Date of Notice: 3 July 2023

MORGAN STANLEY

(the "Issuer")

NOTICE TO ALL NOTEHOLDERS

Series 5608 USD 2,000,000 Floating Rate Notes due 2024
(ISIN: XS0741929391 Common Code: 074192939)

(the "Notes")

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF NOTEHOLDERS.

The Issuer hereby requests any custodian or nominee to forward this document promptly to the beneficial holder of the Notes on behalf of whom the Notes are being held.

Copies of this notice are available electronically on request to the Issuer at the address set out at the end of this notice.

Introduction

We have previously contacted you in relation to the London Interbank Offered Rate (LIBOR) transition to explain what it could mean for the Notes, to explain the transition options available, and to point out the risks associated with not taking action on or prior to 30 June 2023.

Application of Synthetic USD LIBOR to the Notes

Immediately after 30 June 2023, all remaining USD LIBOR settings either ceased or became no longer representative of the underlying market and economic reality that such setting is intended to measure. The overnight and 12-month settings of USD LIBOR have now permanently ceased, while the remaining 1-, 3- and 6-month settings have now become unrepresentative. The UK Financial Conduct Authority (the "FCA") has decided to require ICE Benchmark Administration Limited ("IBA"), the administrator of USD LIBOR, to continue to publish the three unrepresentative settings (1-, 3- and 6-month USD LIBOR) for a limited time after 30 June 2023 using an unrepresentative "synthetic" methodology ("Synthetic USD LIBOR").

As the Notes reference 3-month USD LIBOR, the Rate of Interest on the Notes for each interest determination date falling on or after 3 July 2023 will continue to be calculated by reference to the relevant setting of USD LIBOR but now in its Synthetic USD LIBOR form. 3-month Synthetic USD LIBOR is a forward-looking rate that is calculated as the sum of (i) the CME 3-month Term SOFR Reference Rate and (ii) the ISDA Spread Adjustment for 3-month USD LIBOR (such ISDA Spread Adjustment being 0.26161%).The FCA has made it clear that Synthetic USD LIBOR will likely only be available on a temporary basis until 30 September 2024 to help to facilitate an orderly wind-down and to protect market integrity by allowing more time for legacy transitions to be completed.

The final interest determination date for the Notes is scheduled to take place on or before 30 September 2024, and so it is expected that Synthetic USD LIBOR will apply to the Notes until their maturity.

Risk factors

Investors should be aware that:

·      given Synthetic USD LIBOR is based on CME Term SOFR, it has different characteristics compared to other alternative rates that you may prefer to transition to such as SOFR compounded in arrears. Unlike SOFR, which is an overnight rate published by the New York Federal Reserve and intended to be a broad measure of the cost of borrowing cash overnight (collateralised by U.S. Treasury securities) based on data from the overnight repo market in U.S Treasury securities, CME Term SOFR is a forward-looking rate based on prices in the interest rate derivatives market. As a result, there is no assurance that using Synthetic USD LIBOR, while it is available, will lead to better or worse economic returns for investors as compared with converting the notes to other alternative rates, such as SOFR compounded in arrears;

·         CME Term SOFR has a very short history and in any event, neither its current nor historical value should be taken as an indication of its future performance;

·          the manner of adoption of CME Term SOFR in the bond markets may differ materially compared with the adoption of CME Term SOFR in other markets such as loans and derivatives, and instruments referencing CME Term SOFR may severely lack market liquidity. As a result, it may be difficult and/or costly to unwind or hedge the risk in respect of notes referencing Synthetic USD LIBOR; and       

·         the methodology for Synthetic USD LIBOR is different to the methodology that was used to determine USD LIBOR up to 30 June 2023, meaning that they may not be economically equivalent, which may therefore result in contracts or instruments not performing in the same way as when they were linked to USD LIBOR and/or having lower secondary market liquidity.

For further information or if you have any questions on this notice, please contact your usual Morgan Stanley representative or using the following contact information:

Morgan Stanley

1585 Broadway

New York, New York 10036

United States of America

Attention:          Treasurer

Fax:                  + 1 212 762-0337

Disclaimer

To the fullest extent permitted by law, Morgan Stanley accepts no responsibility for, owes you no duties and shall have no liability for, any loss (including without limitation direct, indirect, consequential and loss of profit), damages or liability to you or to any third party (however arising) in light of the information set out in this communication, including but not limited to any such loss, damages or liability arising as a result of an IBOR rate (or a rate derived from an IBOR or any such successor, replacement or fallback rate) ceasing to be published or becoming unavailable, having its use restricted, being adjudged by a regulator to be non-representative of the market that it represents, ceasing to be in customary market usage, being calculated in a materially different way and/or ceasing to be appropriate for your product or arrangements with us and other related products or in relation to the transition of any such products from or to those rates to alternative or fallback rates.

This material is not intended to provide, and should not be relied on for, tax, legal, accounting, or regulatory advice. As you consider necessary, you should consult with your professional tax, legal, accounting and other advisors regarding compliance with applicable law and regulation.

MORGAN STANLEY