Morgan Stanley FWP: 13.5% Auto-Call, 150% Upside on KKR Note

Morgan Stanley Finance LLC, guaranteed by Morgan Stanley, is marketing $1,000-denominated “KKR Jump Securities with Auto-Callable Feature” maturing 3 Aug 2028.

Rhea-AI Filing Summary

Morgan Stanley Finance LLC, guaranteed by Morgan Stanley, is marketing $1,000-denominated “KKR Jump Securities with Auto-Callable Feature” maturing 3 Aug 2028. The notes are linked to KKR & Co. Inc. common stock. If on the first determination date (5 Aug 2026) KKR closes at or above its initial level, the notes are automatically redeemed for $1,135–$1,145, delivering a 13.5-14.5 % gross return with no further upside. If not redeemed, at maturity investors receive 150 % of any positive stock performance, while principal is protected only down to the 60 % downside threshold; below that, losses mirror the stock decline (e.g., –41 % stock drop pays $590). No coupons are paid. The indicative value is $948.10, reflecting issuance fees and hedging costs, and the notes are unsecured, unlisted and subject to Morgan Stanley’s credit risk. Pricing date is 29 Jul 2025; CUSIP 61778NET4. Investors should consult the amended preliminary pricing supplement, product supplement and prospectus for full risk, tax and valuation details.

Positive

• 150 % participation rate on upside if note is held to maturity, enhancing potential return versus direct stock ownership.
• Early redemption premium of 13.5-14.5 % after one year provides an attractive fixed yield if the stock is flat or modestly higher.
• 60 % downside barrier affords partial principal protection against moderate share-price declines.

Negative

• Principal is at full risk once KKR closes below 60 % of initial level at maturity, creating significant tail risk.
• Estimated value of $948.10 is materially below the $1,000 issue price, implying an upfront cost to investors.
• No periodic coupons and forfeiture of KKR dividends reduce carry versus holding the equity.
• Unsecured, unlisted note exposes holders to Morgan Stanley credit risk and limited secondary liquidity.

Insights

Financial Analyst

TL;DR: 13.5-14.5 % early call, 150 % upside, 40 % soft protection; credit and valuation drag temper appeal.

The note offers an attractive headline—150 % participation and a potential double-digit call premium after one year. However, the estimated value (≈ $948) indicates a ~5 % issuance premium that investors effectively pay upfront. With no coupons and no listing, liquidity is limited. Principal is at full risk once KKR breaches the 60 % barrier, exposing holders to sharp equity downside while receiving only partial upside (150 %) and forfeiting dividends. Credit risk to Morgan Stanley and the lack of secondary market depth further dilute risk-adjusted returns. Overall impact on Morgan Stanley equity is negligible; for investors, risk-reward skews neutral.

Structured Products Specialist

TL;DR: Classic auto-call note with barrier; pricing and credit terms standard for MS shelf.

This issuance follows Morgan Stanley’s typical retail structured-note template. Early redemption hinges on a single observation, capping upside at ~14 % in year one. The 150 % participation beyond that is competitive, yet investors face 100 % downside below the 60 % barrier—a relatively thin cushion for a single-stock underlying. The credit-linked nature (MSFL subsidiary, MS guarantee) means spread widening could pressure secondary values irrespective of KKR performance. Tax treatment remains uncertain under current IRS guidelines. From a market standpoint, terms are within recent peer comparables, offering neither unusually generous nor punitive economics—hence a neutral impact rating.

FAQ

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

What is the early redemption feature on Morgan Stanley's KKR Jump Securities?

If on 5 Aug 2026 KKR closes at or above its initial level, the notes are automatically redeemed for $1,135–$1,145 per $1,000 note.

How much upside do investors receive at maturity if the note is not called?

Investors receive 150 % of any positive price change in KKR stock, with no cap, subject to credit risk.

What level of downside protection is provided?

Principal is protected only while KKR remains above 60 % of the initial level; below that, losses mirror the stock’s decline.

Why is the estimated value ($948.10) below the $1,000 issue price?

The difference reflects structuring, distribution and hedging costs plus Morgan Stanley’s funding spread, reducing economic value to investors.

Are the securities listed on an exchange?

No. The notes are unlisted; secondary trading, if any, will be limited and based on Morgan Stanley’s indicative valuations.

Do the notes pay periodic interest or dividends?

They pay no coupons and do not provide KKR dividends. Return is delivered only via early redemption or maturity payment.

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

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Accepted by SEC EDGAR 07/08/2025 - 01:37 PM Learn about SEC filing dates

Free Writing Prospectus to Amendment No.1 dated July 8, 2025 relating to

Preliminary Pricing Supplement No. 9,152

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

Dated June 27, 2025; Filed pursuant to Rule 433

Morgan Stanley

KKR Jump Securities with Auto-Callable Feature due August 3, 2028

This document provides a summary of the terms of the securities. Investors must carefully review the accompanying amended preliminary pricing supplement referenced below, product 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:	KKR & Co. Inc. common stock (KKR)
Automatic early redemption:	If, on the first determination date, the closing level of the underlier is greater than or equal to the call threshold level, the securities will be automatically redeemed for the early redemption payment. No further payments will be made on the securities once they have been automatically redeemed.
First determination date:	August 5, 2026
Call threshold level:	100% of the initial level
Early redemption payment:	$1,135 to $1,145 per security
Participation rate:	150%
Downside threshold level:	60% of the initial level
Pricing date:	July 29, 2025
Final determination date:	July 31, 2028
Maturity date:	August 3, 2028
CUSIP:	61778NET4
Estimated value:	$948.10 per security, or within $45.00 of that estimate

Amended preliminary pricing supplement: https://www.sec.gov/Archives/edgar/data/895421/000183988225037598/ms9152_424b2-20455.htm

1All payments are subject to our credit risk

Hypothetical Payment at Maturity1 (if the securities have not been automatically redeemed prior to maturity)
% Change in Closing Level of the Underlier	Payment at Maturity (per Security)
+60.00%	$1,900.00
+40.00%	$1,600.00
+20.00%	$1,300.00
0.00%	$1,000.00
-20.00%	$1,000.00
-40.00%	$1,000.00
-41.00%	$590.00
-60.00%	$400.00
-80.00%	$200.00
-100.00%	$0.00

 

 

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 amended preliminary pricing supplement.

Risk Considerations

The risks set forth below are discussed in more detail in the “Risk Factors” section in the accompanying amended 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.

●If the securities are automatically redeemed prior to maturity, the appreciation potential of the securities is limited by the fixed early redemption payment specified for the first determination date.

●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(s), the securities are subject to the following risk(s), as discussed in more detail in the accompanying product supplement.

oWe have no affiliation with any underlying stock issuer.

oWe may engage in business with or involving any underlying stock issuer without regard to your interests.

oThe anti-dilution adjustments the calculation agent is required to make do not cover every corporate event that could affect an underlying stock.

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 amended 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.