Morgan Stanley Issues $1.197 Billion Fixed Rate Notes Due 2030 at 4.5% Annual Interest

Issuance Details and Pricing Structure

Morgan Stanley priced Fixed Rate Notes totaling $1.197 billion in aggregate principal amount on July 16, 2026, with an original issue date of July 20, 2026. The notes have a maturity date of July 19, 2030, and carry a fixed interest rate of 4.5% per annum. Each note has a stated principal amount and issue price of $1,000. Interest will accrue and be paid in arrears on a semi-annual basis, with payment dates falling on the 19th calendar day of January and July each year, beginning with the initial interest payment on January 19, 2027. The day-count convention for interest calculations follows the 30/360 (Bond Basis) standard.

At maturity on July 19, 2030, investors will receive the stated principal amount of $1,000 per note plus accrued and unpaid interest. The notes are denominated in U.S. dollars and trade on a book-entry basis, with the Bank of New York Mellon serving as trustee. The CUSIP is 61760QXJ8, and the ISIN is US61760QXJ83. The notes are not listed on any securities exchange. Morgan Stanley & Co. LLC, a wholly owned subsidiary of Morgan Stanley, acts as agent for the offering.

Valuation and Estimated Pricing on Issue Date

Although the issue price is $1,000 per note, the disclosure states that the estimated value of each note on the pricing date was $984.30 per note. This difference reflects costs associated with issuing, selling, structuring, and hedging the notes, which are borne by investors. Morgan Stanley uses its own pricing and valuation models to estimate the notes' value, incorporating market inputs and assumptions relating to volatility, current and expected interest rates, and an interest rate related to the company's secondary market credit spread.

The filing explains that the secondary market price at which Morgan Stanley & Co. may purchase notes absent changes in market conditions could vary from and potentially be lower than the estimated value on the pricing date. This variation accounts for Morgan Stanley's secondary market credit spread, the bid-offer spread charged in secondary market transactions, costs of unwinding hedging transactions, and other factors. Importantly, the filing discloses that Morgan Stanley & Co. may make a market in the notes but is not obligated to do so and may cease market-making activity at any time.

Economic Terms and Internal Funding Rates

In determining the economic terms of the notes, including the interest rate, Morgan Stanley employs an internal funding rate that the filing indicates is likely to be lower than the company's secondary market credit spreads, advantageous to the issuer. The disclosure notes that if issuing, selling, structuring, and hedging costs borne by investors were lower, or if the internal funding rate were higher, one or more of the economic terms would be more favorable to investors. This transparency addresses the structural economics underlying the debt issuance and highlights the cost differential built into the securities from inception.

Commission Structure and Dealer Compensation

Selected dealers, including Morgan Stanley Wealth Management (an affiliate of the agent), and their financial advisors will collectively receive a fixed sales commission of $5 per note sold, with a total of $5,985 on the aggregate $1.197 billion issuance. However, dealers selling notes to investors purchasing securities in fee-based advisory accounts will not receive a sales commission on those transactions. The price to public for investors in fee-based advisory accounts is $995 per note, reflecting the absence of the embedded commission.

The proceeds to Morgan Stanley from the issuance total $1,191,015 after deducting agent commissions and fees of $5,985. This structure accommodates different distribution channels and advisor compensation arrangements while ensuring disclosure of all material terms to investors.

Credit Risk and Default Exposure

The filing emphasizes that all payments on the notes are subject to the credit risk of Morgan Stanley. These securities are not secured obligations, and investors will not have any security interest in or otherwise have any access to any underlying reference asset. If Morgan Stanley defaults on its obligations under the notes, investors could lose some or all of their investment. The notes are not guaranteed by any other entity and are not deposits or savings accounts insured by the Federal Deposit Insurance Corporation or any other governmental agency.

The disclosure warns that investors are dependent on Morgan Stanley's ability to pay all amounts due on interest payment dates and at maturity. Consequently, investors are directly exposed to Morgan Stanley's creditworthiness. Any actual or anticipated changes to Morgan Stanley's credit ratings or credit spreads may adversely affect the market value of the notes before maturity. Declines in credit ratings or increases in credit spreads charged by the market are likely to reduce the value of the notes.

Secondary Market Price Volatility and Interest Rate Risk

The price at which notes may be sold prior to maturity will depend on multiple factors and may be substantially less than the original purchase price. Material factors include actual or anticipated changes in interest and yield rates, any changes in Morgan Stanley's credit ratings or credit spreads, and the time remaining to maturity. Generally, the longer the time remaining to maturity and the more tailored the exposure, the more significantly market prices will be affected by these factors, potentially resulting in substantial adverse changes in value.

The filing states that depending on the actual or anticipated level of interest and yield rates, the market value of the notes is expected to decrease, and investors may receive substantially less than 100% of the issue price if they sell notes prior to maturity. This disclosure clarifies that investors purchasing these notes intending to hold them until maturity face different risk profiles than those seeking secondary market liquidity before the July 2030 maturity date.

Structural Disadvantages in Economic Terms

The disclosure highlights that the rate Morgan Stanley is willing to pay for securities of this type, maturity, and issuance size is likely to be lower than the rate implied by the company's secondary market credit spreads and advantageous to Morgan Stanley. Both the lower rate relative to secondary market benchmarks and the inclusion of issuance, selling, structuring, and hedging costs in the original issue price reduce the economic terms offered to investors, lower the estimated value of the notes relative to the issue price, and will adversely affect secondary market prices.

This transparency regarding the structural economics of the offering underscores the difference between the internal pricing Morgan Stanley uses for issuance purposes and the market-based pricing that would prevail if these securities traded in a competitive secondary market. Assuming no change in market conditions or other relevant factors, the prices at which dealers are willing to purchase notes in secondary market transactions will likely be significantly lower than the original issue price.

Calculation Agent and Administrative Framework

Morgan Stanley Capital Services LLC serves as the calculation agent for the notes, responsible for computing interest accruals and payments according to the terms specified in the pricing supplement. The notes are held in book-entry form through the clearing system, eliminating the need for physical certificates. The Bank of New York Mellon acts as trustee, serving in its customary role of administering the debt securities and protecting noteholder interests as specified in the trust indenture governing Morgan Stanley's debt securities.

Registration and SEC Compliance

The pricing supplement was filed on July 17, 2026, pursuant to Rule 424(b)(2) under the Securities Act of 1933, referencing Registration Statement No. 333-293641. The notes are offered under an existing prospectus supplement dated April 8, 2026, and a base prospectus dated April 8, 2026. The filing includes the standard SEC disclaimer that the Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities or determined whether the pricing supplement or accompanying documents are truthful or complete. Any representation to the contrary is a criminal offense.