Morgan Stanley Finance LLC Introduces Buffered PLUS Securities with Principal Risk, Maturing November 2027

Detailed Overview of Buffered PLUS Securities

Morgan Stanley Finance LLC’s Buffered PLUS securities combine debt features with returns tied to market performance. These unsecured obligations are fully guaranteed by Morgan Stanley, offering investors a degree of security. Unlike traditional fixed-income instruments, these securities do not pay interest.

At maturity, investors receive their principal plus additional payments based on the performance of the worst-performing underlying index, appealing to those willing to sacrifice current income for potential market-linked gains.

Investment Mechanics and Associated Risks

The securities’ returns depend on the performance of three major indices: the Dow Jones Industrial Average, Nasdaq-100 Index, and Russell 2000 Index. The worst-performing index determines the payout. If this index’s final level exceeds its initial level, investors receive their principal plus a leveraged upside.

Conversely, if the index falls below its buffer threshold, investors face losses at a rate of 1% for every 1% decline beyond the buffer, underscoring the importance of understanding index performance before investing.

Terms, Conditions, and Important Dates

Each Buffered PLUS security has a stated principal of $1,000 and will be issued on August 14, 2026. The observation date for final payment calculation is November 11, 2027, subject to postponement due to market disruptions. These securities will not be listed on any exchange, potentially impacting liquidity.

Payments at maturity depend on index performance, with a minimum payout of 15% of the stated principal, highlighting the risk of principal loss if indices underperform.

Pricing and Estimated Value Insights

The initial issue price is $1,000 per security, covering issuance, selling, structuring, and hedging costs. The estimated value at pricing is expected to be below the issue price, reflecting these expenses. Final estimated values will be disclosed in the pricing supplement.

Understanding this estimated value is vital for investors to gauge costs and potential returns before committing capital. Pricing details will be finalized closer to issuance.

Distribution Strategy and Sales Process

Sales of Buffered PLUS securities will be limited to investors in fee-based advisory accounts. Morgan Stanley & Co. LLC, an affiliate of Morgan Stanley Finance LLC, will serve as the agent. Selected dealers may receive structuring fees for facilitating sales.

This targeted distribution approach aims to align the securities with investors suited for this structured product, emphasizing suitability and advisory oversight.

Investor Guidance and Market Considerations

Prospective investors should evaluate their risk tolerance, investment goals, and the outlook for the Dow Jones Industrial Average, Nasdaq-100 Index, and Russell 2000 Index. These securities suit investors accepting the risk of significant principal loss tied to market performance.

Monitoring market trends and economic factors influencing these indices is crucial throughout the investment term.

Credit Risk and Security Profile

As unsecured obligations of Morgan Stanley Finance LLC, these securities carry credit risk without collateral backing. A default by Morgan Stanley could result in partial or total loss of investment.

Assessing Morgan Stanley’s creditworthiness is essential for investors considering these securities.

Summary and Compliance Notice

The introduction of Buffered PLUS securities by Morgan Stanley Finance LLC offers a distinctive opportunity for exposure to major indices with principal risk and leveraged upside potential. Investors must carefully review all related materials and understand the risks before investing.

This announcement is for informational purposes only and does not constitute investment advice. Consultation with a financial advisor is recommended prior to any investment decisions.