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[FWP] Bank of Nova Scotia Free Writing Prospectus

Filing Impact
(Low)
Filing Sentiment
(Neutral)
Form Type
FWP
Rhea-AI Filing Summary

The Bank of Nova Scotia (BNS) is marketing Accelerated Return Notes® (ARNs) linked to the common stock of Apple Inc. (AAPL) with a 14-month maturity (settlement expected July 2025 – September 2026). Each $10 note offers 300 % leveraged exposure to any positive price move in AAPL, but gains are capped at a 20 %–24 % total return (Capped Value $12.00–$12.40 per unit). If AAPL ends flat, principal is returned; if it declines, investors are exposed 1-for-1 to losses, up to total principal at risk.

Key structural terms

  • Issuer: The Bank of Nova Scotia, senior unsecured obligations.
  • Underlying: Apple Inc. common stock (NASDAQ: AAPL).
  • Participation Rate: 300 % on upside, subject to the cap.
  • Term: ≈ 14 months; calculation day is the 5th trading day before maturity.
  • Initial estimated value: $9.24–$9.54 per $10 unit, below the public offer price because of BNS’s lower internal funding rate, a $0.175 underwriting discount and a $0.05 hedging-related charge.
  • Minimum purchase size: 100 units; price concessions for ≥ 300,000 units lower the public price to $9.95 and discount to $0.125.
  • No periodic coupons, no dividend entitlement, limited or no secondary market; notes will not be listed on any exchange.

Risk highlights

  • Full downside exposure: any drop in AAPL below the starting value erodes principal dollar-for-dollar.
  • Credit risk: repayment depends on BNS’s ability to pay; the notes rank pari passu with other senior unsecured debt.
  • Valuation risk: initial estimated value below purchase price; secondary market bids (if any) expected to be at a discount due to dealer mark-ups, funding rate differential and market factors.
  • Liquidity risk: BofA Securities and Merrill Lynch are not obliged to make a market; investors may be unable to exit prior to maturity.
  • Tax uncertainty: U.S. federal tax treatment is uncertain; notes expected to be prepaid derivatives, but IRS guidance could differ.

The product may appeal to short-term tactical investors who expect a moderate rise in AAPL over the next year and can tolerate issuer credit risk, illiquidity and a hard upside cap. It is not designed for income seekers, long-term buy-and-hold equity investors, or those requiring principal protection.

La Bank of Nova Scotia (BNS) propone le Accelerated Return Notes® (ARNs) collegate alle azioni ordinarie di Apple Inc. (AAPL) con una scadenza di 14 mesi (liquidazione prevista tra luglio 2025 e settembre 2026). Ogni nota da 10$ offre un'esposizione a leva del 300% su qualsiasi aumento positivo del prezzo di AAPL, con guadagni però limitati a un rendimento totale del 20%–24% (Valore massimo $12,00–$12,40 per unità). Se AAPL termina stabile, il capitale viene restituito; in caso di ribasso, gli investitori subiscono perdite 1 a 1 fino al totale capitale a rischio.

Termini strutturali chiave

  • Emittente: Bank of Nova Scotia, obbligazioni senior non garantite.
  • Sottostante: azioni ordinarie Apple Inc. (NASDAQ: AAPL).
  • Tasso di partecipazione: 300% al rialzo, soggetto al limite massimo.
  • Durata: circa 14 mesi; il calcolo avviene il 5° giorno di negoziazione prima della scadenza.
  • Valore stimato iniziale: $9,24–$9,54 per unità da $10, inferiore al prezzo pubblico a causa del tasso di finanziamento interno più basso di BNS, di uno sconto di sottoscrizione di $0,175 e di una commissione di copertura di $0,05.
  • Dimensione minima d'acquisto: 100 unità; per acquisti ≥ 300.000 unità sono previste riduzioni di prezzo fino a $9,95 e uno sconto ridotto a $0,125.
  • Nessun coupon periodico, nessun diritto ai dividendi, mercato secondario limitato o assente; le note non saranno quotate in alcuna borsa.

Principali rischi

  • Esposizione totale al ribasso: ogni diminuzione di AAPL sotto il valore iniziale riduce il capitale in modo proporzionale.
  • Rischio di credito: il rimborso dipende dalla capacità di BNS di pagare; le note hanno pari rango con altri debiti senior non garantiti.
  • Rischio di valutazione: valore stimato iniziale inferiore al prezzo d'acquisto; i prezzi di mercato secondario (se presenti) saranno probabilmente scontati a causa di margini dei dealer, differenze di tasso di finanziamento e fattori di mercato.
  • Rischio di liquidità: BofA Securities e Merrill Lynch non sono obbligate a garantire un mercato; gli investitori potrebbero non riuscire a vendere prima della scadenza.
  • Incertezza fiscale: trattamento fiscale federale USA incerto; le note sono considerate derivati prepagati, ma le indicazioni dell'IRS potrebbero variare.

Il prodotto può interessare investitori tattici a breve termine che prevedono un aumento moderato di AAPL nel prossimo anno e che tollerano il rischio di credito dell'emittente, la scarsa liquidità e un limite rigido al guadagno massimo. Non è pensato per chi cerca reddito, investitori azionari a lungo termine o chi desidera protezione del capitale.

El Banco de Nueva Escocia (BNS) está ofreciendo Notas de Retorno Acelerado® (ARNs) vinculadas a las acciones comunes de Apple Inc. (AAPL) con un vencimiento de 14 meses (liquidación esperada entre julio 2025 y septiembre 2026). Cada nota de $10 ofrece una exposición apalancada del 300% a cualquier aumento positivo en el precio de AAPL, pero las ganancias están limitadas a un retorno total del 20%–24% (Valor máximo $12.00–$12.40 por unidad). Si AAPL termina sin cambio, se devuelve el principal; si baja, los inversores están expuestos 1 a 1 a pérdidas, hasta el total del principal en riesgo.

Términos estructurales clave

  • Emisor: Banco de Nueva Escocia, obligaciones senior no garantizadas.
  • Subyacente: acciones comunes de Apple Inc. (NASDAQ: AAPL).
  • Tasa de participación: 300% al alza, sujeto al límite.
  • Plazo: ≈ 14 meses; día de cálculo es el quinto día hábil antes del vencimiento.
  • Valor estimado inicial: $9.24–$9.54 por unidad de $10, por debajo del precio público debido a la tasa interna de financiación más baja de BNS, un descuento de suscripción de $0.175 y un cargo relacionado con cobertura de $0.05.
  • Tamaño mínimo de compra: 100 unidades; concesiones de precio para ≥ 300,000 unidades reducen el precio público a $9.95 y el descuento a $0.125.
  • No hay cupones periódicos, no hay derecho a dividendos, mercado secundario limitado o inexistente; las notas no estarán listadas en ninguna bolsa.

Aspectos destacados del riesgo

  • Exposición total a la baja: cualquier caída de AAPL por debajo del valor inicial erosiona el principal dólar a dólar.
  • Riesgo crediticio: el reembolso depende de la capacidad de pago de BNS; las notas tienen igual rango que otras deudas senior no garantizadas.
  • Riesgo de valoración: valor estimado inicial por debajo del precio de compra; las ofertas en el mercado secundario (si las hay) se esperan con descuento debido a márgenes de los distribuidores, diferencia en la tasa de financiación y factores de mercado.
  • Riesgo de liquidez: BofA Securities y Merrill Lynch no están obligados a mantener mercado; los inversores pueden no poder salir antes del vencimiento.
  • Incertidumbre fiscal: tratamiento fiscal federal estadounidense incierto; se espera que las notas sean derivados prepagados, pero la orientación del IRS podría variar.

El producto puede atraer a inversores tácticos a corto plazo que esperan un aumento moderado en AAPL durante el próximo año y pueden tolerar el riesgo crediticio del emisor, la iliquidez y un límite estricto en la ganancia máxima. No está diseñado para quienes buscan ingresos, inversores de renta variable a largo plazo o quienes requieren protección del principal.

노바스코샤 은행(BNS)은 애플 주식(AAPL)에 연계된 Accelerated Return Notes®(ARNs)를 14개월 만기(2025년 7월~2026년 9월 예상 결제)로 판매하고 있습니다. 각 $10 노트는 AAPL 주가 상승에 대해 300% 레버리지 노출을 제공하지만, 수익은 총 20%–24% 수익률로 제한됩니다(상한가 $12.00–$12.40 단위당). AAPL이 변동 없이 마감하면 원금이 반환되며, 하락 시 투자자는 원금 전액까지 1대1 손실에 노출됩니다.

주요 구조적 조건

  • 발행자: 노바스코샤 은행, 선순위 무담보 채무.
  • 기초자산: 애플 주식(NASDAQ: AAPL).
  • 참여율: 상방 300%, 상한 적용.
  • 기간: 약 14개월; 만기 5거래일 전 계산.
  • 초기 예상 가치: $10 단위당 $9.24–$9.54, BNS의 낮은 내부 자금 조달 금리, $0.175 인수 수수료, $0.05 헤지 비용으로 인해 공모가보다 낮음.
  • 최소 구매 단위: 100단위; 300,000단위 이상 구매 시 가격 인하로 공모가 $9.95, 할인 $0.125 적용.
  • 정기 쿠폰 없음, 배당 권리 없음, 제한적 또는 무시장성; 거래소 상장 안됨.

위험 요약

  • 전액 하락 노출: AAPL이 시작가 이하로 떨어지면 원금이 1대1로 감소.
  • 신용 위험: 상환은 BNS 지급 능력에 의존; 노트는 기타 선순위 무담보 채무와 동등한 순위.
  • 평가 위험: 초기 예상 가치가 구매가보다 낮음; 2차 시장 매수호가(있을 경우)는 딜러 마진, 자금 조달 금리 차이, 시장 요인으로 할인 예상.
  • 유동성 위험: BofA Securities와 Merrill Lynch는 시장 조성 의무 없음; 투자자는 만기 전 매도 어려울 수 있음.
  • 세금 불확실성: 미국 연방 세금 처리 불확실; 노트는 선지급 파생상품으로 예상되나 IRS 지침과 다를 수 있음.

이 상품은 향후 1년간 AAPL의 적당한 상승을 기대하며 발행자 신용 위험, 유동성 부족, 엄격한 상한 수익을 감내할 수 있는 단기 전술적 투자자에게 적합합니다. 소득 추구자, 장기 주식 투자자, 원금 보호가 필요한 투자자에게는 적합하지 않습니다.

La Banque de Nouvelle-Écosse (BNS) commercialise des Accelerated Return Notes® (ARNs) liées aux actions ordinaires d'Apple Inc. (AAPL) avec une maturité de 14 mois (règlement prévu entre juillet 2025 et septembre 2026). Chaque note de 10$ offre une exposition à effet de levier de 300% à toute hausse positive du cours d'AAPL, mais les gains sont plafonnés à un rendement total de 20 %–24 % (Valeur plafonnée de 12,00 $–12,40 $ par unité). Si AAPL termine stable, le principal est remboursé ; en cas de baisse, les investisseurs sont exposés 1 pour 1 aux pertes, jusqu'au principal total à risque.

Principaux termes structurels

  • Émetteur : Banque de Nouvelle-Écosse, obligations senior non garanties.
  • Sous-jacent : actions ordinaires Apple Inc. (NASDAQ : AAPL).
  • Taux de participation : 300 % à la hausse, soumis au plafond.
  • Durée : environ 14 mois ; jour de calcul le 5e jour de bourse avant échéance.
  • Valeur estimée initiale : 9,24 $–9,54 $ par unité de 10 $, inférieure au prix public en raison du taux de financement interne plus bas de BNS, d'une décote de souscription de 0,175 $ et d'une charge liée à la couverture de 0,05 $.
  • Taille minimale d'achat : 100 unités ; concessions tarifaires pour ≥ 300 000 unités abaissant le prix public à 9,95 $ et la décote à 0,125 $.
  • Pas de coupons périodiques, pas de droit aux dividendes, marché secondaire limité ou inexistant ; les notes ne seront pas cotées en bourse.

Points clés de risque

  • Exposition totale à la baisse : toute baisse d'AAPL sous la valeur initiale érode le principal dollar pour dollar.
  • Risque de crédit : le remboursement dépend de la capacité de paiement de BNS ; les notes sont au même rang que les autres dettes senior non garanties.
  • Risque d’évaluation : valeur estimée initiale inférieure au prix d'achat ; les offres sur le marché secondaire (le cas échéant) devraient être à un rabais en raison des marges des courtiers, des différences de taux de financement et des facteurs de marché.
  • Risque de liquidité : BofA Securities et Merrill Lynch ne sont pas obligés d’assurer un marché ; les investisseurs pourraient être incapables de sortir avant l’échéance.
  • Incertitude fiscale : traitement fiscal fédéral américain incertain ; les notes devraient être des dérivés prépayés, mais les directives de l’IRS pourraient différer.

Le produit peut intéresser les investisseurs tactiques à court terme qui anticipent une hausse modérée d'AAPL au cours de l'année à venir et peuvent tolérer le risque de crédit de l’émetteur, l’illiquidité et un plafond strict de gain. Il n’est pas destiné aux chercheurs de revenus, aux investisseurs actions à long terme ou à ceux qui exigent une protection du capital.

Die Bank of Nova Scotia (BNS) bietet Accelerated Return Notes® (ARNs) an, die an die Stammaktien von Apple Inc. (AAPL) gekoppelt sind und eine Laufzeit von 14 Monaten haben (Abwicklung voraussichtlich Juli 2025 – September 2026). Jede $10-Note bietet eine 300% gehebelte Beteiligung an positiven Kursbewegungen von AAPL, wobei die Gewinne auf eine Gesamtrendite von 20%–24% begrenzt sind (Deckelwert $12,00–$12,40 pro Einheit). Wenn AAPL unverändert schließt, wird das Kapital zurückgezahlt; bei Kursrückgang sind Anleger 1:1 Verlusten bis zum eingesetzten Kapital ausgesetzt.

Wesentliche strukturelle Bedingungen

  • Emittent: Bank of Nova Scotia, unbesicherte vorrangige Verbindlichkeiten.
  • Basiswert: Stammaktien von Apple Inc. (NASDAQ: AAPL).
  • Partizipationsrate: 300% am Aufwärtspotenzial, begrenzt durch die Obergrenze.
  • Laufzeit: ca. 14 Monate; Berechnungstag ist der 5. Handelstag vor Fälligkeit.
  • Geschätzter Anfangswert: $9,24–$9,54 pro $10-Einheit, unter dem öffentlichen Angebotspreis aufgrund des niedrigeren internen Finanzierungssatzes von BNS, eines Underwriting-Rabatts von $0,175 und einer Absicherungskostenpauschale von $0,05.
  • Mindestkaufgröße: 100 Einheiten; Preisnachlässe ab ≥ 300.000 Einheiten senken den öffentlichen Preis auf $9,95 und den Rabatt auf $0,125.
  • Keine periodischen Kupons, kein Dividendenanspruch, eingeschränkter oder kein Sekundärmarkt; die Notes werden an keiner Börse gelistet.

Risikohighlights

  • Volle Abwärtsrisiko: Jeder Kursrückgang von AAPL unter den Startwert verringert das Kapital eins zu eins.
  • Kreditrisiko: Rückzahlung hängt von der Zahlungsfähigkeit der BNS ab; die Notes stehen gleichrangig mit anderen unbesicherten vorrangigen Schulden.
  • Bewertungsrisiko: geschätzter Anfangswert unter dem Kaufpreis; Sekundärmarktgebote (sofern vorhanden) werden voraussichtlich mit Abschlag aufgrund von Händleraufschlägen, Finanzierungskostendifferenzen und Marktbedingungen gehandelt.
  • Liquiditätsrisiko: BofA Securities und Merrill Lynch sind nicht verpflichtet, einen Markt zu stellen; Anleger könnten vor Fälligkeit nicht aussteigen können.
  • Steuerliche Unsicherheit: US-Bundessteuerliche Behandlung unklar; die Notes werden voraussichtlich als vorab bezahlte Derivate behandelt, aber IRS-Richtlinien könnten abweichen.

Das Produkt könnte für kurzfristige taktische Anleger interessant sein, die innerhalb des nächsten Jahres einen moderaten Anstieg von AAPL erwarten und Emittenten-Kreditrisiko, Illiquidität sowie eine harte Gewinnobergrenze akzeptieren können. Es ist nicht für einkommensorientierte Anleger, langfristige Aktieninvestoren oder solche, die Kapitalschutz benötigen, geeignet.

Positive
  • 300 % participation on upside provides leveraged exposure with no margin requirements.
  • Short 14-month tenor can align with tactical views on Apple’s product cycle.
  • Large ticket purchasers (≥ 300,000 units) receive a $0.05 per unit price break, modestly improving economics.
Negative
  • Full principal at risk; 1-for-1 downside if AAPL falls below the starting value.
  • Upside capped at 20-24 %, limiting potential in a strong Apple rally.
  • Initial estimated value of $9.24–$9.54 indicates an immediate 4.6-7.6 % mark-to-model loss at purchase.
  • No secondary market obligation; investors may be forced to hold to maturity.
  • Payments depend on BNS creditworthiness; note is an unsecured claim with no FDIC/CDIC insurance.

Insights

TL;DR Cap limits upside to 20-24 %; full downside and credit risk depress risk-adjusted appeal.

From a structured-product perspective, these ARNs deliver 3× upside leverage yet remove dividends and impose a hard ceiling. Given Apple’s historical annualized volatility (~25 %) and dividend yield (~0.5 %), the cost of the cap appears high: investors forfeit all gains above ~7 % in AAPL. The $0.46-$0.76 premium (public price minus est. value) equates to 4.6-7.6 % negative carry at inception—significant for a 14-month note. Liquidity is thin and secondary prices will likely trend below model value as time decay and bid/ask widen. Unless an investor has a defined bullish view capped at ~7 % and accepts issuer risk, direct equity or listed options may offer cleaner exposure.

TL;DR Product piles market, liquidity and issuer credit risks on retail investors without compensatory yield.

BNS is rated high-A/AA- (varies by agency), but the note is senior unsecured; in a stress scenario, recovery could be materially below par. Because the note lacks collateral and bail-in protection, investors effectively lend to BNS at zero coupon while purchasing an embedded capped call option on AAPL. The structure embeds ~225 bp of implied funding advantage for the bank (internal funding rate vs. public credit curve) plus explicit fees, making it economically efficient for BNS, not the buyer. Overall impact is neutral-to-negative for BNS credit metrics (immaterial issuance size) but negative for note-holder risk-reward.

La Bank of Nova Scotia (BNS) propone le Accelerated Return Notes® (ARNs) collegate alle azioni ordinarie di Apple Inc. (AAPL) con una scadenza di 14 mesi (liquidazione prevista tra luglio 2025 e settembre 2026). Ogni nota da 10$ offre un'esposizione a leva del 300% su qualsiasi aumento positivo del prezzo di AAPL, con guadagni però limitati a un rendimento totale del 20%–24% (Valore massimo $12,00–$12,40 per unità). Se AAPL termina stabile, il capitale viene restituito; in caso di ribasso, gli investitori subiscono perdite 1 a 1 fino al totale capitale a rischio.

Termini strutturali chiave

  • Emittente: Bank of Nova Scotia, obbligazioni senior non garantite.
  • Sottostante: azioni ordinarie Apple Inc. (NASDAQ: AAPL).
  • Tasso di partecipazione: 300% al rialzo, soggetto al limite massimo.
  • Durata: circa 14 mesi; il calcolo avviene il 5° giorno di negoziazione prima della scadenza.
  • Valore stimato iniziale: $9,24–$9,54 per unità da $10, inferiore al prezzo pubblico a causa del tasso di finanziamento interno più basso di BNS, di uno sconto di sottoscrizione di $0,175 e di una commissione di copertura di $0,05.
  • Dimensione minima d'acquisto: 100 unità; per acquisti ≥ 300.000 unità sono previste riduzioni di prezzo fino a $9,95 e uno sconto ridotto a $0,125.
  • Nessun coupon periodico, nessun diritto ai dividendi, mercato secondario limitato o assente; le note non saranno quotate in alcuna borsa.

Principali rischi

  • Esposizione totale al ribasso: ogni diminuzione di AAPL sotto il valore iniziale riduce il capitale in modo proporzionale.
  • Rischio di credito: il rimborso dipende dalla capacità di BNS di pagare; le note hanno pari rango con altri debiti senior non garantiti.
  • Rischio di valutazione: valore stimato iniziale inferiore al prezzo d'acquisto; i prezzi di mercato secondario (se presenti) saranno probabilmente scontati a causa di margini dei dealer, differenze di tasso di finanziamento e fattori di mercato.
  • Rischio di liquidità: BofA Securities e Merrill Lynch non sono obbligate a garantire un mercato; gli investitori potrebbero non riuscire a vendere prima della scadenza.
  • Incertezza fiscale: trattamento fiscale federale USA incerto; le note sono considerate derivati prepagati, ma le indicazioni dell'IRS potrebbero variare.

Il prodotto può interessare investitori tattici a breve termine che prevedono un aumento moderato di AAPL nel prossimo anno e che tollerano il rischio di credito dell'emittente, la scarsa liquidità e un limite rigido al guadagno massimo. Non è pensato per chi cerca reddito, investitori azionari a lungo termine o chi desidera protezione del capitale.

El Banco de Nueva Escocia (BNS) está ofreciendo Notas de Retorno Acelerado® (ARNs) vinculadas a las acciones comunes de Apple Inc. (AAPL) con un vencimiento de 14 meses (liquidación esperada entre julio 2025 y septiembre 2026). Cada nota de $10 ofrece una exposición apalancada del 300% a cualquier aumento positivo en el precio de AAPL, pero las ganancias están limitadas a un retorno total del 20%–24% (Valor máximo $12.00–$12.40 por unidad). Si AAPL termina sin cambio, se devuelve el principal; si baja, los inversores están expuestos 1 a 1 a pérdidas, hasta el total del principal en riesgo.

Términos estructurales clave

  • Emisor: Banco de Nueva Escocia, obligaciones senior no garantizadas.
  • Subyacente: acciones comunes de Apple Inc. (NASDAQ: AAPL).
  • Tasa de participación: 300% al alza, sujeto al límite.
  • Plazo: ≈ 14 meses; día de cálculo es el quinto día hábil antes del vencimiento.
  • Valor estimado inicial: $9.24–$9.54 por unidad de $10, por debajo del precio público debido a la tasa interna de financiación más baja de BNS, un descuento de suscripción de $0.175 y un cargo relacionado con cobertura de $0.05.
  • Tamaño mínimo de compra: 100 unidades; concesiones de precio para ≥ 300,000 unidades reducen el precio público a $9.95 y el descuento a $0.125.
  • No hay cupones periódicos, no hay derecho a dividendos, mercado secundario limitado o inexistente; las notas no estarán listadas en ninguna bolsa.

Aspectos destacados del riesgo

  • Exposición total a la baja: cualquier caída de AAPL por debajo del valor inicial erosiona el principal dólar a dólar.
  • Riesgo crediticio: el reembolso depende de la capacidad de pago de BNS; las notas tienen igual rango que otras deudas senior no garantizadas.
  • Riesgo de valoración: valor estimado inicial por debajo del precio de compra; las ofertas en el mercado secundario (si las hay) se esperan con descuento debido a márgenes de los distribuidores, diferencia en la tasa de financiación y factores de mercado.
  • Riesgo de liquidez: BofA Securities y Merrill Lynch no están obligados a mantener mercado; los inversores pueden no poder salir antes del vencimiento.
  • Incertidumbre fiscal: tratamiento fiscal federal estadounidense incierto; se espera que las notas sean derivados prepagados, pero la orientación del IRS podría variar.

El producto puede atraer a inversores tácticos a corto plazo que esperan un aumento moderado en AAPL durante el próximo año y pueden tolerar el riesgo crediticio del emisor, la iliquidez y un límite estricto en la ganancia máxima. No está diseñado para quienes buscan ingresos, inversores de renta variable a largo plazo o quienes requieren protección del principal.

노바스코샤 은행(BNS)은 애플 주식(AAPL)에 연계된 Accelerated Return Notes®(ARNs)를 14개월 만기(2025년 7월~2026년 9월 예상 결제)로 판매하고 있습니다. 각 $10 노트는 AAPL 주가 상승에 대해 300% 레버리지 노출을 제공하지만, 수익은 총 20%–24% 수익률로 제한됩니다(상한가 $12.00–$12.40 단위당). AAPL이 변동 없이 마감하면 원금이 반환되며, 하락 시 투자자는 원금 전액까지 1대1 손실에 노출됩니다.

주요 구조적 조건

  • 발행자: 노바스코샤 은행, 선순위 무담보 채무.
  • 기초자산: 애플 주식(NASDAQ: AAPL).
  • 참여율: 상방 300%, 상한 적용.
  • 기간: 약 14개월; 만기 5거래일 전 계산.
  • 초기 예상 가치: $10 단위당 $9.24–$9.54, BNS의 낮은 내부 자금 조달 금리, $0.175 인수 수수료, $0.05 헤지 비용으로 인해 공모가보다 낮음.
  • 최소 구매 단위: 100단위; 300,000단위 이상 구매 시 가격 인하로 공모가 $9.95, 할인 $0.125 적용.
  • 정기 쿠폰 없음, 배당 권리 없음, 제한적 또는 무시장성; 거래소 상장 안됨.

위험 요약

  • 전액 하락 노출: AAPL이 시작가 이하로 떨어지면 원금이 1대1로 감소.
  • 신용 위험: 상환은 BNS 지급 능력에 의존; 노트는 기타 선순위 무담보 채무와 동등한 순위.
  • 평가 위험: 초기 예상 가치가 구매가보다 낮음; 2차 시장 매수호가(있을 경우)는 딜러 마진, 자금 조달 금리 차이, 시장 요인으로 할인 예상.
  • 유동성 위험: BofA Securities와 Merrill Lynch는 시장 조성 의무 없음; 투자자는 만기 전 매도 어려울 수 있음.
  • 세금 불확실성: 미국 연방 세금 처리 불확실; 노트는 선지급 파생상품으로 예상되나 IRS 지침과 다를 수 있음.

이 상품은 향후 1년간 AAPL의 적당한 상승을 기대하며 발행자 신용 위험, 유동성 부족, 엄격한 상한 수익을 감내할 수 있는 단기 전술적 투자자에게 적합합니다. 소득 추구자, 장기 주식 투자자, 원금 보호가 필요한 투자자에게는 적합하지 않습니다.

La Banque de Nouvelle-Écosse (BNS) commercialise des Accelerated Return Notes® (ARNs) liées aux actions ordinaires d'Apple Inc. (AAPL) avec une maturité de 14 mois (règlement prévu entre juillet 2025 et septembre 2026). Chaque note de 10$ offre une exposition à effet de levier de 300% à toute hausse positive du cours d'AAPL, mais les gains sont plafonnés à un rendement total de 20 %–24 % (Valeur plafonnée de 12,00 $–12,40 $ par unité). Si AAPL termine stable, le principal est remboursé ; en cas de baisse, les investisseurs sont exposés 1 pour 1 aux pertes, jusqu'au principal total à risque.

Principaux termes structurels

  • Émetteur : Banque de Nouvelle-Écosse, obligations senior non garanties.
  • Sous-jacent : actions ordinaires Apple Inc. (NASDAQ : AAPL).
  • Taux de participation : 300 % à la hausse, soumis au plafond.
  • Durée : environ 14 mois ; jour de calcul le 5e jour de bourse avant échéance.
  • Valeur estimée initiale : 9,24 $–9,54 $ par unité de 10 $, inférieure au prix public en raison du taux de financement interne plus bas de BNS, d'une décote de souscription de 0,175 $ et d'une charge liée à la couverture de 0,05 $.
  • Taille minimale d'achat : 100 unités ; concessions tarifaires pour ≥ 300 000 unités abaissant le prix public à 9,95 $ et la décote à 0,125 $.
  • Pas de coupons périodiques, pas de droit aux dividendes, marché secondaire limité ou inexistant ; les notes ne seront pas cotées en bourse.

Points clés de risque

  • Exposition totale à la baisse : toute baisse d'AAPL sous la valeur initiale érode le principal dollar pour dollar.
  • Risque de crédit : le remboursement dépend de la capacité de paiement de BNS ; les notes sont au même rang que les autres dettes senior non garanties.
  • Risque d’évaluation : valeur estimée initiale inférieure au prix d'achat ; les offres sur le marché secondaire (le cas échéant) devraient être à un rabais en raison des marges des courtiers, des différences de taux de financement et des facteurs de marché.
  • Risque de liquidité : BofA Securities et Merrill Lynch ne sont pas obligés d’assurer un marché ; les investisseurs pourraient être incapables de sortir avant l’échéance.
  • Incertitude fiscale : traitement fiscal fédéral américain incertain ; les notes devraient être des dérivés prépayés, mais les directives de l’IRS pourraient différer.

Le produit peut intéresser les investisseurs tactiques à court terme qui anticipent une hausse modérée d'AAPL au cours de l'année à venir et peuvent tolérer le risque de crédit de l’émetteur, l’illiquidité et un plafond strict de gain. Il n’est pas destiné aux chercheurs de revenus, aux investisseurs actions à long terme ou à ceux qui exigent une protection du capital.

Die Bank of Nova Scotia (BNS) bietet Accelerated Return Notes® (ARNs) an, die an die Stammaktien von Apple Inc. (AAPL) gekoppelt sind und eine Laufzeit von 14 Monaten haben (Abwicklung voraussichtlich Juli 2025 – September 2026). Jede $10-Note bietet eine 300% gehebelte Beteiligung an positiven Kursbewegungen von AAPL, wobei die Gewinne auf eine Gesamtrendite von 20%–24% begrenzt sind (Deckelwert $12,00–$12,40 pro Einheit). Wenn AAPL unverändert schließt, wird das Kapital zurückgezahlt; bei Kursrückgang sind Anleger 1:1 Verlusten bis zum eingesetzten Kapital ausgesetzt.

Wesentliche strukturelle Bedingungen

  • Emittent: Bank of Nova Scotia, unbesicherte vorrangige Verbindlichkeiten.
  • Basiswert: Stammaktien von Apple Inc. (NASDAQ: AAPL).
  • Partizipationsrate: 300% am Aufwärtspotenzial, begrenzt durch die Obergrenze.
  • Laufzeit: ca. 14 Monate; Berechnungstag ist der 5. Handelstag vor Fälligkeit.
  • Geschätzter Anfangswert: $9,24–$9,54 pro $10-Einheit, unter dem öffentlichen Angebotspreis aufgrund des niedrigeren internen Finanzierungssatzes von BNS, eines Underwriting-Rabatts von $0,175 und einer Absicherungskostenpauschale von $0,05.
  • Mindestkaufgröße: 100 Einheiten; Preisnachlässe ab ≥ 300.000 Einheiten senken den öffentlichen Preis auf $9,95 und den Rabatt auf $0,125.
  • Keine periodischen Kupons, kein Dividendenanspruch, eingeschränkter oder kein Sekundärmarkt; die Notes werden an keiner Börse gelistet.

Risikohighlights

  • Volle Abwärtsrisiko: Jeder Kursrückgang von AAPL unter den Startwert verringert das Kapital eins zu eins.
  • Kreditrisiko: Rückzahlung hängt von der Zahlungsfähigkeit der BNS ab; die Notes stehen gleichrangig mit anderen unbesicherten vorrangigen Schulden.
  • Bewertungsrisiko: geschätzter Anfangswert unter dem Kaufpreis; Sekundärmarktgebote (sofern vorhanden) werden voraussichtlich mit Abschlag aufgrund von Händleraufschlägen, Finanzierungskostendifferenzen und Marktbedingungen gehandelt.
  • Liquiditätsrisiko: BofA Securities und Merrill Lynch sind nicht verpflichtet, einen Markt zu stellen; Anleger könnten vor Fälligkeit nicht aussteigen können.
  • Steuerliche Unsicherheit: US-Bundessteuerliche Behandlung unklar; die Notes werden voraussichtlich als vorab bezahlte Derivate behandelt, aber IRS-Richtlinien könnten abweichen.

Das Produkt könnte für kurzfristige taktische Anleger interessant sein, die innerhalb des nächsten Jahres einen moderaten Anstieg von AAPL erwarten und Emittenten-Kreditrisiko, Illiquidität sowie eine harte Gewinnobergrenze akzeptieren können. Es ist nicht für einkommensorientierte Anleger, langfristige Aktieninvestoren oder solche, die Kapitalschutz benötigen, geeignet.

 

Subject to Completion

Preliminary Term Sheet

Dated July 8, 2025

Filed Pursuant to Rule 433
Registration Statement No. 333-282565
(To Prospectus dated November 8, 2024,
Prospectus Supplement dated November 8, 2024
and Product Supplement STOCK ARN-1 dated March 4, 2025)

 

Units
$10 principal amount per unit
CUSIP No.

Pricing Date*
Settlement Date*
Maturity Date*

July , 2025

July , 2025

September , 2026

*Subject to change based on the actual date the notes are priced for initial sale to the public (the “pricing date”)

 

 

 

 

Accelerated Return Notes® Linked to the Common Stock of Apple Inc.

Maturity of approximately 14 months

3-to-1 leveraged upside exposure to increases in the Underlying Stock, subject to a capped return of [20.00% to 24.00%]

1-to-1 downside exposure to decreases in the Underlying Stock, with up to 100.00% of your principal at risk

All payments occur at maturity and are subject to the credit risk of The Bank of Nova Scotia

No periodic interest payments

In addition to the underwriting discount set forth below, the notes include a hedging-related charge of $0.05 per unit. See “Structuring the Notes”

Limited secondary market liquidity, with no exchange listing

The notes are unsecured debt securities and are not savings accounts or insured deposits of a bank. The notes are not insured or guaranteed by the Canada Deposit Insurance Corporation (the “CDIC”), the U.S. Federal Deposit Insurance Corporation (the “FDIC”), or any other governmental agency of Canada, the United States or any other jurisdiction

 

The notes are being issued by The Bank of Nova Scotia (“BNS”). There are important differences between the notes and a conventional debt security, including different investment risks and certain additional costs. See “Risk Factors” beginning on page TS-6 of this term sheet and “Risk Factors” beginning on page PS-6 of product supplement STOCK ARN-1.

The initial estimated value of the notes as of the pricing date is expected to be between $9.24 and $9.54 per unit, which is less than the public offering price listed below. See “Summary” on the following page, “Risk Factors” beginning on page TS-6 of this term sheet and “Structuring the Notes” on page TS-11 of this term sheet for additional information. The actual value of your notes at any time will reflect many factors and cannot be predicted with accuracy.

_________________________

None of the U.S. Securities and Exchange Commission (the “SEC”), any state securities commission, or any other regulatory body has approved or disapproved of these securities or determined if this Note Prospectus (as defined below) is truthful or complete. Any representation to the contrary is a criminal offense.

_________________________

 

Per Unit

Total

Public offering price(1)

$ 10.000

$

Underwriting discount(1)

$ 0.175

$

Proceeds, before expenses, to BNS

$ 9.825

$

(1) For any purchase of 300,000 units or more in a single transaction by an individual investor or in combined transactions with the investor’s household in this offering, the public offering price and the underwriting discount will be $9.950 per unit and $0.125 per unit, respectively. See “Supplement to the Plan of Distribution” below.

The notes:

Are Not FDIC Insured

Are Not Bank Guaranteed

May Lose Value

BofA Securities

July , 2025

Accelerated Return Notes®

Linked to the Common Stock of Apple Inc. due September, 2026

 

Summary

The Accelerated Return Notes® Linked to the Common Stock of Apple Inc. due September, 2026 (the “notes”) are our senior unsecured debt securities. The notes are not guaranteed or insured by the CDIC or the FDIC, and are not, either directly or indirectly, an obligation of any third party. The notes are not bail-inable debt securities (as defined in the prospectus). The notes will rank equally with all of our other unsecured senior debt. Any payments due on the notes, including any repayment of principal, will be subject to the credit risk of BNS. The notes provide you a leveraged return, subject to a cap, if the Ending Value of the Market Measure, which is the common stock of Apple Inc. (the “Underlying Stock”), is greater than the Starting Value. If the Ending Value is equal to the Starting Value, you will receive the principal amount of your notes. If the Ending Value is less than the Starting Value, you will lose all or a portion of the principal amount of your notes. Any payments on the notes will be calculated based on the $10 principal amount per unit and will depend on the performance of the Underlying Stock, subject to our credit risk. See “Terms of the Notes” below.

The economic terms of the notes (including the Capped Value) are based on our internal funding rate, which is the rate we would pay to borrow funds through the issuance of market-linked notes, and the economic terms of certain related hedging arrangements. Our internal funding rate is typically lower than the rate we would pay when we issue conventional fixed rate debt securities. This difference in funding rate, as well as the underwriting discount and the hedging related charge described below, will reduce the economic terms of the notes to you and the initial estimated value of the notes on the pricing date. Due to these factors, the public offering price you pay to purchase the notes will be greater than the initial estimated value of the notes.

On the cover page of this term sheet, we have provided the initial estimated value range for the notes. This range of estimated values was determined by reference to our internal pricing models, which take into consideration certain factors, such as our internal funding rate on the pricing date and our assumptions about market parameters. For more information about the initial estimated value and the structuring of the notes, see “Structuring the Notes” on page TS-11.

Terms of the Notes

Redemption Amount Determination

Issuer:

The Bank of Nova Scotia (“BNS”)

On the maturity date, you will receive a cash payment per unit determined as follows:

Principal Amount:

$10.00 per unit

 

Term:

Approximately 14 months

Market Measure:

The common stock of Apple Inc. (the “Underlying Company”) (Nasdaq symbol: “AAPL”)

Starting Value:

The Closing Market Price of the Market Measure on the pricing date

Ending Value:

The Closing Market Price of the Market Measure on the calculation day multiplied by the Price Multiplier. The scheduled calculation day is subject to postponement in the event of Market Disruption Events, as described beginning on page PS-20 of product supplement STOCK ARN-1.

Participation Rate:

300.00%

Capped Value:

[$12.00 to $12.40] per unit, which represents a return of [20.00% to 24.00%] over the principal amount. The actual Capped Value will be determined on the pricing date.

Calculation Day:

The fifth scheduled trading day immediately preceding the maturity date.

Price Multiplier:

1, subject to adjustment for certain corporate events relating to the Underlying Stock, as described beginning on page PS-20 of product supplement STOCK ARN-1.

Fees and Charges:

The underwriting discount of $0.175 per unit listed on the cover page and the hedging related charge of $0.05 per unit described in “Structuring the Notes” on page TS-11.

Calculation Agent:

BofA Securities, Inc. (“BofAS”).

Accelerated Return Notes® TS-2

Accelerated Return Notes®

Linked to the Common Stock of Apple Inc. due September, 2026

 

The terms and risks of the notes are contained in this term sheet and in the following:

Product supplement STOCK ARN-1 dated March 4, 2025:
http://www.sec.gov/Archives/edgar/data/9631/000183988225013583/bns_424b2-05927.htm

Prospectus supplement dated November 8, 2024:
http://www.sec.gov/Archives/edgar/data/9631/000183988224038303/bns_424b3-21311.htm

Prospectus dated November 8, 2024:
http://www.sec.gov/Archives/edgar/data/9631/000119312524253771/d875135d424b3.htm

These documents (together, the “Note Prospectus”) have been filed as part of a registration statement with the SEC, which may, without cost, be accessed on the SEC website as indicated above or obtained from Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) or BofAS by calling 1-800-294-1322. Before you invest, you should read the Note Prospectus, including this term sheet, for information about us and this offering. Any prior or contemporaneous oral statements and any other written materials you may have received are superseded by the Note Prospectus. Capitalized terms used but not defined in this term sheet have the meanings set forth in product supplement STOCK ARN-1. Unless otherwise indicated or unless the context requires otherwise, all references in this document to “we,” “us,” “our,” or similar references are to BNS.

Investor Considerations

You may wish to consider an investment in the notes if:

The notes may not be an appropriate investment for you if:

You anticipate that the price of the Underlying Stock will increase moderately from the Starting Value to the Ending Value.

You are willing to risk a substantial or entire loss of principal if the price of the Underlying Stock decreases from the Starting Value to the Ending Value.

You accept that the return on the notes will be capped.

You are willing to forgo interest payments that are paid on conventional interest-bearing debt securities.

You are willing to forgo dividends or other benefits of owning the Underlying Stock.

You are willing to accept a limited or no market for sales prior to maturity, and understand that the market prices for the notes, if any, will be affected by various factors, including our actual and perceived creditworthiness, our internal funding rate and fees and charges on the notes.

You are willing to assume our credit risk, as issuer of the notes, for all payments under the notes, including the Redemption Amount.

You believe that the price of the Underlying Stock will decrease from the Starting Value to the Ending Value or that it will not increase sufficiently over the term of the notes to provide you with your desired return.

You seek principal repayment or preservation of capital.

You seek an uncapped return on your investment.

You seek interest payments or other current income on your investment.

You want to receive dividends or other distributions paid on the Underlying Stock.

You seek an investment for which there will be a liquid secondary market.

You are unwilling or are unable to take market risk on the notes or to take our credit risk as issuer of the notes.

We urge you to consult your investment, legal, tax, accounting, and other advisors concerning an investment in the notes.

Accelerated Return Notes® TS-3

Accelerated Return Notes®

Linked to the Common Stock of Apple Inc. due September, 2026

 

Hypothetical Payout Profile and Examples of Payments at Maturity

The graph below is based on hypothetical numbers and values.

Accelerated Return Notes®

This graph reflects the returns on the notes, based on the Participation Rate of 300.00% and a hypothetical Capped Value of $12.20 per unit (the midpoint of the Capped Value range of [$12.00 to $12.40] per unit). The green line reflects the returns on the notes, while the dotted gray line reflects the returns of a direct investment in the Underlying Stock, excluding dividends.

This graph has been prepared for purposes of illustration only.

The following table and examples are for purposes of illustration only. They are based on hypothetical values and show hypothetical returns on the notes. They illustrate the calculation of the Redemption Amount and total rate of return based on a hypothetical Starting Value of 100.00, the Participation Rate of 300.00%, a hypothetical Capped Value of $12.20 per unit and a range of hypothetical Ending Values. The actual amount you receive and the resulting total rate of return will depend on the actual Starting Value, Ending Value, Capped Value and whether you hold the notes to maturity. The following examples do not take into account any tax consequences from investing in the notes.

For recent actual prices of the Underlying Stock, see “The Underlying Stock” section below. The Ending Value will not include any income generated by dividends paid on the Underlying Stock, which you would otherwise be entitled to receive if you invested in the Underlying Stock directly. In addition, all payments on the notes are subject to issuer credit risk.

Ending Value

Percentage Change from the Starting Value to the Ending Value

Redemption Amount per Unit

Total Rate of Return on the Notes

0.00

-100.00%

$0.00

-100.00%

25.00

-75.00%

$2.50

-75.00%

50.00

-50.00%

$5.00

-50.00%

60.00

-40.00%

$6.00

-40.00%

70.00

-30.00%

$7.00

-30.00%

80.00

-20.00%

$8.00

-20.00%

90.00

-10.00%

$9.00

-10.00%

95.00

-5.00%

$9.50

-5.00%

100.00(1)

0.00%

$10.00

0.00%

102.00

2.00%

$10.60

6.00%

104.00

4.00%

$11.20

12.00%

106.00

6.00%

$11.80

18.00%

107.34

7.34%

$12.20(2)

22.00%

110.00

10.00%

$12.20

22.00%

120.00

20.00%

$12.20

22.00%

130.00

30.00%

$12.20

22.00%

140.00

40.00%

$12.20

22.00%

150.00

50.00%

$12.20

22.00%

(1)The hypothetical Starting Value of 100.00 used in these examples has been chosen for illustrative purposes only and does not represent a likely actual Starting Value of the Underlying Stock.

(2)The Redemption Amount per unit cannot exceed the hypothetical Capped Value.

Accelerated Return Notes® TS-4

Accelerated Return Notes®

Linked to the Common Stock of Apple Inc. due September, 2026

 

Redemption Amount Calculation Examples

Example 1

The Ending Value is 60.00, or 60.00% of the Starting Value:

Starting Value: 100.00

Ending Value: 60.00

= $6.00 Redemption Amount per unit

Example 2

The Ending Value is 102.00, or 102.00% of the Starting Value:

Starting Value: 100.00

Ending Value: 102.00

= $10.60 Redemption Amount per unit

Example 3

The Ending Value is 130.00, or 130.00% of the Starting Value:

Starting Value: 100.00

Ending Value: 130.00

= $19.00, however, because the Redemption Amount for the notes cannot exceed the Capped Value, the Redemption Amount will be $12.20 per unit

Accelerated Return Notes® TS-5

Accelerated Return Notes®

Linked to the Common Stock of Apple Inc. due September, 2026

 

Risk Factors

There are important differences between the notes and a conventional debt security. An investment in the notes involves significant risks, including those listed below. You should carefully review the more detailed explanation of risks relating to the notes in the “Risk Factors” sections beginning on page PS-6 of product supplement STOCK ARN-1, page S-2 of the prospectus supplement, and page 8 of the prospectus identified above. We also urge you to consult your investment, legal, tax, accounting, and other advisors concerning an investment in the notes.

Structure-Related Risks

Depending on the performance of the Underlying Stock as measured shortly before the maturity date, your investment may result in a loss; there is no guaranteed return of principal.

Your return on the notes may be less than the yield you could earn by owning a conventional fixed or floating rate debt security of comparable maturity.

Your investment return is limited to the return represented by the Capped Value and may be less than a comparable investment directly in the Underlying Stock.

Market Measure-Related Risks

The Underlying Company will have no obligations relating to the notes, and none of us, MLPF&S, BofAS or any of our respective affiliates will perform any due diligence procedures with respect to the Underlying Company in connection with this offering.

You will have no rights of a holder of the Underlying Stock, and you will not be entitled to receive the Underlying Stock or dividends or other distributions by the Underlying Company.

While we, MLPF&S, BofAS or our respective affiliates may from time to time own securities of the Underlying Company, we, MLPF&S, BofAS and our respective affiliates do not control the Underlying Company, and have not verified any disclosure made by the Underlying Company.

The Redemption Amount will not be adjusted for all corporate events that could affect the Underlying Stock. See “Description of ARNs—Anti-Dilution Adjustments” beginning on page PS-20 of product supplement STOCK ARN-1.

Valuation- and Market-Related Risks

Our initial estimated value of the notes will be lower than the public offering price of the notes. Our initial estimated value of the notes is only an estimate. The public offering price of the notes will exceed our initial estimated value because it includes costs associated with selling and structuring the notes, as well as hedging our obligations under the notes with a third party, which may include BofAS or one of its affiliates. These costs include the underwriting discount and an expected hedging related charge, as further described in “Structuring the Notes” on page TS-11.

Our initial estimated value of the notes does not represent future values of the notes and may differ from others’ estimates. Our initial estimated value of the notes is determined by reference to our internal pricing models when the terms of the notes are set. These pricing models consider certain factors, such as our internal funding rate on the pricing date, the expected term of the notes, market conditions and other relevant factors existing at that time, and our assumptions about market parameters, which can include volatility, dividend rates, interest rates and other factors. Different pricing models and assumptions could provide valuations for the notes that are different from our initial estimated value. In addition, market conditions and other relevant factors in the future may change, and any of our assumptions may prove to be incorrect. On future dates, the market value of the notes could change significantly based on, among other things, the performance of the Underlying Stock, changes in market conditions, our creditworthiness, interest rate movements and other relevant factors. These factors, together with various credit, market and economic factors over the term of the notes, are expected to reduce the price at which you may be able to sell the notes in any secondary market and will affect the value of the notes in complex and unpredictable ways. Our initial estimated value does not represent a minimum price at which we or any agents would be willing to buy your notes in any secondary market (if any exists) at any time.

Our initial estimated value is not determined by reference to credit spreads or the borrowing rate we would pay for our conventional fixed-rate debt securities. The internal funding rate used in the determination of our initial estimated value of the notes generally represents a discount from the credit spreads for our conventional fixed-rate debt securities and the borrowing rate we would pay for our conventional fixed-rate debt securities. If we were to use the interest rate implied by the credit spreads for our conventional fixed-rate debt securities, or the borrowing rate we would pay for our conventional fixed-rate debt securities, we would expect the economic terms of the notes to be more favorable to you. Consequently, our use of an internal funding rate for the notes would have an adverse effect on the economic terms of the notes, the initial estimated value of the notes on the pricing date, and the price at which you may be able to sell the notes in any secondary market.

A trading market is not expected to develop for the notes. None of us, MLPF&S or BofAS is obligated to make a market for, or to repurchase, the notes. There is no assurance that any party will be willing to purchase your notes at any price in any secondary market.

Conflict-Related Risks

Accelerated Return Notes® TS-6

Accelerated Return Notes®

Linked to the Common Stock of Apple Inc. due September, 2026

 

Our business, hedging and trading activities, and those of MLPF&S, BofAS and our and their respective affiliates (including trades in the Underlying Stock), and any hedging and trading activities we, MLPF&S, BofAS or our or their respective affiliates engage in for our clients’ accounts, may affect the market value of, and return on, the notes and may create conflicts of interest with you.

There may be potential conflicts of interest involving the calculation agent, which is BofAS. We have the right to appoint and remove the calculation agent.

General Credit-Related Risks

Payments on the notes are subject to our credit risk, and actual or perceived changes in our creditworthiness are expected to affect the value of the notes. If we become insolvent or are unable to pay our obligations, you may lose your entire investment.

Tax-Related Risks

The U.S. federal income tax consequences of the notes are uncertain, and may be adverse to a holder of the notes. See “Summary of U.S. Federal Income Tax Consequences” below.

The conclusion that no portion of the interest paid or credited or deemed to be paid or credited on a note will be “Participating Debt Interest” subject to Canadian withholding tax is based in part on the current published administrative position of the CRA. There cannot be any assurance that CRA’s current published administrative practice will not be subject to change, including potential expansion in the current administrative interpretation of Participating Debt Interest subject to Canadian withholding tax. If, at any time, the interest paid or credited or deemed to be paid or credited on a note is subject to Canadian withholding tax, you will receive an amount that is less than the Redemption Amount. You should consult your own adviser as to the potential for such withholding and the potential for reduction or refund of part or all of such withholding, including under any bilateral Canadian tax treaty the benefits of which you may be entitled. For a discussion of the Canadian federal income tax consequences of investing in the notes, see “Summary of Canadian Federal Income Tax Consequences” below, “Canadian Taxation—Debt Securities” on page 66 of the prospectus and “Supplemental Discussion of Canadian Federal Income Tax Consequences” on page PS-31 of product supplement STOCK ARN-1.

Accelerated Return Notes® TS-7

Accelerated Return Notes®

Linked to the Common Stock of Apple Inc. due September, 2026

 

The Underlying Stock

We have derived the following information from publicly available documents. We have not independently verified the accuracy or completeness of the following information. According to publicly available information, Apple Inc. (“Apple”) designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and sells a variety of related software, services, accessories, networking solutions, and third-party digital content and applications. Information filed by Apple with the SEC can be located by reference to its SEC file number: 001-36743, or its CIK Code: 0000320193. Apple’s common stock is listed on the Nasdaq Global Select Market under the ticker symbol “AAPL”.

Because the Underlying Stock is registered under the Securities Exchange Act of 1934, the Underlying Company is required to file periodically certain financial and other information specified by the SEC. Information provided to or filed with the SEC by the Underlying Company can be located through the SEC’s website at http://www.sec.gov by reference to SEC CIK number specified above.

This term sheet relates only to the notes and does not relate to the Underlying Stock or to any other securities of the Underlying Company. None of us, MLPF&S, BofAS or any of our respective affiliates has participated or will participate in the preparation of the Underlying Company’s publicly available documents. None of us, MLPF&S, BofAS or any of our respective affiliates has made any due diligence inquiry with respect to the Underlying Company in connection with the offering of the notes. None of us, MLPF&S, BofAS or any of our respective affiliates makes any representation that the publicly available documents or any other publicly available information regarding the Underlying Company are accurate or complete. Furthermore, there can be no assurance that all events occurring prior to the date of this term sheet, including events that would affect the accuracy or completeness of these publicly available documents that would affect the trading price of the Underlying Stock, have been or will be publicly disclosed. Subsequent disclosure of any events or the disclosure of or failure to disclose material future events concerning the Underlying Company could affect the price of the Underlying Stock and therefore could affect your return on the notes. The selection of the Underlying Stock is not a recommendation to buy or sell the Underlying Stock.

Accelerated Return Notes® TS-8

Accelerated Return Notes®

Linked to the Common Stock of Apple Inc. due September, 2026

 

Historical Data

The following graph shows the daily historical performance of the Underlying Stock on its primary exchange in the period from January 1, 2015 through July 2, 2025. We obtained this historical data from Bloomberg L.P. We have not independently verified the accuracy or completeness of the information obtained from Bloomberg L.P. On July 2, 2025, the Closing Market Price of the Underlying Stock was $212.44. The graph below may have been adjusted to reflect certain corporate actions such as stock splits and reverse stock splits.

Historical Performance of the Underlying Stock

This historical data on the Underlying Stock is not necessarily indicative of the future performance of the Underlying Stock or what the value of the notes may be. Any historical upward or downward trend in the price per share of the Underlying Stock during any period set forth above is not an indication that the price per share of the Underlying Stock is more or less likely to increase or decrease at any time over the term of the notes.

Before investing in the notes, you should consult publicly available sources for the prices and trading patterns of the Underlying Stock.

Accelerated Return Notes® TS-9

Accelerated Return Notes®

Linked to the Common Stock of Apple Inc. due September, 2026

 

Supplement to the Plan of Distribution

Under our distribution agreement with BofAS, BofAS will purchase the notes from us as principal at the public offering price indicated on the cover of this term sheet, less the indicated underwriting discount.

MLPF&S will purchase the notes from BofAS for resale, and will receive a selling concession in connection with the sale of the notes in an amount up to the full amount of the underwriting discount set forth on the cover of this term sheet.

We will pay a fee to LFT Securities, LLC for providing certain electronic platform services with respect to this offering, which will reduce the economic terms of the notes to you. An affiliate of BofAS has an ownership interest in LFT Securities, LLC.

We may deliver the notes against payment therefor in New York, New York on a date that is greater than one business day following the pricing date. Under Rule 15c6-1 of the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in one business day, unless the parties to any such trade expressly agree otherwise. Accordingly, if the initial settlement of the notes occurs more than one business day from the pricing date, purchasers who wish to trade the notes more than one business day prior to the settlement date will be required to specify alternative settlement arrangements to prevent a failed settlement.

The notes will not be listed on any securities exchange. In the original offering of the notes, the notes will be sold in minimum investment amounts of 100 units. If you place an order to purchase the notes, you are consenting to MLPF&S and/or one of its affiliates acting as a principal in effecting the transaction for your account.

MLPF&S and BofAS may repurchase and resell the notes, with repurchases and resales being made at prices related to then-prevailing market prices or at negotiated prices, and these prices will include MLPF&S’s and BofAS’s trading commissions and mark-ups or mark-downs. MLPF&S and BofAS may act as principal or agent in these market-making transactions; however, neither is obligated to engage in any such transactions. At their discretion, for a short, undetermined initial period after the issuance of the notes, MLPF&S and BofAS may offer to buy the notes in the secondary market at a price that may exceed the initial estimated value of the notes. Any price offered by MLPF&S or BofAS for the notes will be based on then-prevailing market conditions and other considerations, including the performance of the Underlying Stock and the remaining term of the notes. However, none of us, MLPF&S, BofAS or any of our respective affiliates is obligated to purchase your notes at any price or at any time, and we cannot assure you that we, MLPF&S, BofAS or any of our respective affiliates will purchase your notes at a price that equals or exceeds the initial estimated value of the notes.

The value of the notes shown on your account statement produced by MLPF&S will be based on BofAS’s estimate of the value of the notes if BofAS or another of its affiliates were to make a market in the notes, which it is not obligated to do. That estimate will be based upon the price that BofAS may pay for the notes in light of then-prevailing market conditions, and other considerations, as mentioned above, and will include transaction costs. At certain times, this price may be higher than or lower than the initial estimated value of the notes.

The distribution of the Note Prospectus in connection with these offers or sales will be solely for the purpose of providing investors with the description of the terms of the notes that was made available to investors in connection with their initial offering. Secondary market investors should not, and will not be authorized to, rely on the Note Prospectus for information regarding BNS or for any purpose other than that described in the immediately preceding sentence.

An investor’s household, as referenced on the cover of this term sheet, will generally include accounts held by any of the following, as determined by MLPF&S in its discretion and acting in good faith based upon information then available to MLPF&S:

the investor’s spouse (including a domestic partner), siblings, parents, grandparents, spouse’s parents, children and grandchildren, but excluding accounts held by aunts, uncles, cousins, nieces, nephews or any other family relationship not directly above or below the individual investor;

a family investment vehicle, including foundations, limited partnerships and personal holding companies, but only if the beneficial owners of the vehicle consist solely of the investor or members of the investor’s household as described above; and

a trust where the grantors and/or beneficiaries of the trust consist solely of the investor or members of the investor’s household as described above; provided that, purchases of the notes by a trust generally cannot be aggregated together with any purchases made by a trustee’s personal account.

Purchases in retirement accounts will not be considered part of the same household as an individual investor’s personal or other non-retirement account, except for individual retirement accounts (“IRAs”), simplified employee pension plans (“SEPs”), savings incentive match plan for employees (“SIMPLEs”), and single-participant or owners only accounts (i.e., retirement accounts held by self-employed individuals, business owners or partners with no employees other than their spouses).

Please contact your Merrill financial advisor if you have any questions about the application of these provisions to your specific circumstances or think you are eligible.

Accelerated Return Notes® TS-10

Accelerated Return Notes®

Linked to the Common Stock of Apple Inc. due September, 2026

 

Structuring the Notes

The notes are our unsecured senior debt securities, the return on which is linked to the performance of the Underlying Stock. As is the case for all of our debt securities, including our market-linked notes, the economic terms of the notes reflect our actual or perceived creditworthiness at the time of pricing. The internal funding rate we use in pricing the market-linked note is typically lower than the rate we would pay when we issue conventional fixed-rate debt securities of comparable maturity. This generally relatively lower internal funding rate, which is reflected in the economic terms of the notes, along with the fees and charges associated with market-linked notes, typically results in the initial estimated value of the notes on the pricing date being less than their public offering price.

At maturity, we are required to pay the Redemption Amount to holders of the notes, which will be calculated based on the performance of the Underlying Stock and the $10 per unit principal amount. In order to meet these payment obligations, at the time we issue the notes, we may choose to enter into certain hedging arrangements (which may include call options, put options or other derivatives) with BofAS or one of its affiliates. The terms of these hedging arrangements are determined by seeking bids from market participants, including MLPF&S, BofAS and its affiliates, and take into account a number of factors, including our creditworthiness, interest rate movements, the volatility of the Underlying Stock, the tenor of the notes and the tenor of the hedging arrangements. The economic terms of the notes and their initial estimated value depend in part on the terms of these hedging arrangements.

BofAS has advised us that the hedging arrangements will include a hedging related charge of approximately $0.05 per unit, reflecting an estimated profit to be credited to BofAS from these transactions. Since hedging entails risk and may be influenced by unpredictable market forces, additional profits and losses from these hedging arrangements may be realized by BofAS or any third party hedge providers.

For further information, see “Risk Factors — Conflict-Related Risks” beginning on page PS-12 and “Use of Proceeds and Hedging” on page PS-16 of product supplement STOCK ARN-1.

Accelerated Return Notes® TS-11

Accelerated Return Notes®

Linked to the Common Stock of Apple Inc. due September, 2026

 

Summary of Canadian Federal Income Tax Consequences

See “Supplemental Discussion of Canadian Federal Income Tax Consequences” in product supplement STOCK ARN-1. In addition to the assumptions, limitations and conditions described therein, such discussion assumes that no amount paid or payable to a Non-Resident Holder will be the deduction component of a “hybrid mismatch arrangement” under which the payment arises within the meaning of paragraph 18.4(3)(b) of the Act.

Summary of U.S. Federal Income Tax Consequences

The following is a general description of certain U.S. federal tax considerations relating to the notes. Prospective purchasers of the notes should consult their tax advisors as to the consequences under the tax laws of the country of which they are residents for tax purposes and the tax laws of the U.S. of acquiring, holding and disposing of the notes and receiving payments under the notes. This summary is based upon the law as in effect on the date of this document and is subject to any change in law that may take effect after such date. We urge you to read the more detailed discussion in the “Material U.S. Federal Income Tax Consequences” section beginning on page PS-32 of product supplement STOCK ARN-1.

No statutory, regulatory, judicial or administrative authority directly discusses how the notes should be treated for U.S. federal income tax purposes. As a result, the U.S. federal income tax consequences of your investment in the notes are uncertain. Accordingly, we urge you to consult your tax advisor as to the tax consequences of your investment in the notes (and of having agreed to the required tax treatment of your notes described below) and as to the application of state, local or other tax laws to your investment in your notes and the possible effects of changes in federal or other tax laws.

Pursuant to the terms of the notes, BNS and you agree, in the absence of a statutory or regulatory change or an administrative determination or judicial ruling to the contrary, to characterize your notes as prepaid derivative contracts with respect to the Underlying Stock. If your notes are so treated, you should generally recognize long-term capital gain or loss if you hold your notes for more than one year (and, otherwise, short-term capital gain or loss) upon the taxable disposition (including cash settlement) of your notes in an amount equal to the difference between the amount you receive at such time and the amount you paid for your notes. The deductibility of capital losses is subject to limitations.

Based on certain factual representations received from us, our special U.S. tax counsel, Fried, Frank, Harris, Shriver & Jacobson LLP, is of the opinion that it would be reasonable to treat your notes in the manner described above. However, because there is no authority that specifically addresses the tax treatment of the notes, it is possible that your notes could alternatively be treated for tax purposes as a single contingent payment debt instrument or pursuant to some other characterization, such that the timing and character of your income from the notes could differ materially and adversely from the treatment described above.

Notice 2008-2. In 2007, the Internal Revenue Service (the “IRS”) released a notice that may affect the taxation of holders of the notes. According to Notice 2008-2, the IRS and the U.S. Department of the Treasury (the “Treasury”) are considering whether a holder of an instrument such as the notes should be required to accrue ordinary income on a current basis. It is not possible to determine what guidance they will ultimately issue, if any. It is possible, however, that under such guidance, holders of the notes will ultimately be required to accrue income currently and this could be applied on a retroactive basis. According to the Notice, the IRS and the Treasury are also considering other relevant issues, including whether additional gain or loss from such instruments should be treated as ordinary or capital, whether non-U.S. holders of such instruments should be subject to withholding tax on any deemed income accruals, and whether the special “constructive ownership rules” of Section 1260 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), should be applied to such instruments. Both U.S. and non-U.S. holders are urged to consult their tax advisors concerning the significance, and the potential impact, of the above considerations.

Proposed Legislation. In 2007, legislation was introduced in Congress that, if it had been enacted, would have required holders of notes purchased after the bill was enacted to accrue interest income over the term of the notes despite the fact that there will be no interest payments over the term of the notes.

Furthermore, in 2013 the House Ways and Means Committee released in draft form certain proposed legislation relating to financial instruments. If it had been enacted, the effect of this legislation generally would have been to require instruments such as the notes to be marked to market on an annual basis with all gains and losses to be treated as ordinary, subject to certain exceptions.

It is impossible to predict what any such legislation or administrative or regulatory guidance might provide, and whether the effective date of any legislation or guidance will affect securities that were issued before the date that such legislation or guidance is issued. You are urged to consult your tax advisor as to the possibility that any legislative or administrative action may adversely affect the tax treatment of your notes.

Medicare Tax on Net Investment Income. U.S. holders that are individuals, estates or certain trusts are subject to an additional 3.8% tax on all or a portion of their “net investment income,” or “undistributed net investment income” in the case of an estate or trust, which may include any income or gain realized with respect to the notes, to the extent of their net investment income or undistributed net investment income (as the case may be) that, when added to their other modified adjusted gross income, exceeds $200,000 for an unmarried individual, $250,000 for a married taxpayer filing a joint return (or a surviving spouse), $125,000 for a married individual filing a separate return or the dollar amount at which the highest tax bracket begins for an estate or trust. The 3.8% Medicare tax is determined in a different manner than the regular income tax. U.S. holders should consult their tax advisors with respect to the 3.8% Medicare tax.

Accelerated Return Notes® TS-12

Accelerated Return Notes®

Linked to the Common Stock of Apple Inc. due September, 2026

 

Specified Foreign Financial Assets. U.S. holders may be subject to reporting obligations with respect to their notes if they do not hold their notes in an account maintained by a financial institution and the aggregate value of their notes and certain other “specified foreign financial assets” (applying certain attribution rules) exceeds an applicable threshold. Significant penalties can apply if a U.S. holder is required to disclose its notes and fails to do so.

Backup Withholding and Information Reporting. The proceeds received from a taxable disposition of the notes will be subject to information reporting unless you are an “exempt recipient” and may also be subject to backup withholding at the rate specified in the Code if you fail to provide certain identifying information (such as an accurate taxpayer number, if you are a U.S. holder) or meet certain other conditions.

Amounts withheld under the backup withholding rules are not additional taxes and may be refunded or credited against your U.S. federal income tax liability, provided the required information is furnished to the IRS.

Non-U.S. Holders. If you are a non-U.S. holder, subject to Section 871(m) of the Code and FATCA, discussed below, you should generally not be subject to generally applicable information reporting and backup withholding requirements with respect to payments on your notes if you comply with certain certification and identification requirements as to your non-U.S. status including providing us (and/or the applicable withholding agent) a properly executed and fully completed applicable IRS Form W-8. Subject to Section 897 of the Code and Section 871(m) of the Code, discussed below, gain realized from the taxable disposition of a note generally will not be subject to U.S. tax unless (i) such gain is effectively connected with a trade or business conducted by you in the U.S., (ii) you are a non-resident alien individual and are present in the U.S. for 183 days or more during the taxable year of such taxable disposition and certain other conditions are satisfied or (iii) you have certain other present or former connections with the U.S.

Section 897. We will not attempt to ascertain whether the Underlying Stock would be treated as a “United States real property holding corporation” (“USRPHC”) within the meaning of Section 897 of the Code. We also have not attempted to determine whether the notes should be treated as “United States real property interests” (“USRPI”) as defined in Section 897 of the Code. If any such entity and/or the notes were so treated, certain adverse U.S. federal income tax consequences could possibly apply, including subjecting any gain realized by a non-U.S. holder in respect of the notes upon a taxable disposition of the notes to U.S. federal income tax on a net basis, and the proceeds from such a taxable disposition to a withholding tax. Non-U.S. holders should consult their tax advisors regarding the potential treatment of any such entity as a USRPHC and/or the notes as USRPI.

Section 871(m). A 30% withholding tax (which may be reduced by an applicable income tax treaty) is imposed under Section 871(m) of the Code on certain “dividend equivalents” paid or deemed paid to a non-U.S. holder with respect to a “specified equity-linked instrument” that references one or more dividend-paying U.S. equity securities or indices containing U.S. equity securities. The withholding tax can apply even if the instrument does not provide for payments that reference dividends. Treasury regulations provide that the withholding tax applies to all dividend equivalents paid or deemed paid on specified equity-linked instruments that have a delta of one (“delta-one specified equity-linked instruments”) issued after 2016 and to all dividend equivalents paid or deemed paid on all other specified equity-linked instruments issued after 2017. However, the IRS has issued guidance that states that the Treasury and the IRS intend to amend the effective dates of the Treasury regulations to provide that withholding on dividend equivalents paid or deemed paid will not apply to specified equity-linked instruments that are not delta-one specified equity-linked instruments and are issued before January 1, 2027.

Based on our determination that the notes are not “delta-one” with respect to the Underlying Stock, our special U.S. tax counsel is of the opinion that the notes should not be delta-one specified equity-linked instruments and thus should not be subject to withholding on dividend equivalents. Our determination is not binding on the IRS, and the IRS may disagree with this determination. Furthermore, the application of Section 871(m) of the Code will depend on our determinations on the date the terms of the notes are set. If withholding is required, we will not make payments of any additional amounts.

Nevertheless, after the date the terms are set, it is possible that your notes could be deemed to be reissued for tax purposes upon the occurrence of certain events affecting the Underlying Stock or your notes, and following such occurrence your notes could be treated as delta-one specified equity-linked instruments that are subject to withholding on dividend equivalents. It is also possible that withholding tax or other tax under Section 871(m) of the Code could apply to the notes under these rules if you enter, or have entered, into certain other transactions in respect of the Underlying Stock or the notes. If you enter, or have entered, into other transactions in respect of the Underlying Stock or the notes, you should consult your tax advisor regarding the application of Section 871(m) of the Code to your notes in the context of your other transactions.

Because of the uncertainty regarding the application of the 30% withholding tax on dividend equivalents to the notes, you are urged to consult your tax advisor regarding the potential application of Section 871(m) of the Code and the 30% withholding tax to an investment in the notes.

U.S. Federal Estate Tax Treatment of Non-U.S. Holders. A note may be subject to U.S. federal estate tax if an individual non-U.S. holder holds the note at the time of his or her death. The gross estate of a non-U.S. holder domiciled outside the U.S. includes only property situated in the U.S. Individual non-U.S. holders should consult their tax advisors regarding the U.S. federal estate tax consequences of holding the notes at death.

FATCA. The Foreign Account Tax Compliance Act (“FATCA”) was enacted on March 18, 2010, and imposes a 30% U.S. withholding tax on “withholdable payments” (i.e., certain U.S.-source payments, including interest (and original issue discount), dividends or other fixed or determinable annual or periodical gain, profits and income, and the gross proceeds from a disposition of property of a type which can produce U.S.-source interest or dividends) and “passthru payments” (i.e., certain payments attributable to withholdable payments) made to certain foreign financial institutions (and certain of their affiliates) unless the payee foreign financial institution agrees (or is required), among other things, to disclose the identity of any U.S. individual with an account at the institution (or the relevant affiliate) and to annually report certain information about such account. FATCA also requires withholding agents making withholdable payments to certain foreign

Accelerated Return Notes® TS-13

Accelerated Return Notes®

Linked to the Common Stock of Apple Inc. due September, 2026

 

entities that do not disclose the name, address, and taxpayer identification number of any substantial U.S. owners (or do not certify that they do not have any substantial U.S. owners) to withhold tax at a rate of 30%. Under certain circumstances, a holder may be eligible for refunds or credits of such taxes.

Pursuant to final and temporary Treasury regulations and other IRS guidance, the withholding and reporting requirements under FATCA will generally apply to certain “withholdable payments”, will not apply to gross proceeds on a sale or disposition, and will apply to certain foreign passthru payments only to the extent that such payments are made after the date that is two years after final regulations defining the term “foreign passthru payment” are published. If withholding is required, we (or the applicable paying agent) will not be required to pay additional amounts with respect to the amounts so withheld. Foreign financial institutions and non-financial foreign entities located in jurisdictions that have an intergovernmental agreement with the U.S. governing FATCA may be subject to different rules.

Investors should consult their own advisors about the application of FATCA, in particular if they may be classified as financial institutions (or if they hold their notes through a foreign entity) under the FATCA rules.

Both U.S. and non-U.S. holders should consult their tax advisors regarding the U.S. federal income tax consequences of an investment in the notes, as well as any tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction (including that of BNS).

Where You Can Find More Information

We have filed a registration statement (including a product supplement, a prospectus supplement and a prospectus) with the SEC for the offering to which this term sheet relates. Before you invest, you should read the Note Prospectus, including this term sheet, and the other documents that we have filed with the SEC, for more complete information about us and this offering. You may get these documents without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, we, any agent, or any dealer participating in this offering will arrange to send you these documents if you so request by calling MLPF&S or BofAS toll-free at 1-800-294-1322.

“Accelerated Return Notes®” and “ARNs®” are registered service marks of Bank of America Corporation, the parent company of MLPF&S and BofAS.

Accelerated Return Notes® TS-14

FAQ

What is the maximum return on BNS’s Apple-linked ARNs?

The Capped Value is between $12.00 and $12.40 per $10 unit, translating to a 20 %–24 % maximum gain.

How much downside protection do the notes offer?

None; investors have 1-to-1 downside exposure to any decline in AAPL and can lose the entire $10 principal.

Why is the initial estimated value below the $10 offer price?

The gap reflects BNS’s lower internal funding rate, a $0.175 underwriting discount and a $0.05 hedging charge embedded in the note.

Do the notes pay dividends or interest?

No. Investors forgo Apple dividends and receive no periodic interest; all cash flows occur at maturity.

Can I sell the ARNs before maturity?

Liquidity is limited; BofA Securities may repurchase the notes but is not obligated, and any bid is likely below par.

What tax treatment applies to these notes?

BNS intends to treat them as prepaid derivative contracts; however, U.S. federal tax consequences remain uncertain and could change.
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