Obligation Morgan Stanleigh 7.1% ( US61761JFU88 ) en USD

Morgan Stanleigh

100 % ▼

Etas-Unis

US61761JFU88 ( en USD )

7.1% par an ( paiement semestriel )

30/05/2028

Prospectus brochure de l'obligation Morgan Stanley US61761JFU88 en USD 7.1%, échéance 30/05/2028

1 000 USD

31 132 000 USD

61761JFU8

N/A

30/11/2025 ( Dans 147 jours )

Morgan Stanley est une firme mondiale de services financiers offrant des services de banque d'investissement, de gestion de patrimoine et de courtage à une clientèle institutionnelle et privée.

L'Obligation émise par Morgan Stanleigh ( Etas-Unis ) , en USD, avec le code ISIN US61761JFU88, paye un coupon de 7.1% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 30/05/2028

L'Obligation émise par Morgan Stanleigh ( Etas-Unis ) , en USD, avec le code ISIN US61761JFU88, a été notée NR par l'agence de notation Moody's.

http://www.sec.gov/Archives/edgar/data/895421/000095010313003268/...
424B2 1 dp38513_424b2-ps761.htm FORM 424B2
CALCULATION OF REGISTRATION FEE

Maximum Aggregate
Amount of Registration

Title of Each Class of Securities Offered
Offering Price
Fee
Contingent Income Securities due 2028

$31,132,000

$4,246.40
May 2013
Pricing Supplement No. 761
Registration Statement No. 333-178081
Dated May 24, 2013
Filed pursuant to Rule 424(b)(2)
STRUCTURED INVESTMENTS
Opportunities in U.S. Equities
Contingent Income Securities due May 30, 2028
Payments on the Securities Based on the Worst Performing of the Russell 2000® Index and the S&P 500® Index
The securities are senior unsecured obligations of Morgan Stanley and have the terms described in the accompanying prospectus supplement, index
supplement and prospectus, as supplemented or modified by this document. The securities do not guarantee the repayment of principal and do not
provide for the regular payment of interest after the first 5 years. For the first 5 years, the securities wil pay a fixed monthly coupon at the rate specified
below. Thereafter, the securities wil pay a contingent monthly coupon but only if the index closing value of each of the Russell 2000® Index and the
S&P 500® Index on the related observation date is at or above 50% of its respective initial index value, which we refer to as the barrier level. If the
index closing value of either underlying index is less than the barrier level for such index on any observation date after the first 5 years, we wil pay no
interest for the related interest period. At maturity, if the final index value of each underlying index is greater than or equal to the barrier level of 50% of
the respective initial index value, the payment at maturity wil be the stated principal amount and the related contingent monthly coupon. If, however, the
final index value of either underlying index is less than its barrier level, investors wil be exposed to the decline in the worst performing underlying index on
a 1 to 1 basis and wil receive a payment at maturity that is less than 50% of the stated principal amount of the securities and could be
zero. Accordingly, investors in the securities must be willing to accept the risk of losing their entire initial investment based on the
performance of either index and also the risk of not receiving any monthly coupons after the first 5 years. Because payments on the securities
are based on the worst performing of the underlying indices, a decline beyond the respective barrier level of either underlying index wil result in few or no
contingent monthly coupons after the first 5 years and/or a significant loss of your investment, even if the other underlying index has appreciated or has not
declined as much. These long-dated securities are for investors who are wil ing to risk their principal and seek an opportunity to earn interest at a
potential y above-market rate in exchange for the risk of receiving no monthly interest after the first 5 years if either underlying index closes below the
barrier level for such index on the observation dates. The securities are senior notes issued as part of Morgan Stanley's Series F Global Medium-Term
Notes program. Al payments on the securities are subject to the credit risk of Morgan Stanley.
FINAL TERMS
Issuer:
Morgan Stanley
Underlying indices:
Russel 2000® Index (the "RTY Index") and S&P 500® Index (the "SPX Index")
Aggregate principal amount:
$31,132,000
Stated principal amount:
$1,000 per security
Issue price:
$1,000 per security (See "Commissions and issue price" below)
Pricing date:
May 24, 2013
Original issue date:
May 30, 2013 (3 business days after the pricing date)
Maturity date:
May 30, 2028
Monthly coupon:
Years 1-5: On all coupon payment dates through May 2018, a fixed coupon at an annual rate of 7.10%
(corresponding to approximately $5.9167 per month per security) is paid monthly.

Years 6-15: Beginning with the June 2018 coupon payment date, a contingent coupon at an annual rate of 7.10%
(corresponding to approximately $5.9167 per month per security) is paid monthly but only if the closing value of
each underlying index is at or above its respective barrier level on the related observation date.

If, on any observation date in years 6-15, the closing value of either underlying index is less than the
barrier level for such index, we will pay no coupon for the applicable interest period. It is possible that one
or both underlying indices will remain below the respective barrier level(s) for extended periods of time or
even throughout years 6-15 so that you will receive few or no contingent monthly coupons during that
period.
Barrier level:
With respect to the RTY Index: 492.14, which is 50% of the initial index value for such index
With respect to the SPX Index: 824.80, which is 50% of the initial index value for such index
Payment at maturity:
If the final index value of each underlying index is greater than or equal to its respective barrier level: the stated
principal amount and the contingent monthly coupon with respect to the final observation date

If the final index value of either underlying index is less than its respective barrier level: (i) the stated principal
amount multiplied by (i ) the index performance factor of the worst performing underlying index. This amount wil be
less than 50% of the stated principal amount of the securities and could be zero.

Terms continued on the following page
Agent:
Morgan Stanley & Co. LLC ("MS & Co."), a whol y-owned subsidiary of Morgan Stanley. See "Supplemental
information regarding plan of distribution; conflicts of interest."
Commissions and issue price:
Price to public(1)
Agent's commissions(2)
Proceeds to issuer
Per security
$1,000
$35
$965
Total
$31,132,000
$1,089,620
$30,042,380
(1) The price to public for investors purchasing the securities in fee-based advisory accounts will be $970 per security.
(2) Selected dealers and their financial advisors will collectively receive from the Agent, MS & Co., a fixed sales commission of $35 for each security they sell; provided that dealers selling to
investors purchasing the securities in fee-based advisory accounts will receive a sales commission of $5 per security. See "Supplemental information regarding plan of distribution;
conflicts of interest." For additional information, see "Plan of Distribution (Conflicts of Interest)" in the accompanying prospectus supplement.

1 of 28
5/29/2013 4:07 PM

http://www.sec.gov/Archives/edgar/data/895421/000095010313003268/...
The securities involve risks not associated with an investment in ordinary debt securities. See "Risk Factors" beginning on page 8.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this
document or the accompanying prospectus supplement, index supplement and prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

The securities are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they
obligations of, or guaranteed by, a bank.

You should read this document together with the related prospectus supplement, index supplement and prospectus, each of which can be accessed via
the hyperlinks below. Please also see "Additional Information About the Securities" at the end of this document.

Prospectus Supplement dated November 21, 2011
Index Supplement dated November 21, 2011
Prospectus dated November 21, 2011

2 of 28
5/29/2013 4:07 PM

http://www.sec.gov/Archives/edgar/data/895421/000095010313003268/...

Contingent Income Securities due May 30, 2028
Payments on the Securities Based on the Worst Performing of the Russell 2000® Index and the S&P 500® Index

Terms continued from previous page:
Initial index value:
With respect to the RTY Index: 984.28, which is the index closing value of such index on the pricing date
With respect to the SPX Index: 1,649.60, which is the index closing value of such index on the pricing date
Final index value:
With respect to each index, the respective index closing value on the final observation date
Worst performing
The underlying index with the larger percentage decrease from the respective initial index value to the respective
underlying index:
final index value
Index performance factor:
Final index value divided by the initial index value
Coupon payment dates:
The 30th day of each month (or, in the case of February, the last calendar day of such month), beginning June 30,
2013; provided that if any such day is not a business day, that monthly coupon, if any, wil be paid on the next
succeeding business day and no adjustment wil be made to any coupon payment made on that succeeding
business day; provided further that the contingent monthly coupon, if any, with respect to the final observation date
shal be paid on the maturity date.
Observation dates:
The third scheduled business day preceding each scheduled coupon payment date, beginning with the June 30,
2018 coupon payment date, subject to postponement for non-index business days and certain market disruption
events. We also refer to the third scheduled business day prior to the scheduled maturity date as the final
observation date.
CUSIP / ISIN:
61761JFU8 / US61761JFU88
Listing:
The securities wil not be listed on any securities exchange.

May 2013
Page 2

3 of 28
5/29/2013 4:07 PM

http://www.sec.gov/Archives/edgar/data/895421/000095010313003268/...

Contingent Income Securities due May 30, 2028
Payments on the Securities Based on the Worst Performing of the Russell 2000® Index and the S&P 500® Index

Investment Overview

Contingent Income Securities due May 30, 2028 Payments on the Securities Based on the Worst Performing of the Russell 2000® Index and the S&P
500® Index (the "securities") do not guarantee the repayment of principal and do not provide for the regular payment of interest after the first 5 years. For
the first 5 years, the securities wil pay a fixed monthly coupon at the rate specified below. Thereafter, the securities wil pay a contingent monthly coupon
but only if the index closing value of each of the Russell 2000® Index and the S&P 500® Index (which we refer to together as the "underlying indices")
is at or above 50% of its respective initial index value, which we refer to as the barrier level, on the related observation date. If the index closing value of
either underlying index is less than the barrier level for such index on any observation date after the first 5 years, we wil pay no coupon for the related
monthly period. It is possible that the index closing value of one or both underlying indices wil remain below the respective barrier level(s) for extended
periods of time or even throughout years 6-15 so that you wil receive few or no contingent monthly coupons during that period. We refer to the coupon on
the securities after the first 5 years as contingent, because there is no guarantee that you wil receive a coupon payment on any coupon payment date
during that period. Even if an underlying index were to be at or above the barrier level for such index on some monthly observation dates, it may fluctuate
below the barrier level on others. In addition, even if one underlying index were to be at or above the barrier level for such index on al monthly observation
dates, you wil receive a contingent monthly coupon during years 6-15 only with respect to the observation dates on which the other underlying index is
also at or above the barrier level for such index, if any. At maturity, if the final index value of each underlying index is greater than or equal to the barrier
level of 50% of the respective initial index value, the payment at maturity wil be the stated principal amount and the related contingent monthly coupon. If,
however, the final index value of either underlying index is less than its barrier level, investors wil be exposed to the decline in the worst performing
underlying index on a 1 to 1 basis and wil receive a payment at maturity that is less than 50% of the stated principal amount of the securities and could be
zero. Accordingly, investors in the securities must be willing to accept the risk of losing their entire initial investment based on the
performance of either index and also the risk of not receiving any monthly coupons after the first 5 years.

Maturity:
15 years
Monthly coupon:
Years 1-5: On all coupon payment dates through May 2018, a fixed coupon at an annual rate
of 7.10% (corresponding to approximately $5.9167 per month per security) is paid monthly.

Years 6-15: Beginning with the June 2018 coupon payment date, a contingent coupon at an
annual rate of 7.10% (corresponding to approximately $5.9167 per month per security) is
paid monthly but only if the closing value of each underlying index is at or above its
respective barrier level on the related observation date.

If, on any observation date in years 6-15, the closing value of either underlying index
is less than the barrier level for such index, we will pay no coupon for the applicable
interest period. It is possible that one or both underlying indices will remain below the
respective barrier level(s) for extended periods of time or even throughout years 6-15
so that you will receive few or no contingent monthly coupons during that period.
Payment at maturity:
If the final index value of each underlying index is greater than or equal to its respective
barrier level: the stated principal amount and the contingent monthly coupon with respect to
the final observation date.

If the final index value of either underlying index is less than its respective barrier level: (i)
the stated principal amount multiplied by (i ) the index performance factor of the worst
performing underlying index. This amount wil be less than 50% of the stated principal amount
of the securities and could be zero.

Morgan Stanley clients may contact their local Morgan Stanley branch office or our principal executive offices at 1585 Broadway, New York, New York
10036 (telephone number (866) 477-4776). Al other clients may contact their local brokerage representative. Third-party distributors may contact
Morgan Stanley Structured Investment Sales at (800) 233-1087.

May 2013
Page 3

4 of 28
5/29/2013 4:07 PM

http://www.sec.gov/Archives/edgar/data/895421/000095010313003268/...

Contingent Income Securities due May 30, 2028
Payments on the Securities Based on the Worst Performing of the Russell 2000® Index and the S&P 500® Index

Key Investment Rationale

The securities provide for fixed monthly coupon payments at the rate specified herein for the first 5 years. Thereafter, the securities do not provide for the
regular payment of interest and instead wil pay a contingent monthly coupon but only if the index closing value of each underlying index is at or above
50% of its initial index value, which we refer to as the barrier level, on the related observation date. These securities are for investors who are wil ing to
risk their principal and seek an opportunity to earn interest at a potential y above-market rate in exchange for the risk of receiving no monthly interest after
the first 5 years if either underlying index closes below the barrier level for such index on the observation dates. The fol owing scenarios are for il ustration
purposes only to demonstrate how the payment at maturity and monthly coupon is calculated, and do not attempt to demonstrate every situation that may
occur. Accordingly, the contingent monthly coupon may be payable with respect to none of, or some but not al of, the monthly periods during years 6-15,
and the payment at maturity may be less than 50% of the stated principal amount and could be zero.

Scenario 1: A contingent monthly
This scenario assumes that during years 6-15, each underlying index closes at or above its respective barrier
coupon is paid for al interest periods,
level on every monthly observation date. Investors receive the 7.10% per annum contingent monthly coupon
and investors receive principal back at
for each interest period during the term of the securities. At maturity, each underlying index closes above its
maturity, which is the best case
respective barrier level, and so investors receive the stated principal amount and the contingent monthly
scenario.
coupon with respect to the final observation date.
Scenario 2: A contingent monthly
This scenario assumes that each underlying index closes at or above its respective barrier level on some
coupon is paid for some, but not al ,
monthly observation dates after the first 5 years, but one or both underlying indices close below the respective
interest periods, and investors receive
barrier level(s) for such index on the others. Investors receive the fixed monthly coupon for the monthly
principal back at maturity.
interest periods during the first 5 years. Investors wil receive the contingent monthly coupon for the monthly
interest periods during years 6-15 for which the index closing value of each underlying index is at or above its
respective barrier level on the related observation date, but not for the interest periods for which one or both
underlying indices close below the respective barrier level(s) on the related observation date. At maturity,
each underlying index closes above its respective barrier level, and so investors receive the stated principal
amount and the contingent monthly coupon with respect to the final observation date.
Scenario 3 : No contingent monthly
This scenario assumes that one or both underlying indices close below the respective barrier level(s) on every
coupon is paid for any interest period
monthly observation date during years 6-15. Since one or both underlying indices close below the respective
during years 6-15, and investors
barrier level(s) on every monthly observation date during years 6-15, investors do not receive any contingent
suffer a substantial loss of principal at
monthly coupon during this period. On the final observation date, one or both underlying indices close below
maturity.
the respective barrier level(s). At maturity, investors wil receive an amount equal to the stated principal
amount multiplied by the index performance factor of the worst performing underlying index, which wil be less
than 50% of the stated principal amount and could be zero.

May 2013
Page 4

5 of 28
5/29/2013 4:07 PM

http://www.sec.gov/Archives/edgar/data/895421/000095010313003268/...

Contingent Income Securities due May 30, 2028
Payments on the Securities Based on the Worst Performing of the Russell 2000® Index and the S&P 500® Index

Underlying Indices Summary

Russell 2000® Index

The Russel 2000® Index is an index calculated, published and disseminated by Russel Investments, and measures the composite price performance of
stocks of 2,000 companies (the "Russel 2000 Component Stocks") incorporated in the U.S. and its territories. Al 2,000 stocks are traded on a major
U.S. exchange and are the 2,000 smallest securities that form the Russell 3000® Index. The Russel 3000® Index is composed of the 3,000 largest U.S.
companies as determined by market capitalization and represents approximately 98% of the U.S. equity market. The Russel 2000® Index consists of the
smal est 2,000 companies included in the Russell 3000® Index and represents a smal portion of the total market capitalization of the Russel 3000®
Index. The Russel 2000® Index is designed to track the performance of the smal capitalization segment of the U.S. equity market.

Information as of market close on May 24, 2013:

Bloomberg Ticker Symbol:
RTY
Current Index Value:
984.28
52 Weeks Ago:
766.57
52 Week High (on 5/21/2013):
998.78
52 Week Low (on 6/4/2012):
737.24

For additional information about the Russel 2000® Index, see the information set forth under "Russel 2000® Index" in the accompanying index
supplement. Furthermore, for additional historical information, see "Russel 2000® Index Historical Performance" below.

S&P 500® Index

The S&P 500® Index, which is calculated, maintained and published by S&P, consists of 500 component stocks selected to provide a performance
benchmark for the U.S. equity markets. The calculation of the S&P 500® Index is based on the relative value of the float adjusted aggregate market
capitalization of the 500 component companies as of a particular time as compared to the aggregate average market capitalization of 500 similar
companies during the base period of the years 1941 through 1943.

Information as of market close on May 24, 2013:

Bloomberg Ticker Symbol:
SPX
Current Index Value:
1,649.60
52 Weeks Ago:
1,320.68
52 Week High (on 5/21/2013):
1,669.16
52 Week Low (on 6/1/2012):
1,278.04

For additional information about the S&P 500® Index, see the information set forth under "S&P 500® Index" in the accompanying index
supplement. Furthermore, for additional historical information, see "S&P 500® Index Historical Performance" below.

May 2013
Page 5

6 of 28
5/29/2013 4:07 PM

http://www.sec.gov/Archives/edgar/data/895421/000095010313003268/...

Contingent Income Securities due May 30, 2028
Payments on the Securities Based on the Worst Performing of the Russell 2000® Index and the S&P 500® Index

Hypothetical Examples

The fol owing hypothetical examples il ustrate how to determine whether a contingent monthly coupon is paid with respect to an observation date and how
to calculate the payment at maturity. The fol owing examples are for il ustrative purposes only. For the first 5 years, you will receive a fixed monthly
coupon at a rate of 7.10% per annum regardless of the performance of the underlying indices. Whether you receive a contingent monthly coupon after the
first 5 years wil be determined by reference to the index closing value of each underlying index on each monthly observation date, and the amount you wil
receive at maturity, if any, wil be determined by reference to the final index value of each underlying index on the final observation date. The actual initial
index value and barrier level for each underlying index are set forth on the cover of this document. Al payments on the securities, if any, are subject to the
credit risk of Morgan Stanley. The below examples are based on the fol owing terms:

Monthly Coupon:
Years 1-5: On al coupon payment dates through May 2018, a fixed coupon at an annual rate of 7.10%
(corresponding to approximately $5.9167 per month per security) is paid monthly.

Years 6-15: Beginning with the June 2018 coupon payment date, a contingent coupon at an annual rate of 7.10%
(corresponding to approximately $5.9167 per month per security) is paid monthly but only if the closing value of
each underlying index is at or above its respective barrier level on the related observation date.

If, on any observation date in years 6-15, the closing value of either underlying index is less than the
barrier level for such index, we will pay no coupon for the applicable interest period. It is possible that
one or both underlying indices will remain below the respective barrier level(s) for extended periods of
time or even throughout years 6-15 so that you will receive few or no contingent monthly coupons
during that period.
Payment at Maturity
If the final index value of each underlying index is greater than or equal to its respective barrier level: the stated
principal amount and the contingent monthly coupon with respect to the final observation date.

If the final index value of either underlying index is less than its respective barrier level: (i) the stated principal
amount multiplied by (i ) the index performance factor of the worst performing underlying index. This amount wil
be less than 50% of the stated principal amount of the securities and could be zero.
Stated Principal Amount:
$1,000
Hypothetical Initial Index Value:
With respect to the RTY Index: 900
With respect to the SPX Index: 1,600
Hypothetical Barrier Level:
With respect to the RTY Index: 450, which is 50% of the hypothetical initial index value for such index
With respect to the SPX Index: 800, which is 50% of the hypothetical initial index value for such index

How to determine whether a contingent monthly coupon is payable with respect to an observation date during years 6-15:

Closing Value
Contingent Monthly Coupon

RTY Index
SPX Index

Hypothetical Observation Date 1
650 (at or above barrier
1,200 (at or above barrier level)
$5.9167
level)
Hypothetical Observation Date 2
700 (at or above barrier
650 (below barrier level)
$0
level)
Hypothetical Observation Date 3
400 (below barrier level)
950 (at or above barrier level)
$0
Hypothetical Observation Date 4
350 (below barrier level)
700 (below barrier level)
$0

May 2013
Page 6

7 of 28
5/29/2013 4:07 PM

http://www.sec.gov/Archives/edgar/data/895421/000095010313003268/...

Contingent Income Securities due May 30, 2028
Payments on the Securities Based on the Worst Performing of the Russell 2000® Index and the S&P 500® Index

On hypothetical observation date 1, both the RTY Index and SPX Index close at or above their respective barrier levels. Therefore a contingent monthly
coupon of approximately $5.9167 is paid on the relevant coupon payment date.

On each of the hypothetical observation dates 2 and 3, one underlying index closes at or above its barrier level but the other underlying index closes below
its barrier level. Therefore, no contingent monthly coupon is paid on the relevant coupon payment date.

On hypothetical observation date 4, each underlying index closes below its respective barrier level and accordingly no contingent monthly coupon is paid
on the relevant coupon payment date.

Beginning after 5 years, you will not receive a contingent monthly coupon on any coupon payment date if the closing value of either
underlying index is below its respective barrier level on the related observation date.

How to calculate the payment at maturity:

Index Closing Value
Payment at Maturity

RTY Index
SPX Index

Example 1:
1,500 (at or above the barrier level) 2,000 (at or above the barrier $1,005.9167 (the stated principal amount plus
level)
the contingent monthly coupon with respect to
the final observation date)

Example 2:
1,200 (at or above the barrier level)
640 (below the barrier level)
$1,000 x index performance factor of the
worst performing underlying index = $1,000 x
(640 / 1,600) = $400

Example 3:
360 (below the barrier level)
1,500 (at or above the barrier
$1,000 x (360 / 900) = $400
level)

Example 4:
270 (below the barrier level)
640 (below the barrier level)
$1,000 x (270 / 900) = $300

Example 5:
360 (below the barrier level)
480 (below the barrier level)
$1,000 x (480 / 1,600) = $300

In example 1, the final index values of both the RTY Index and SPX Index are at or above their respective barrier levels. Therefore, investors receive at
maturity the stated principal amount of the securities and the contingent monthly coupon with respect to the final observation date.

In examples 2 and 3, the final index value of one underlying index is at or above its barrier level but the final index value of the other underlying index is
below its barrier level. Therefore, investors are exposed to the downside performance of the worst performing underlying index at maturity and receive at
maturity an amount equal to the stated principal amount times the index performance factor of the worst performing underlying index.

Similarly, in examples 4 and 5, the final index value of each underlying index is below its respective barrier level, and investors receive at maturity an
amount equal to the stated principal amount times the index performance factor of the worst performing underlying index. In example 4, the RTY Index
have declined 70% from its initial index value to its final index value, while the SPX Index has declined 60% from its initial index value to its final index value.
Therefore, the payment at maturity equals the stated principal amount times the index performance factor of the RTY Index, which is the worst performing
underlying index in this example. In example 5, the RTY Index has declined 60% from its initial index value, while the SPX Index has declined 70% from its
initial index value to its final index value. Therefore the payment at maturity equals the stated principal amount times the index performance factor of the
SPX Index, which is the worst performing underlying index in this example.

If the final index value of EITHER underlying index is below its respective barrier level, you will be exposed to the downside performance of the
worst performing underlying index at maturity, and your payment at maturity will be less than $500 per security and could be zero.
May 2013
Page 7

8 of 28
5/29/2013 4:07 PM

http://www.sec.gov/Archives/edgar/data/895421/000095010313003268/...

Contingent Income Securities due May 30, 2028
Payments on the Securities Based on the Worst Performing of the Russell 2000® Index and the S&P 500® Index

Risk Factors

The following is a non-exhaustive list of certain key risk factors for investors in the securities. For further discussion of these and other risks, you
should read the section entitled "Risk Factors" in the accompanying prospectus supplement, index supplement and prospectus. We also urge you to
consult with your investment, legal, tax, accounting and other advisers before you invest in the securities.

§
The securities do not guarantee the return of any principal. The terms of the securities differ from those of ordinary debt securities in that they
do not guarantee the repayment of principal. If the final index value of either underlying index is less than its barrier level of 50% of its initial index
value, you wil be exposed to the decline in the closing value of the worst performing underlying index, as compared to its initial index value, on a 1 to 1
basis, and you wil receive for each security that you hold at maturity an amount equal to the stated principal amount times the index performance
factor of the worst performing underlying index. In this case, the payment at maturity wil be less than 50% of the stated principal amount and could
be zero.

§
You are exposed to the price risk of both underlying indices, with respect to both the contingent monthly coupons after the first 5 years, if
any, and the payment at maturity, if any. Your return on the securities it not linked to a basket consisting of both underlying indices. Rather, it wil
be contingent upon the independent performance of each underlying index. Unlike an instrument with a return linked to a basket of underlying assets in
which risk is mitigated and diversified among al the components of the basket, you wil be exposed to the risks related to both underlying
indices. Poor performance by either underlying index over the term of the securities may negatively affect your return and wil not be offset or
mitigated by any positive performance by the other underlying index. To receive any contingent monthly coupons after the first 5 years, each
underlying index must close at or above its respective barrier level on the applicable observation date. In addition, if either underlying index has
declined to below its respective barrier level as of the final observation date, you wil be fully exposed to the decline in the worst performing
underlying index over the term of the securities on a 1 to 1 basis, even if the other underlying index has appreciated or not declined as much. Under
this scenario, the value of any such payment wil be less than 50% of the stated principal amount and could be zero. Accordingly, your investment is
subject to the price risk of both underlying indices.

§
Because the securities are linked to the performance of the worst performing underlying index, you are exposed to greater risks of no
contingent monthly coupons and sustaining a significant loss on your investment than if the securities were linked to just one index. The
risk that you wil not receive any contingent monthly coupons after the first 5 years, or that you wil suffer a significant loss on your investment, is
greater if you invest in the securities as opposed to substantial y similar securities that are linked to just the performance of one underlying index. With
two underlying indices, it is more likely that either underlying index wil close below its barrier level on any observation date than if the securities were
linked to only one underlying index, and therefore it is more likely that you wil not receive any contingent monthly coupons and that you wil suffer a
significant loss on your investment.

§
After the first 5 years, the securities do not provide for regular interest payments. The terms of the securities differ from those of ordinary
debt securities in that they do not provide for the regular payment of interest after the first 5 years. For the first 5 years, the securities wil pay a fixed
monthly coupon at the rate specified herein. Thereafter, the securities wil pay a contingent monthly coupon only if the index closing value of each
underlying index is at or above 50% of its respective initial index value, which we refer to as the barrier level, on the related observation date. If, on
the other hand, the index closing value of either underlying index is lower than the barrier level for such index on the relevant observation date for any
interest period during years 6-15, we wil pay no coupon on the applicable coupon payment date. It is possible that the index closing value of one or
both underlying indices wil remain below the respective barrier level(s) for extended periods of time or even throughout years 6-15 so that you wil
receive few or no contingent monthly coupons during that period. If you do not earn sufficient contingent monthly coupons over the term of the
securities, the overal return on the securities may be less than the amount that would be paid on a conventional debt security of the issuer of
comparable maturity.

§
The contingent monthly coupon, if any, is based only on the value of each underlying index on the related monthly observation date at the
end of the related interest period. Whether the contingent monthly coupon wil be paid on any coupon payment date during years 6-15 wil be
determined at the end of the relevant interest period, based on the closing value of each underlying index on the relevant monthly observation
date. As a result, you wil not know whether you wil

May 2013
Page 8

9 of 28
5/29/2013 4:07 PM

http://www.sec.gov/Archives/edgar/data/895421/000095010313003268/...

Contingent Income Securities due May 30, 2028
Payments on the Securities Based on the Worst Performing of the Russell 2000® Index and the S&P 500® Index

receive the contingent monthly coupon on any coupon payment date until near the end of the relevant interest period. Moreover, because the
contingent monthly coupon is based solely on the value of each underlying index on monthly observation dates, if the closing value of either underlying
index on any observation date is below the barrier level for such index, you wil receive no coupon for the related interest period even if the level of
such underlying index was at or above its respective barrier level on other days during that interest period and even if the closing value of the other
underlying index is at or above the barrier level for such index.

§
Investors will not participate in any appreciation in either underlying index. Investors wil not participate in any appreciation in either underlying
index from the initial index value for such index, and the return on the securities wil be limited to the fixed monthly coupons, and the contingent monthly
coupons, if any, that are paid with respect to each observation date during years 6-15 on which the index closing value of each underlying index is
greater than or equal to its respective barrier level.

§
The securities are linked to the Russell 2000® Index and are subject to risks associated with small-capitalization companies. As the Russel
2000® Index is one of the underlying indices, and the Russel 2000® Index consists of stocks issued by companies with relatively smal market
capitalization, the securities are linked to the value of small-capitalization companies. These companies often have greater stock price volatility, lower
trading volume and less liquidity than large-capitalization companies and therefore the underlying index may be more volatile than that of indices that
consist of stocks issued by large-capitalization companies. Stock prices of small-capitalization companies are also more vulnerable than those of
large-capitalization companies to adverse business and economic developments, and the stocks of small-capitalization companies may be thinly
traded. In addition, small capitalization companies are typically less well-established and less stable financially than large-capitalization companies
and may depend on a small number of key personnel, making them more vulnerable to loss of personnel. Such companies tend to have smal er
revenues, less diverse product lines, smal er shares of their product or service markets, fewer financial resources and less competitive strengths than
large-capitalization companies and are more susceptible to adverse developments related to their products.

§
The market price will be influenced by many unpredictable factors. Several factors, many of which are beyond our control, wil influence the
value of the securities in the secondary market and the price at which MS & Co. may be wil ing to purchase or sel the securities in the secondary
market. We expect that general y the level of interest rates available in the market and the value of each underlying index on any day, including in
relation to its respective barrier level, wil affect the value of the securities more than any other factors. Other factors that may influence the value of
the securities include:

o
the volatility (frequency and magnitude of changes in value) of the underlying indices,

o
whether the index closing value of either underlying index has been below its respective barrier level on any observation date,

o
geopolitical conditions and economic, financial, political, regulatory or judicial events that affect the component stocks of the underlying
indices or securities markets generally and which may affect the value of each underlying index,

o
dividend rates on the securities underlying the underlying indices,

o
the time remaining until the securities mature,

o
interest and yield rates in the market,

o
the availability of comparable instruments,

o
the composition of the underlying indices and changes in the constituent stocks of such indices, and

o
any actual or anticipated changes in our credit ratings or credit spreads.

Some or al of these factors wil influence the price that you wil receive if you sel your securities prior to maturity. General y, the longer the time
remaining to maturity, the more the market price of the securities wil be affected by the other factors described above. In particular, if either
underlying index has closed near or below the barrier level for such index, the market value of the securities is expected to decrease substantial y and
you may have to sel your securities at a substantial discount from the stated principal amount of $1,000 per security.

May 2013
Page 9

10 of 28
5/29/2013 4:07 PM