal to the downside threshold level:
$1,000
●If the final index value is less than the downside threshold level:
$1,000 × index performance factor
Under these circumstances, you will lose at least 30%, and possibly all, of your investment.
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Downside threshold level:
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, which is equal to 70% of the initial index value
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Index performance factor:
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Final index value divided by the initial index value
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CUSIP:
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61774TBP6
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ISIN:
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US61774TBP66
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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 $978.60 per security, or within $55.00 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 for auto-callable securities.
(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 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. 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, 2020 Index Supplement dated November 16, 2020
Prospectus dated November 16, 2020