New York, June 23, 2026, 12:02 EDT
- Morgan Stanley Finance LLC gave pricing details for two principal-at-risk notes set for June 23, with a combined size near $139.4 million. The firm also put out early terms for a Nasdaq-100-tied note maturing in 2031.
- The securities pay either fixed or contingent returns, but payments depend on where equity indexes land and Morgan Stanley’s credit strength.
Morgan Stanley Finance LLC has set terms for new equity-linked structured notes. Two issues finalized for 2027 maturity, and a preliminary five-year Nasdaq-100 note were filed. Wall Street is still selling income-oriented products like these that may put client principal at risk.
The filings are in focus as two notes have a June 23 issue date and the third is being marketed before a June 30 pricing. This comes about a month after FINRA said it plans to review firm oversight of higher-risk structured products. The review targets non-principal-protected “worst-of” notes, where returns track the weakest asset in the group.
Structured notes are debt securities. Their payouts depend on a formula linked to reference assets like equity indexes. FINRA says these usually mix a bond and a derivative, and unlike mutual funds or ETFs, they do not hold the underlying portfolio.
Morgan Stanley’s biggest offering is a $138.6 million callable fixed-income note, maturing June 24, 2027. It’s tied to the weakest performer among the Nasdaq-100, Russell 2000, and S&P 500. The note pays a 10.2038% annual coupon, split in monthly payments. But according to the filing, investors could lose part or all of their principal if any of those indexes ends below 70% of where it started.
“Worst-performing” is important here. According to the filing, if any of the three indexes drops below the downside threshold, the note’s maturity payment will follow whichever index performed the worst, even if the others do better. Morgan Stanley could redeem the note as early as Dec. 24, 2026, if its valuation model finds it makes sense financially for the issuer.
Smaller deal comes in at $775,000, linked solely to the S&P 500. The note pays a 7.80% annual contingent coupon, with interest owed only if the index meets or beats a preset barrier on observation days. J.P. Morgan Securities LLC and JPMorgan Chase Bank, N.A. are named as placement agents, and both compete in structured products and wealth management.
S&P 500-linked note has both its coupon barrier and downside threshold set at 5,633.513, equal to 75% of the index’s 7,511.35 initial level. If the note isn’t called ahead of schedule and the index ends below that threshold, investors get their principal times the index performance factor. That can mean a steep loss.
Preliminary terms on the third filing cover buffered jump securities linked to the Nasdaq-100, maturing July 3, 2031. There’s no regular interest, and automatic redemption could start as early as July 1, 2027. The document left the total principal blank, so the deal size is still to be determined.
The Nasdaq-100 note has a 10% buffer. That means if the index drops, the first 10% gets absorbed before principal is hit. Upside is set by formula: stay to maturity and if the index is at or above the call threshold, holders get $1,477.50 for each $1,000 note. If the index drops below the buffer, payout is cut by formula, but won’t go below 10% of principal.
Pricing gaps stand out again. Morgan Stanley put the $1,000 securities at $987.60 for the biggest note and $985.00 on the S&P 500 note. The preliminary Nasdaq-100 note came in with an estimated value near $958.20, coming within $55 of that number. Filings show issue prices factor in costs tied to issuing, selling, structuring, and hedging the notes.
The risk with these products isn’t only about where the index goes. The SEC’s investor bulletin notes that structured notes are often tough to value, may have little liquidity, and are unsecured, so any payments hinge on the issuer’s financial condition. Morgan Stanley filings say these notes also won’t trade on any exchange.
Morgan Stanley’s filings point to regular, busy use of the Finance LLC shelf, converting equity-index exposure into coupon or payoff products aimed at brokerage customers. Investors are looking at a limited trade: they get higher income or set redemption in return for capping index gains and taking programmed losses if markets drop past certain levels.
