New Morgan Stanley Notes Offer 126% Leverage on Dow Jones and Nasdaq-100 Performance
Rhea-AI Filing Summary
Morgan Stanley Finance has announced Worst-of INDU and NDX Dual Directional Trigger PLUS notes due August 3, 2028. These structured notes offer unique investment characteristics:
- Linked to performance of Dow Jones Industrial Average and Nasdaq-100 Index
- Features a leverage factor of 126% to 141% for positive returns
- 50% participation rate in absolute negative returns above threshold
- Downside protection threshold at 70% of initial level
- Estimated value of $961.10 per security
Key risks include: no principal guarantee or interest payments, exposure to worst-performing underlier, limited secondary market trading, and Morgan Stanley credit risk. Payment at maturity examples show potential returns ranging from total loss to 75.6% gain based on worst-performing underlier. The notes offer sophisticated investors exposure to two major indices with built-in leverage and partial downside protection.
Positive
- Offers leveraged upside potential with 126% to 141% participation in positive returns
- Provides downside protection up to 30% loss (threshold level at 70%)
- Features unique dual directional structure offering positive returns even in moderately negative market scenarios (-30% to 0%)
- Backed by Morgan Stanley's credit guarantee
Negative
- No principal protection - potential for complete loss of investment if worst-performing index falls more than 30%
- Return is capped and based only on worst-performing index between INDU and NDX
- Estimated value ($961.10) is significantly below the issue price, indicating high embedded costs
- Limited secondary market liquidity due to no exchange listing
- Complex structure with credit risk exposure to Morgan Stanley
Free Writing Prospectus to Preliminary Pricing Supplement No. 9,028
Registration Statement Nos. 333-275587; 333-275587-01
Dated July 1, 2025; Filed pursuant to Rule 433
Morgan Stanley
Worst-of INDU and NDX Dual Directional Trigger PLUS due August 3, 2028
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.
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Terms |
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Issuer: |
Morgan Stanley Finance LLC |
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Guarantor: |
Morgan Stanley |
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Underliers: |
Dow Jones Industrial AverageSM (INDU) and Nasdaq-100 Index® (NDX) |
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Leverage factor: |
126% to 141% |
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Absolute return participation rate: |
50% |
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Downside threshold level: |
70% of the initial level for each underlier |
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Pricing date: |
July 31, 2025 |
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Observation date: |
July 31, 2028 |
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Maturity date: |
August 3, 2028 |
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CUSIP: |
61778K7K7 |
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Estimated value: |
$961.10 per security, or within $45.00 of that estimate |
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Preliminary pricing supplement: |
https://www.sec.gov/Archives/edgar/data/895421/000183988225034306/ms9028_424b2-18594.htm |
1All payments are subject to our credit risk
Hypothetical Payment at Maturity1
The payment at maturity will be based solely on the performance of the worst performing underlier, which could be either underlier. The payoff diagram and table below illustrate the payment at maturity for a range of hypothetical performances of the worst performing underlier over the term of the securities.
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% Change in Closing Level of the Worst Performing Underlier |
Payment at Maturity per Security |
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60.00% |
$1,756.00* |
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40.00% |
$1,504.00* |
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20.00% |
$1,252.00* |
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0.00% |
$1,000.00 |
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-20.00% |
$1,100.00 |
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-30.00% |
$1,150.00 |
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-31.00% |
$690.00 |
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-40.00% |
$600.00 |
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-60.00% |
$400.00 |
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-80.00% |
$200.00 |
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-100.00% |
$0.00 |
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*Assumes a leverage factor of 126% |
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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 do not guarantee the return of any principal and do not pay interest.
●Any positive return on the securities that is based on the depreciation of the worst performing underlier is effectively capped.
●The amount payable on the securities is not linked to the values of the underliers at any time other than the observation date.
●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(s), the securities are subject to the following risk(s), as discussed in more detail in the accompanying product supplement.
oYou are exposed to the price risk of each underlier.
oBecause the securities are linked to the performance of the worst performing underlier, you are exposed to a greater risk of not receiving a positive return on the securities and/or sustaining a significant loss on your investment than if the securities were linked to just one underlier.
oAdjustments to an underlying index could adversely affect the value of the securities.
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.