Morgan Stanley Finance Issues Callable Contingent Income Securities Linked to Three Major Market Indexes

Contingent Coupon Structure and Payment Conditions

The securities will deliver a contingent coupon at an annual rate of 12.85%, paid on each coupon payment date, but only under specific conditions. The disclosure states that payment occurs only if the closing level of each of the three underliers is greater than or equal to its designated coupon barrier level on the related observation date. This means that all three underliers must satisfy the coupon barrier condition simultaneously for investors to receive the interest payment. If the closing level of any single underlier falls below its coupon barrier level on any observation date, the company will pay no interest with respect to that related interest period.

This contingent structure distinguishes the securities from conventional debt instruments that pay fixed interest regardless of market conditions. Investors seeking the attractive 12.85% annual rate must accept the possibility of receiving zero coupon payments throughout the entire three-year term if market conditions trigger the payment barrier. The worst-of structure means that strong performance by two underliers will not protect investors if the third underlier underperforms relative to its barrier level.

Principal-at-Risk Feature and Maturity Payoff

The securities do not guarantee the repayment of principal and do not provide for regular interest payments as standard bonds do. At maturity on July 26, 2029, if the securities have not been redeemed prior to that date and the final level of each underlier is greater than or equal to its downside threshold level, investors will receive the stated principal amount of $1,000 plus any applicable contingent coupon from the final observation date. However, if the final level of any underlier falls below its downside threshold level, investors will experience principal losses.

The filing specifies that if the downside threshold is breached, investors will lose 1% of principal for every 1% decline in the level of the worst performing underlier over the term of the securities. This loss mechanism means that under adverse market conditions, the payment at maturity could be significantly less than the stated principal amount and could be zero. The disclosure emphasizes that linking the securities to multiple underliers does not provide asset diversification benefits; instead, a decline in any underlier beyond its designated levels will negatively affect returns even if other underliers have appreciated.

Early Redemption Rights and Call Feature Mechanism

The securities incorporate a call feature that permits Morgan Stanley to redeem the notes early under specified economic conditions. According to the disclosure, the company will redeem the securities on any redemption date for a redemption payment equal to the stated principal amount plus any contingent coupon otherwise due, if and only if the output of a risk neutral valuation model indicates that redeeming on such date is economically rational for the issuer compared to not redeeming. The securities are not subject to early redemption until the first redemption date of January 26, 2027.

Beginning on January 26, 2027, early redemption can occur on any of 32 specified redemption dates running through June 26, 2029. The calculation agent will select a business day as the determination date, no earlier than three business days before the observation date preceding the redemption date and no later than such observation date, to conduct the valuation model analysis. The model takes as input prevailing reference market levels, volatilities, correlations as of the determination date, and Morgan Stanley's credit spreads as of the pricing date. If early redemption occurs, no further payments will be made on the securities, potentially cutting short an investor's opportunity to receive future coupons.

Three Underliers and Worst-of Construction

The securities are linked to three distinct market benchmarks: the Dow Jones Industrial Average, the Russell 2000 Index, and the State Street Technology Select Sector SPDR ETF. The filing identifies the first two as underlying indexes and the third as an underlying fund. The use of a worst-of structure means that the securities' return depends on whichever underlier experiences the weakest relative performance. This construction introduces correlation risk and means that even if two of the three underliers perform well, a significant decline in the third underlier will determine the investor's outcome.

The disclosure explicitly warns that linking the securities to multiple underliers does not provide diversification benefits. Rather, a decline in any single underlier beyond its coupon barrier level or downside threshold level will adversely affect returns, even if other underliers have appreciated or declined less severely. Investors will not participate in any appreciation of any underlier; they can only experience neutral or negative returns, depending on whether the coupons are paid and whether principal is preserved at maturity.

Estimated Value and Pricing Details

Morgan Stanley estimated the value of the securities on the pricing date at approximately $981.10 per security, or within $30.00 of that estimate. The securities are issued at a stated principal amount of $1,000 per security. This estimated value of $981.10 represents an initial discount to par of approximately $18.90 per security, or roughly 1.89% below the issue price. The filing states that investors purchasing these securities should understand the estimated value calculation and its implications for the initial investment position.

The agent for the offering, Morgan Stanley & Co. LLC, is an affiliate of Morgan Stanley Finance LLC and a wholly owned subsidiary of Morgan Stanley. The disclosure notes that the securities will be sold only to investors purchasing in fee-based advisory accounts. MS & Co. expects to sell all securities it purchases from MSFL to an unaffiliated dealer at a specified price for further sale to fee-based advisory accounts at the public price of $1,000 per security. MS & Co. will not receive a sales commission with respect to the securities.

Credit Risk and Guarantee Structure

Although the securities are issued by Morgan Stanley Finance LLC, they are fully and unconditionally guaranteed by Morgan Stanley, the parent company. However, the filing emphasizes that all payments remain subject to Morgan Stanley's credit risk. If Morgan Stanley defaults on its obligations, investors could lose some or all of their investment. The securities are unsecured obligations and are not secured by any underlying reference assets or other collateral. Investors have no security interest in or otherwise any access to any underlying assets.

The disclosure states clearly that the securities are not deposits or savings accounts and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality, nor are they obligations of or guaranteed by a bank. This language distinguishes these structured notes from traditional bank deposits and emphasizes the issuer credit risk element. Morgan Stanley's credit standing and financial condition therefore directly affect the securities' safety and value.

Aggregate Principal Amount and Distribution Terms

The aggregate principal amount of the offering was not disclosed in this preliminary pricing supplement. The filing indicates that commissions, fees, and proceeds figures were left blank in the terms table, indicating that these specific amounts were to be determined at the time of final pricing. The securities were issued as part of Morgan Stanley Finance LLC's Series A Global Medium-Term Notes program, under registration statement numbers 333-293641 and 333-293641-01.

The filing was made pursuant to Rule 424(b)(2) under the Securities Act of 1933, indicating this was a preliminary pricing supplement dated July 17, 2026. The pricing date was scheduled for July 21, 2026, with the original issue date set for July 24, 2026. The final observation date is July 23, 2029, subject to postponement for non-trading days and certain market disruption events. These dates establish the timeline for when barrier levels, coupon payments, and final maturity payoff determinations would occur.

Investment Profile and Risk Considerations

The disclosure describes the securities as appropriate for investors who seek an opportunity to earn interest at a potentially above-market rate in exchange for the risk of losing a significant portion or all of their principal, the risk of receiving no coupons over the entire term of the securities, and the risk of an early redemption based on the valuation model. The 12.85% annual coupon rate, if paid in full over the three-year period, would exceed typical fixed-income yields, compensating investors for accepting the principal-at-risk structure and contingent coupon feature.

The filing emphasizes that investors in the securities must be willing to accept the risk of losing their entire initial investment based on the performance of any underlier. The worst-of linkage means that even a single underlier experiencing a decline greater than its downside threshold could result in total principal loss. Additionally, investors will not participate in any appreciation of any underlier, meaning the securities offer a limited upside return scenario compared to direct index or fund investments.

Regulatory Approval Status and Product Documentation

The filing includes a standard regulatory disclaimer stating that the Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if the pricing supplement or accompanying product supplement, index supplement, tax supplement, and prospectus is truthful or complete. Any representation to the contrary would constitute a criminal offense. This language is standard in preliminary pricing supplements filed under Rule 424(b)(2) prior to final pricing and distribution of the securities.

The complete terms and conditions of the securities are contained in the accompanying product supplement for principal at risk securities dated April 8, 2026, the index supplement dated April 8, 2026, the tax supplement dated April 8, 2026, and the prospectus dated April 8, 2026. These documents, along with the preliminary pricing supplement, form the complete offering documentation that investors would review before making an investment decision. The filing references additional terms and information available in these supporting documents.