[FWP] Morgan Stanley Free Writing Prospectus

Rhea-AI Filing Summary

Morgan Stanley Finance LLC, with a full guarantee from Morgan Stanley (NYSE: MS), has filed a Free Writing Prospectus for 1.25-Year Performance Leveraged Upside Securities (PLUS) linked to the EURO STOXX 50 Index (SX5E). The notes price on July 31 2025, settle on August 5 2025, and mature November 4 2026.

Payoff structure: investors receive their $1,000 principal plus a leveraged upside payment equal to 300 % of any index gain, but total proceeds are capped at $1,207.30 (20.73 %). If the index is flat or down, repayment equals $1,000 × (final/initial index value), exposing holders to uncapped 1-for-1 downside to a potential total loss of principal.

Key terms

• Initial index value: closing level on pricing date
• Valuation date: October 30 2026
• Estimated value: $966.40 (≈3.4 % below issue price)
• CUSIP/ISIN: 61778NNA5 / US61778NNA53
• Not exchange-listed; resale liquidity expected to be limited

Principal risks highlighted in the filing include (i) no periodic interest, (ii) full downside exposure, (iii) capped upside, (iv) Morgan Stanley credit risk, (v) secondary market price likely below issue price due to embedded fees and dealer spreads, (vi) potential adverse effects from issuer hedging, and (vii) uncertain U.S. tax treatment.

The product is designed for investors seeking short-dated, leveraged exposure to European large-cap equities who are willing to trade unlimited downside for a modest, capped upside and issuer credit exposure.

Positive

• 300 % upside leverage enables enhanced participation in modest SX5E gains relative to direct index investment.
• Short 15-month tenor reduces exposure to long-term market and credit uncertainties compared with longer-dated structured notes.

Negative

• Capped maximum return of 20.73 % significantly limits upside beyond a 6.91 % index gain.
• Full principal is at risk; any decline in SX5E results in a dollar-for-dollar loss up to 100 % of investment.
• Issuer credit risk: repayment depends on Morgan Stanley’s ability to meet senior obligations.
• Estimated value ($966.40) is below issue price, implying immediate negative carry for investors.
• Illiquidity: notes are not exchange-listed and secondary markets may offer wide bid-ask spreads.

Insights

Structured Products Analyst

TL;DR – 300 % leverage but upside capped at 20.73 %; full principal at risk; minimal impact on MS equity.

From a product design standpoint, the PLUS provides amplified participation in SX5E gains up to 6.91 % (after which the 20.73 % cap is hit) while leaving investors fully exposed to losses on a 1-for-1 basis. The economic value is quoted at $966.40, indicating roughly 34 bps per month of embedded fees and hedging costs over the 15-month tenor. Because the notes are senior unsecured obligations, performance is contingent on Morgan Stanley’s credit profile; any widening in MS credit spreads could pressure secondary market pricing. The offering size is not disclosed but, given typical retail note programs, the issuance is unlikely to materially affect Morgan Stanley’s funding mix or capital ratios.

For portfolio construction, this instrument functions similarly to a call spread financed by a short put, but with issuer credit risk layered on top. Risk-reward skews sharply negative beyond the 6.91 % index appreciation threshold and is strongly asymmetric on the downside. Investors comfortable with MS credit risk might consider listed SX5E options as an alternative that removes issuer exposure and potentially offers better pricing transparency.

Credit & Risk Analyst

TL;DR – Note adds low-cost funding for MS; credit risk resides with investors; neutral for MS bondholders.

The PLUS augments Morgan Stanley’s structured-note funding pipeline, typically issued at spreads tighter than equivalent senior unsecured benchmarks thanks to embedded derivative premiums. The estimated value shows the bank harvesting roughly 3.3 % of principal in fees, providing cheap term funding without materially extending duration. Because the size is presumably small relative to the firm’s $300 bn+ balance sheet, it will not move overall credit metrics. From the investor perspective, senior note status means recovery rates could mirror unsecured debt (≈40 %) in a default scenario, making the investment substantially riskier than direct SX5E exposure via ETFs. Overall impact on MS credit outlook is negligible.

Free Writing Prospectus to Preliminary Pricing Supplement No. 9,332

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

Dated July 15, 2025; Filed pursuant to Rule 433

Morgan Stanley

1 .25-Year SX5E PLUS

This document provides a summary of the terms of the PLUS. 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.

Summary Terms
Issuer:	Morgan Stanley Finance LLC
Guarantor:	Morgan Stanley
Maturity date:	November 4, 2026
Underlying index:	EURO STOXX 50® Index (“SX5E”)
Payment at maturity per PLUS1:	If the final index value is greater than the initial index value: $1,000 + leveraged upside payment In no event will the payment at maturity exceed the maximum payment at maturity. If the final index value is less than or equal to the initial index value: $1,000 × index performance factor Under these circumstances, the payment at maturity will be less than or equal to the stated principal amount of $1,000.
Leveraged upside payment:	$1,000 × leverage factor × index percent increase
Index percent increase:	(final index value – initial index value) / initial index value
Initial index value:	The index closing value on the pricing date
Final index value:	The index closing value on the valuation date
Valuation date:	October 30, 2026, subject to postponement for non-index business days and certain market disruption events
Leverage factor:	300%
Index performance factor:	Final index value divided by the initial index value
Maximum payment at maturity:	$1,207.30 per PLUS (120.73% of the stated principal amount)
Stated principal amount:	$1,000 per PLUS  
Issue price:	$1,000 per PLUS
Pricing date:	July 31, 2025
Original issue date:	August 5, 2025 (3 business days after the pricing date)
CUSIP/ISIN:	61778NNA5 / US61778NNA53
Preliminary pricing supplement:	https://www.sec.gov/Archives/edgar/data/895421/000183988225038801/ms9332_424b2-21259.htm
1All payments are subject to our credit risk

 

Hypothetical Payout at Maturity1

Change in Underlying Index	Return on PLUS
+50.00%	20.73%
+40.00%	20.73%
+30.00%	20.73%
+20.00%	20.73%
+10.00%	20.73%
+6.91%	20.73%
+6.00%	18.00%
+3.00%	9.00%
0.00%	0.00%
-10.00%	-10.00%
-20.00%	-20.00%
-30.00%	-30.00%
-40.00%	-40.00%
-50.00%	-50.00%
-60.00%	-60.00%
-80.00%	-80.00%
-100.00%	-100.00%

 

 

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.

 

Underlying Index

For more information about the underlying index, 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 PLUS

●The PLUS do not pay interest or guarantee return of any principal.

●The appreciation potential of the PLUS is limited by the maximum payment at maturity.

●The market price of the PLUS will be influenced by many unpredictable factors.

●The PLUS 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 PLUS.

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

●The estimated value of the PLUS is $966.40 per PLUS, or within $35.00 of that estimate, and 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 amount payable on the PLUS is not linked to the value of the underlying index at any time other than the valuation date.

●Investing in the PLUS is not equivalent to investing in the underlying index.

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

●The PLUS will not be listed on any securities exchange and secondary trading may be limited.

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

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

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

Risks Relating to the Underlying Index

●There are risks associated with investments in securities linked to the value of foreign equity securities.

●Governmental regulatory actions, such as sanctions, could adversely affect your investment in the PLUS.

●Adjustments to the underlying index could adversely affect the value of the PLUS.

Tax Considerations

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

 

FAQ

What is the maturity date of Morgan Stanley's 1.25-Year SX5E PLUS?

The notes mature on November 4 2026.

How much upside can investors earn on the SX5E PLUS?

Returns are capped at $1,207.30 per note, representing 20.73 % of the $1,000 principal.

What leverage factor applies to positive index performance?

Investors receive 300 % of the EURO STOXX 50's percentage gain, subject to the cap.

Do the PLUS protect principal if the index falls?

No. Payment equals $1,000 × (final/initial index value), leading to 1-for-1 downside and possible total loss.

What is the estimated value versus issue price?

Morgan Stanley estimates the value at $966.40, about 3.4 % below the $1,000 issue price.

Will the SX5E PLUS trade on an exchange?

No, the notes will not be listed; secondary trading, if any, will occur over-the-counter.