The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
EDGAR on the SEC web site at http://www.sec.gov. Alternatively, the issuer, any underwriter or any
dealer participating in the offering will arrange to send you the prospectus if you request it by
calling Morgan Stanley & Co. Incorporated toll-free at 1-866-718-1649 or by emailing
prospectus@morganstanley.com, or by calling Banc of America Securities LLC toll-free at
1-800-294-1322.
CREDIT RATINGS
The notes have been assigned a rating of “Baa3” with a stable outlook by Moody’s Investors Service,
Inc. (“Moody’s”), a rating of “BBB” by S&P, and a rating of “BBB” with a stable trend by DBRS
Limited (“DBRS”). S&P assigns an outlook to the issuer of securities and not to individual debt
instruments. S&P has assigned a negative outlook to Canadian Pacific Railway Company.
Credit ratings are intended to provide investors with an independent measure of credit quality of
any issue of securities and are indicators of the likelihood of payment and of the capacity of a
company to meet its financial commitment on the rated obligation in accordance with the terms of
the rated obligation. The credit ratings assigned to the notes by the rating agencies are not
recommendations to buy, sell or hold the notes and may be revised or withdrawn entirely at any time
by a rating agency. Credit ratings may not reflect the potential impact of all risks on the value
of the notes. In addition, real or anticipated changes in the rating assigned to the notes will
generally affect the market value of the notes. There can be no assurance that a rating will remain
in effect for a given period of time or that a rating will not be revised or withdrawn entirely by
a rating agency in the future.
Moody’s credit ratings are on a long term debt rating scale that ranges from Aaa to C, representing
the range from least credit risk to greatest credit risk of such securities rated. Moody’s applies
numerical modifiers 1, 2 and 3 in each generic rating classification from Aa through Caa in its
long term debt rating system. The modifier 1 indicates that the issue ranks in the higher end of
its generic rating category, the modifier 2 indicates a mid range ranking and the modifier 3
indicates that the issue ranks in the lower end of that generic rating category. According to the
Moody’s rating system, debt securities rated within the Baa category are subject to moderate credit
risk. They are considered medium-grade and as such, may possess certain speculative
characteristics.
S&P’s credit ratings are on a long term debt rating scale that ranges from AAA to D, representing
the range from highest to lowest quality of such securities rated. The ratings from AA to CCC may
be modified by the addition of a plus (+) or minus (–) sign to show relative standing within the
major rating categories. According to S&P’s rating system, debt securities rated BBB exhibit
adequate protection parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial commitments on the
obligations.
DBRS’ credit ratings are on a long-term debt rating scale that ranges from AAA to D, which
represents the range from highest to lowest quality of such securities rated. According to the DBRS
rating system, a debt security rated “BBB” is of adequate credit quality. Protection of interest
and principal is considered adequate, but the entity is fairly susceptible to adverse changes in
financial and economic conditions, or there may be other adverse conditions present which reduce
the strength of the entity and its rated debt securities. The assignment of a “(high)” or “(low)”
modifier within each rating category indicates relative standing within such category. The absence
of either a “high” or “low” designation indicates the rating is in the “middle” of the category.
The “high” and “low” grades are not used for the AAA category.
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