Morgan Stanley SEC Filings

Morgan Stanley Finance LLC is offering $1,000-denomination Variable Income Auto-Callable Notes maturing 1 August 2030, fully and unconditionally guaranteed by Morgan Stanley. The notes are linked to the worst-performing of four U.S. equities—Palantir (PLTR), lululemon (LULU), Tesla (TSLA) and Affirm (AFRM)—and combine a monthly variable coupon with an automatic early-redemption feature.

Coupon mechanics: each month investors receive either a higher coupon of 9.50% p.a. or a lower coupon of 0.25% p.a.. The higher coupon is paid only if the closing price of each underlier on the relevant observation date is at least 75 % of its strike-date price (the “coupon barrier”). If any single stock closes below its barrier, only the lower coupon is paid for that period.

Auto-call feature: starting 29 July 2026 and on 47 subsequent monthly determination dates, the notes are automatically redeemed at par plus the higher coupon if the closing price of every underlier is at least 85 % of its strike-date price (the “call threshold”). Once called, no further coupons accrue.

Principal repayment: if the notes are not auto-called, holders receive full principal at maturity on 1 August 2030, regardless of underlier performance, in addition to the coupon for the final period. Investors do not participate in any appreciation of the stocks.

Pricing & valuation: issue price is $1,000, but Morgan Stanley’s estimated value on the pricing date is roughly $940.90 (±$55), reflecting distribution fees, hedging costs and the issuer’s lower internal funding rate. The notes will not be listed, and MS & Co. is not obliged to make a secondary market.

Key risks highlighted by the issuer include:

• Receipt of the higher coupon depends on all four stocks staying above their respective barriers on each observation date.
• Auto-call can shorten the investment horizon, potentially forcing reinvestment at lower rates.
• Unsecured exposure to Morgan Stanley credit risk; deterioration in the issuer’s credit spreads can depress secondary-market prices.
• Illiquidity risk: notes are unlisted and secondary trading, if any, may be at significant discounts.
• Estimated value below issue price and dealer bid/offer spreads may weigh on resale value.

The instrument is positioned for investors seeking regular income with principal protection at maturity (subject to issuer credit) and who are willing to accept the risk of earning only minimal coupons if any of the four volatile technology/consumer-discretionary stocks weaken.

The prospectus supplement describes Trigger PLUS securities issued by Morgan Stanley Finance LLC and guaranteed by Morgan Stanley that pay no interest and do not guarantee principal. Payout at maturity is determined solely by the worst performing underlier among the S&P 500, Nasdaq-100 and Dow Jones Industrial Average. If the worst performing underlier finishes above its initial level, investors receive principal plus 138% of that underlier's appreciation. If the worst performing underlier finishes at or above a downside threshold but not above the initial level, investors receive only principal. If the worst performing underlier finishes below the downside threshold, investors lose 1% of principal for each 1% decline in that underlier; there is no minimum payment. The securities are unsecured, subject to issuer credit risk, not exchange listed, may be illiquid, have uncertain U.S. federal tax treatment, and rely on Morgan Stanley affiliate MS&Co. as calculation agent.

Morgan Stanley Finance LLC (MSFL) is offering $510,000 aggregate principal amount of Fixed-Income Auto-Callable Securities due July 13, 2028, linked to the worst performer of KKR & Co. Inc. (KKR) and Dow Inc. (DOW) common stock. The notes are unsecured obligations of MSFL and are fully and unconditionally guaranteed by Morgan Stanley; repayment therefore depends on Morgan Stanley’s creditworthiness.

Key economic terms

• Issue price: $1,000 per note; CUSIP 61778NGW5; ISIN US61778NGW56
• Estimated value at pricing: $952.70 (4.7 % below issue price, reflecting fees and internal funding rate)
• Coupon: 11.10 % fixed annual rate, paid monthly, regardless of underlier performance until redemption/maturity
• Automatic early redemption: possible on ten quarterly determination dates beginning Jan 8 2026 if each underlier closes ≥ its call threshold (100 % of initial level). Early redemption pays principal plus accrued coupon; no further payments thereafter.
• Downside protection: none below 50 % of initial level. If not called and the final level of either underlier is < 50 % of its initial level, principal is reduced 1 % for every 1 % decline of the worst performer, down to zero.
• Initial levels: KKR $143.05; DOW $30.23. Thus downside thresholds are $71.525 and $15.115 respectively; call thresholds equal the initial levels.
• Liquidity: not listed; MS & Co. may make a secondary market but is not obliged to do so.

Risk / return profile

• Investors receive high fixed coupons and potential early return of capital if both stocks stay at or above current levels.
• Investors forfeit upside in either stock and face full downside exposure below the 50 % barrier; the final payoff depends solely on the worst-performing stock.
• The notes’ value will be sensitive to equity volatility, correlation, interest-rate moves, dividends, and Morgan Stanley credit spreads.
• Because the estimated value is below issue price and the notes embed dealer compensation of $25 per note, secondary prices are expected to trade below par, absent favorable market moves.

Structural considerations

• First possible call occurs roughly six months after issuance; investors are locked in until then.
• Principal is at risk; there is no minimum repayment.
• Tax treatment is uncertain; counsel believes the securities should be treated as a combination of a deposit and a written put option, but the IRS could disagree.
• Aggregate size is modest for Morgan Stanley (<$1 million including fees), suggesting limited impact on the issuer’s financials.

Overall, the product targets yield-seeking investors willing to trade equity upside and principal protection for a double-trigger high coupon, accepting issuer credit risk and potentially severe capital loss if either KKR or DOW falls more than 50 % by July 2028.

Offering overview: Morgan Stanley Finance LLC is issuing $250,000 of Jump Securities with an auto-callable feature maturing 13 July 2028. Each $1,000 note is fully and unconditionally guaranteed by Morgan Stanley, but is principal-at-risk and pays no periodic interest.

Underlying assets: Apple (AAPL), Alphabet Class A (GOOGL), UnitedHealth Group (UNH) and the SPDR S&P Biotech ETF (XBI). Performance is assessed on a worst-of basis; therefore a sharp decline in any single underlier drives the entire payoff.

Key strike data (10 July 2025): Initial levels AAPL $211.14, GOOGL $176.62, UNH $302.91, XBI $87.87. Call thresholds are set at 100 % of these levels; downside thresholds are 90 %.

Early redemption schedule: 24 monthly determination dates starting 14 July 2026. If every underlier closes at or above its call threshold on a determination date, the note is automatically redeemed for the corresponding cash amount that equates to an approx. 47.40 % simple annual return (e.g., $1,474 on the first date, rising to $2,382.50 by the 24th).

Maturity payment (if not previously called): • $2,422 (142.2 % of par) if all underliers ≥ call thresholds. • Par ($1,000) if any underlier < call threshold but all ≥ downside thresholds. • $1,000 × worst-performing underlier’s performance factor if any underlier < downside threshold – exposing investors to losses of up to 100 % of principal.

Pricing economics: Issue price $1,000; estimated value on pricing date $958.70, reflecting issuer funding spreads and embedded distribution costs. Agent commissions total $2.50 per note (0.25 %). Notes will not be listed; liquidity will rely on Morgan Stanley & Co. making a secondary market.

Risk highlights: 1) No principal protection; downside begins if any underlier falls >10 %. 2) Investors forgo all upside beyond the fixed early-redemption or maturity payment. 3) Credit exposure to Morgan Stanley and MSFL. 4) Biotech sector concentration via XBI raises volatility. 5) Complex tax treatment; potential Section 1260 constructive-ownership implications. 6) Secondary market prices likely to be below issue price due to bid/ask and credit spread effects.

Investor profile: Suitable only for fee-based advisory accounts willing to trade higher credit and market risk for the possibility of double-digit fixed returns, and who can analyze multi-asset worst-of structures.