Morgan Stanley Launches 11% Yield Note with S&P Momentum Index Protection

Morgan Stanley Finance LLC has announced Contingent Income Memory Buffered Auto-Callable Securities linked to the S&P U.S. Equity Momentum 40% VT 4% Decrement Index (SPUMP40), due August 1, 2030.

Rhea-AI Filing Summary

Morgan Stanley Finance LLC has announced Contingent Income Memory Buffered Auto-Callable Securities linked to the S&P U.S. Equity Momentum 40% VT 4% Decrement Index (SPUMP40), due August 1, 2030. Key features include:

• Contingent Coupon Rate: 10.00% to 11.00% per annum with memory feature
• Auto-Call Feature: Monthly redemption after 1 year if index closes at or above 100% of initial level
• Downside Protection: 15% buffer (85% maximum loss)
• Coupon Barrier: 70% of initial level, paid monthly

The securities, priced at an estimated value of $894.70 per unit, offer conditional downside protection but limit upside participation. Notable risks include credit risk of Morgan Stanley, early redemption risk, and the underlier's limited operating history since March 2022. The 4% decrement feature of the index will impact performance regardless of market direction.

Positive

• Attractive contingent coupon rate of 10.00% to 11.00% per annum with memory feature
• 15% downside buffer protection limits potential losses
• Monthly automatic early redemption opportunity if underlier is at or above initial level
• Relatively low coupon barrier at 70% of initial level provides good likelihood of coupon payments

Negative

• Estimated value ($894.70) is significantly below the issue price ($1,000), indicating high embedded costs
• Capped upside potential limits participation in underlier appreciation
• Underlying index (SPUMP40) has very limited operating history (established March 2022), increasing uncertainty
• 4% annual decrement feature in the underlying index creates structural headwind for performance
• High leverage in the underlying index structure increases risk profile

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What is the maturity date and coupon rate for MS's SPUMP40 Contingent Income Memory Buffered Auto-Callable Securities?

The securities mature on August 1, 2030, with a contingent coupon rate of 10.00% to 11.00% per annum that includes a memory feature. The coupon is paid monthly, subject to the underlier's performance.

What is the automatic redemption trigger for MS's new structured note (CUSIP: 61778NAT8)?

The securities will be automatically redeemed if, on any monthly redemption determination date (beginning after 1 year), the closing level of the underlier is greater than or equal to 100% of the initial level (call threshold level). Once automatically redeemed, no further payments will be made.

What is the maximum loss potential for MS's SPUMP40 Buffered Auto-Callable Securities?

The securities have a buffer amount of 15%, meaning investors are protected against the first 15% of underlier decline. The maximum loss is 85% of the investment, and this occurs if the underlier declines 100%. All payments are subject to Morgan Stanley's credit risk.

What is the estimated value of MS's new structured note offering (July 2025)?

The estimated value is $894.70 per security, or within $44.70 of that estimate. This value is less than the original issue price due to factors including the lower rate and costs associated with issuing, selling, structuring, and hedging the securities.

What are the key risks of MS's SPUMP40 structured notes?

Key risks include: 1) Only minimum payment at maturity is guaranteed, 2) No regular interest payments, 3) Early redemption risk, 4) Credit risk of Morgan Stanley, 5) Limited secondary market trading, and 6) The underlier index is new (established March 14, 2022) with very limited operating history.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Accepted by SEC EDGAR 06/26/2025 - 10:38 AM EDT Learn about SEC filing dates

Free Writing Prospectus to Preliminary Pricing Supplement No. 9,049

Registration Statement Nos. 333-275587; 333-275587-01

Dated July 1, 2025; Filed pursuant to Rule 433

Morgan Stanley

SPUMP40 Contingent Income Memory Buffered Auto-Callable Securities due August 1, 2030

This document provides a summary of the terms of the securities. Investors must carefully review the accompanying preliminary pricing supplement referenced below, product supplement, index supplement and prospectus, and the “Risk Considerations” on the following page, prior to making an investment decision.

Terms
Issuer:	Morgan Stanley Finance LLC
Guarantor:	Morgan Stanley
Underlier:	S&P® U.S. Equity Momentum 40% VT 4% Decrement Index (SPUMP40)
Automatic early redemption:	If, on any redemption determination date, the closing level of the underlier is greater than or equal to the call threshold level, the securities will be automatically redeemed. No further payments will be made on the securities once they have been automatically redeemed.
Call threshold level:	100% of the initial level
Redemption determination dates:	Beginning after 1 year, monthly
Contingent coupon:	10.00% to 11.00% per annum, with a memory feature. See the accompanying preliminary pricing supplement.
Coupon payment dates:	Monthly
Coupon barrier level:	70% of the initial level
Buffer amount:	15% (85% maximum loss)1
Pricing date:	July 28, 2025
Final observation date:	July 29, 2030
Maturity date:	August 1, 2030
CUSIP:	61778NAT8
Estimated value:	$894.70 per security, or within $44.70 of that estimate
Preliminary pricing supplement:	https://www.sec.gov/Archives/edgar/data/895421/000183988225034715/ms9049_424b2-18913.htm
1All payments are subject to our credit risk

 

Hypothetical Payment at Maturity1 (if the securities have not been automatically redeemed)
% Change in Closing Level of the Underlier	Payment at Maturity per Security (excluding any contingent coupon payable at maturity)
+100.00%	$1,000.00
+80.00%	$1,000.00
+60.00%	$1,000.00
+40.00%	$1,000.00
+20.00%	$1,000.00
0.00%	$1,000.00
-10.00%	$1,000.00
-15.00%	$1,000.00
-16.00%	$990.00
-20.00%	$950.00
-40.00%	$750.00
-60.00%	$550.00
-80.00%	$350.00
-100.00%	$150.00

 

 

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.

Underlier(s)

For more information about the underlier(s), 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 pricing supplement. Please review those risk factors carefully prior to making an investment decision.

Risks Relating to an Investment in the Securities

●The securities provide for only the minimum payment at maturity.

●The securities do not provide for the regular payment of interest.

●Payment of the contingent coupon is based on the closing level of the underlier on only the related observation date at the end of the related interest period.

●Investors will not participate in any appreciation in the value of the underlier.

●The securities are subject to early redemption risk.

●The market price of the securities may be influenced by many unpredictable factors.

●The securities 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 securities.

●As a finance subsidiary, MSFL has no independent operations and will have no independent assets.

●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 securities in the original issue price reduce the economic terms of the securities, cause the estimated value of the securities to be less than the original issue price and will adversely affect secondary market prices.

●The estimated value of the securities 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 securities will not be listed on any securities exchange and secondary trading may be limited.

●As discussed in more detail in the accompanying product supplement, investing in the securities is not equivalent to investing in the underlier(s).

●The U.S. federal income tax consequences of an investment in the securities are uncertain.

Risks Relating to the Underlier(s)

●Because your return on the securities will depend upon the performance of the underlier, the securities are subject to the following risks, as discussed in more detail in the accompanying index supplement. The accompanying index supplement refers to the underlier as the “Index.”

oNo assurance can be given that the investment strategy used to construct the Index will achieve its intended results or that the Index will be successful or will outperform any alternative index or strategy that might reference the Index Components.

oThe decrement of 4% per annum will adversely affect the performance of the Index in all cases, whether the Index appreciates or depreciates.

oThe Index is subject to risks associated with the use of significant leverage.

oThe Index may not be fully invested.

oThe Index was established on March 14, 2022 and therefore has very limited operating history.

oAs the Index is new and has very limited historical performance, any investment in the Index may involve greater risk than an investment in an index with longer actual historical performance and a proven track record.

oHigher future prices of the futures contract to which the Index is linked relative to its current prices may adversely affect the value of the Index and the value of instruments linked to the Index.

oSuspensions or disruptions of market trading in futures markets could adversely affect the price of instruments linked to the Index.

oLegal and regulatory changes could adversely affect the return on and value of your securities.

oThe E-mini Russell 2000 futures contracts are one of the Index Components and are subject to risks associated with small-capitalization companies.

oAdjustments to the Index could adversely affect the value of instruments linked to the Index.

Risks Relating to Conflicts of Interest

●The calculation agent, which is a subsidiary of Morgan Stanley and an affiliate of MSFL, will make determinations with respect to the securities.

●Hedging and trading activity by our affiliates could potentially adversely affect the value of the securities.

Tax Considerations

You should review carefully the discussion in the accompanying preliminary pricing supplement under the caption “Additional Information About the Securities–United States federal income tax considerations” concerning the U.S. federal income tax consequences of an investment in the securities, and you should consult your tax adviser.