Morgan Stanley Finance LLC filed Pricing Supplement No. 16,981 on August 4, 2026, under Registration Statement Nos. 333-293641 and 333-293641-01, disclosing terms for its Trigger PLUS due August 5, 2031, linked to the worst performing of the Dow Jones Industrial Average and the S&P 500 Index.

Key Highlights

  • Aggregate principal amount: $270,000, at $1,000 per security, with proceeds to the issuer of $992.50 per security after agent commissions and fees of $7.50 per security.
  • Estimated value on pricing date: $974.70 per security, below the $1,000 issue price, reflecting costs of issuing, selling, structuring, and hedging.
  • Leverage factor: 139%, applied to the worst performing underlier's percent change if both underliers finish above their initial levels.
  • Downside threshold: 75% of each underlier's initial level - 39,363.773 for the INDU Index and 5,617.29 for the SPX Index.
  • Principal at risk: If either underlier's final level falls below its downside threshold, investors lose 1% for every 1% decline in the worst performing underlier, and the payment "could be zero."
  • Maturity date: August 5, 2031, with an observation date of July 31, 2031, subject to postponement for non-trading days and certain market disruption events.
  • No interest payments: The securities pay no interest and are not listed on any securities exchange.

Terms and Risk Structure of the MSFL Trigger PLUS Linked to INDU and SPX

According to the filing, the securities are unsecured obligations of Morgan Stanley Finance LLC (NYSE: MS), fully and unconditionally guaranteed by Morgan Stanley, and issued as part of MSFL's Series A Global Medium-Term Notes program. The agent is Morgan Stanley & Co. LLC, an affiliate of MSFL. The filing states that the securities will be sold only to investors purchasing in fee-based advisory accounts, and that MS & Co. expects to sell all securities it purchases to an unaffiliated dealer at $992.50 per security for further sale at the $1,000 public price. Selected dealers and their financial advisors may also receive a structuring fee of up to $6.25 per security from the agent or its affiliates.

The payment at maturity depends on three scenarios, as described in the filing. If the final level of each underlier is greater than its initial level - 52,485.03 for the INDU Index and 7,489.72 for the SPX Index, both closing levels on the July 31, 2026 strike date - investors receive the stated principal amount plus the leveraged upside payment, calculated using the 139% leverage factor applied to the worst performing underlier's percent change. If either underlier finishes at or below its initial level but both remain at or above their downside threshold levels, investors receive only the stated principal amount. If either underlier falls below its downside threshold, the payment equals the stated principal amount multiplied by the performance factor of the worst performing underlier.

The filing notes that the estimated value of $974.70 per security is derived using the issuer's own pricing and valuation models, incorporating market inputs, volatility assumptions, current and expected interest rates, and an internal funding rate described as "likely to be lower than our secondary market credit spreads and therefore advantageous to us." The filing also states that all payments are subject to the issuer's credit risk, the securities are not insured by the FDIC or any other governmental agency, and the securities are not deposits or savings accounts. The filing contains forward-looking statements that are the company's own and subject to its cautionary language.

What Was Disclosed

Morgan Stanley Finance LLC disclosed the pricing terms for $270,000 in aggregate principal of Trigger PLUS notes due August 5, 2031, linked to the worst performing of the Dow Jones Industrial Average and the S&P 500 Index, with a 139% leverage factor, a 75% downside threshold, and an estimated value of $974.70 per security.