[FWP] Bank of Nova Scotia Free Writing Prospectus
Royal Bank of Canada (RY) has filed a 424B2 pricing supplement for a small, $415,000 issuance of senior, unsecured basket-linked notes maturing on 5 July 2029. The notes are tied to an equally-weighted basket of 10 large-cap equities (Cisco, Chevron, Duke Energy, Coca-Cola, Lockheed Martin, McDonald’s, Medtronic, PepsiCo, Southern Co. and Verizon). Key commercial terms are as follows:
- Principal protection: 100% of face value returned at maturity regardless of basket performance.
- Upside participation: 100% of any positive basket return; no leverage or cap.
- No coupons: the notes pay no periodic interest; total return is realised only at maturity.
- Issue price: par (100%); initial estimated value $975.36 (97.5%), reflecting dealer margin, hedge costs and RBC’s lower internal funding rate.
- Fees: underwriting discount 0.06% ($250 total); possible selling concessions up to $5 per $1,000 and referral fees up to $10.
- Liquidity: notes will not be listed; secondary trading, if any, will be on a dealer-run market with wide bid/ask spreads.
- Credit exposure: senior unsecured claim on RBC; payments subject to the bank’s credit risk. The notes are expressly not bail-inable under Canadian CDIC rules.
- Tax: expected to be treated as contingent payment debt instruments (CPDIs); U.S. holders must accrue OID-like income annually.
- Minimum investment: $1,000; denominations of $1,000 thereafter.
Investor economics: For each $1,000 invested, an investor receives $1,000 plus any positive basket return on the valuation date. If the basket is flat or negative, only principal is repaid. The product thus combines equity upside with full principal protection but sacrifices income and introduces both issuer credit risk and potential tax complexity. Illustrative scenarios show pay-offs ranging from $1,000 (0% to –100% basket return) to $1,500 at a 50% basket gain.
Risk highlights include lack of liquidity, disparity between issue price and estimated value, potential mis-match between basket components, taxation as CPDIs, and RBC’s discretion as calculation agent. Hold-to-maturity suitability is emphasised.
Given the modest size and straightforward structure, the supplement largely reiterates standard risk, tax and distribution language found in RBC’s Series J MTN program.
Royal Bank of Canada (RY) ha depositato un supplemento di prezzo 424B2 per un'emissione limitata di basket-linked notes senior non garantite per un valore di 415.000 dollari, con scadenza il 5 luglio 2029. Le note sono collegate a un portafoglio ponderato in egual misura di 10 azioni large-cap (Cisco, Chevron, Duke Energy, Coca-Cola, Lockheed Martin, McDonald’s, Medtronic, PepsiCo, Southern Co. e Verizon). I termini commerciali principali sono i seguenti:
- Protezione del capitale: restituzione del 100% del valore nominale a scadenza, indipendentemente dalla performance del basket.
- Partecipazione al rialzo: 100% di qualsiasi rendimento positivo del basket; senza leva né limite massimo.
- Nessuna cedola: le note non pagano interessi periodici; il rendimento totale si realizza solo a scadenza.
- Prezzo di emissione: pari (100%); valore stimato iniziale di 975,36 dollari (97,5%), che riflette il margine del dealer, i costi di copertura e il tasso di finanziamento interno più basso di RBC.
- Commissioni: sconto di sottoscrizione dello 0,06% (250 dollari totali); possibili commissioni di vendita fino a 5 dollari per 1.000 dollari e commissioni di segnalazione fino a 10 dollari.
- Liquidità: le note non saranno quotate; eventuali scambi secondari avverranno su un mercato gestito dai dealer con ampi spread denaro-lettera.
- Esposizione creditizia: credito senior non garantito verso RBC; i pagamenti dipendono dal rischio di credito della banca. Le note sono espressamente non soggette a bail-in secondo le regole canadesi CDIC.
- Fiscalità: si prevede che vengano trattate come strumenti di debito a pagamento contingente (CPDI); i detentori statunitensi devono imputare annualmente un reddito simile all'OID.
- Investimento minimo: 1.000 dollari; tagli successivi di 1.000 dollari.
Economia per l’investitore: Per ogni 1.000 dollari investiti, l’investitore riceve 1.000 dollari più qualsiasi rendimento positivo del basket alla data di valutazione. Se il basket è invariato o negativo, viene restituito solo il capitale. Il prodotto combina quindi un potenziale rialzo azionario con la protezione totale del capitale, sacrificando però il reddito e introducendo rischi di credito dell’emittente e complessità fiscale. Scenari illustrativi mostrano pagamenti da 1.000 dollari (da 0% a -100% di rendimento del basket) fino a 1.500 dollari con un guadagno del 50% del basket.
Principali rischi includono la mancanza di liquidità, la differenza tra prezzo di emissione e valore stimato, possibili discrepanze tra i componenti del basket, la tassazione come CPDI e la discrezionalità di RBC come agente di calcolo. Si sottolinea la idoneità per il mantenimento fino a scadenza.
Data la dimensione modesta e la struttura semplice, il supplemento riprende in gran parte il linguaggio standard su rischi, fiscalità e distribuzione presente nel programma MTN Serie J di RBC.
Royal Bank of Canada (RY) ha presentado un suplemento de precio 424B2 para una emisión pequeña de notas senior no garantizadas vinculadas a una cesta por 415,000 dólares, con vencimiento el 5 de julio de 2029. Las notas están vinculadas a una canasta ponderada equitativamente de 10 acciones large-cap (Cisco, Chevron, Duke Energy, Coca-Cola, Lockheed Martin, McDonald’s, Medtronic, PepsiCo, Southern Co. y Verizon). Los términos comerciales clave son los siguientes:
- Protección del principal: se devuelve el 100% del valor nominal al vencimiento independientemente del rendimiento de la cesta.
- Participación en la subida: 100% de cualquier rendimiento positivo de la cesta; sin apalancamiento ni límite máximo.
- Sin cupones: las notas no pagan intereses periódicos; el rendimiento total se realiza solo al vencimiento.
- Precio de emisión: par (100%); valor estimado inicial de 975.36 dólares (97.5%), reflejando margen del distribuidor, costos de cobertura y la tasa interna de financiamiento más baja de RBC.
- Comisiones: descuento de suscripción del 0.06% (250 dólares totales); posibles concesiones de venta hasta 5 dólares por cada 1,000 y comisiones de referencia hasta 10 dólares.
- Liquidez: las notas no estarán listadas; el comercio secundario, si existe, será en un mercado gestionado por distribuidores con amplios diferenciales de compra/venta.
- Exposición crediticia: reclamo senior no garantizado contra RBC; los pagos están sujetos al riesgo crediticio del banco. Las notas expresamente no son susceptibles de rescate interno (bail-in) bajo las reglas canadienses CDIC.
- Fiscalidad: se espera que se traten como instrumentos de deuda con pagos contingentes (CPDI); los titulares estadounidenses deben acumular ingresos anuales similares a OID.
- Inversión mínima: 1,000 dólares; denominaciones de 1,000 dólares en adelante.
Economía para el inversor: Por cada 1,000 dólares invertidos, el inversor recibe 1,000 dólares más cualquier rendimiento positivo de la cesta en la fecha de valoración. Si la cesta está plana o negativa, solo se devuelve el principal. El producto combina así la subida potencial de las acciones con la protección total del principal, pero sacrifica ingresos e introduce riesgos crediticios del emisor y posible complejidad fiscal. Escenarios ilustrativos muestran pagos que van desde 1,000 dólares (0% a -100% de rendimiento de la cesta) hasta 1,500 dólares con una ganancia del 50% en la cesta.
Aspectos de riesgo incluyen falta de liquidez, discrepancia entre precio de emisión y valor estimado, posible desajuste entre componentes de la cesta, tributación como CPDI y la discrecionalidad de RBC como agente de cálculo. Se enfatiza la idoneidad para mantener hasta el vencimiento.
Dada la modesta escala y estructura sencilla, el suplemento en gran medida reitera el lenguaje estándar sobre riesgos, impuestos y distribución que se encuentra en el programa MTN Serie J de RBC.
Royal Bank of Canada (RY)는 만기일이 2029년 7월 5일인 소규모 415,000달러 규모의 선순위 무담보 바스켓 연계 노트 발행을 위한 424B2 가격 보충서를 제출했습니다. 이 노트는 10개 대형주로 구성된 동일 가중 바스켓(Cisco, Chevron, Duke Energy, Coca-Cola, Lockheed Martin, McDonald’s, Medtronic, PepsiCo, Southern Co., Verizon)에 연동되어 있습니다. 주요 상업 조건은 다음과 같습니다:
- 원금 보호: 바스켓 성과와 관계없이 만기 시 액면가의 100% 반환.
- 상승 참여: 바스켓의 긍정적 수익률 100% 참여; 레버리지나 상한 없음.
- 쿠폰 없음: 이 노트는 정기 이자 지급이 없으며 총 수익은 만기에 실현됩니다.
- 발행 가격: 액면가(100%); 초기 추정 가치는 975.36달러(97.5%)로, 딜러 마진, 헤지 비용 및 RBC의 낮은 내부 자금 조달 금리를 반영합니다.
- 수수료: 인수 할인율 0.06%(총 250달러); 1,000달러당 최대 5달러의 판매 수수료 및 최대 10달러의 추천 수수료 가능.
- 유동성: 노트는 상장되지 않으며, 2차 거래가 있을 경우 딜러 주도 시장에서 매수/매도 스프레드가 큽니다.
- 신용 노출: RBC에 대한 선순위 무담보 채권; 지급은 은행 신용 위험에 따릅니다. 이 노트는 캐나다 CDIC 규정에 따라 명시적으로 바일인 대상이 아닙니다.
- 세금: 조건부 지급 채무상품(CPDI)로 분류될 것으로 예상되며, 미국 보유자는 매년 OID 유사 소득을 인식해야 합니다.
- 최소 투자 금액: 1,000달러; 이후 1,000달러 단위로 투자 가능.
투자자 경제성: 1,000달러 투자 시 평가일에 1,000달러와 바스켓의 긍정적 수익률을 합산하여 지급받습니다. 바스켓이 변동 없거나 마이너스일 경우 원금만 상환됩니다. 이 상품은 주식 상승 잠재력과 원금 전액 보호를 결합하지만, 이자 수익을 포기하고 발행자 신용 위험 및 세금 복잡성을 수반합니다. 예시 시나리오는 바스켓 수익률 0%에서 -100%까지는 1,000달러, 50% 상승 시 1,500달러의 지급을 보여줍니다.
주요 위험 요인은 유동성 부족, 발행가와 추정 가치 간 차이, 바스켓 구성 요소 간 불일치 가능성, CPDI로서의 과세, 그리고 계산 대리인으로서 RBC의 재량권을 포함합니다. 만기까지 보유하는 것이 적합하다고 강조됩니다.
규모가 작고 구조가 단순해, 이 보충서는 RBC의 Series J MTN 프로그램에서 일반적으로 사용되는 위험, 세금 및 배포 관련 표준 문구를 대부분 재확인합니다.
Royal Bank of Canada (RY) a déposé un supplément de prix 424B2 pour une émission limitée de notes senior non sécurisées liées à un panier d’un montant de 415 000 dollars, arrivant à échéance le 5 juillet 2029. Les notes sont liées à un panier pondéré également composé de 10 actions large-cap (Cisco, Chevron, Duke Energy, Coca-Cola, Lockheed Martin, McDonald’s, Medtronic, PepsiCo, Southern Co. et Verizon). Les principaux termes commerciaux sont les suivants :
- Protection du capital : restitution de 100 % de la valeur nominale à l’échéance, quelle que soit la performance du panier.
- Participation à la hausse : 100 % de tout rendement positif du panier ; sans effet de levier ni plafond.
- Pas de coupons : les notes ne versent aucun intérêt périodique ; le rendement total est réalisé uniquement à l’échéance.
- Prix d’émission : pair (100 %) ; valeur estimée initiale de 975,36 $ (97,5 %), reflétant la marge du teneur de marché, les coûts de couverture et le taux de financement interne plus bas de RBC.
- Frais : escompte de souscription de 0,06 % (250 $ au total) ; concessions de vente possibles jusqu’à 5 $ par tranche de 1 000 $ et frais de recommandation jusqu’à 10 $.
- Liquidité : les notes ne seront pas cotées ; les échanges secondaires, le cas échéant, se feront sur un marché géré par des teneurs avec des écarts acheteur/vendeur importants.
- Exposition au crédit : créance senior non garantie sur RBC ; les paiements dépendent du risque de crédit de la banque. Les notes ne sont expressément pas soumises au bail-in selon les règles canadiennes CDIC.
- Fiscalité : elles devraient être traitées comme des instruments de dette à paiement conditionnel (CPDI) ; les détenteurs américains doivent comptabiliser chaque année un revenu similaire à l’OID.
- Investissement minimum : 1 000 $ ; puis par tranches de 1 000 $.
Économie pour l’investisseur : Pour chaque tranche de 1 000 $ investie, l’investisseur reçoit 1 000 $ plus tout rendement positif du panier à la date d’évaluation. Si le panier est stable ou négatif, seul le capital est remboursé. Le produit combine ainsi un potentiel de hausse des actions avec une protection intégrale du capital, mais sacrifie les revenus et introduit un risque de crédit émetteur ainsi qu’une complexité fiscale potentielle. Des scénarios illustratifs montrent des paiements allant de 1 000 $ (rendement du panier de 0 % à -100 %) à 1 500 $ pour un gain de 50 % du panier.
Points clés de risque comprennent le manque de liquidité, l’écart entre le prix d’émission et la valeur estimée, un éventuel décalage entre les composants du panier, la fiscalité en tant que CPDI, et la discrétion de RBC en tant qu’agent de calcul. L’adéquation pour une détention jusqu’à l’échéance est soulignée.
Compte tenu de la taille modeste et de la structure simple, le supplément reprend en grande partie le langage standard sur les risques, la fiscalité et la distribution présent dans le programme MTN Série J de RBC.
Royal Bank of Canada (RY) hat einen 424B2-Preiszusatz für eine kleine Emission von Senior, unbesicherten korbgebundenen Notes in Höhe von 415.000 USD eingereicht, die am 5. Juli 2029 fällig werden. Die Notes sind an einen gleichgewichteten Korb von 10 Large-Cap-Aktien (Cisco, Chevron, Duke Energy, Coca-Cola, Lockheed Martin, McDonald’s, Medtronic, PepsiCo, Southern Co. und Verizon) gekoppelt. Die wichtigsten kommerziellen Bedingungen lauten wie folgt:
- Kapitalschutz: 100 % des Nennwerts werden bei Fälligkeit zurückgezahlt, unabhängig von der Performance des Korbs.
- Teilnahme am Aufwärtspotenzial: 100 % aller positiven Korbrenditen; ohne Hebel oder Obergrenze.
- Keine Kupons: Die Notes zahlen keine periodischen Zinsen; die Gesamtrendite wird erst bei Fälligkeit realisiert.
- Ausgabepreis: pari (100 %); geschätzter Anfangswert 975,36 USD (97,5 %), unter Berücksichtigung der Händlermarge, Absicherungskosten und des niedrigeren internen Finanzierungssatzes von RBC.
- Gebühren: Zeichnungsabschlag 0,06 % (insgesamt 250 USD); mögliche Verkaufsprovisionen bis zu 5 USD pro 1.000 USD und Empfehlungsgebühren bis zu 10 USD.
- Liquidität: Die Notes werden nicht börsennotiert; ein möglicher Sekundärhandel erfolgt über einen von Händlern betriebenen Markt mit großen Geld-/Brief-Spannen.
- Kreditrisiko: Senior unbesicherter Anspruch auf RBC; Zahlungen unterliegen dem Kreditrisiko der Bank. Die Notes sind ausdrücklich nicht bail-in-fähig gemäß den kanadischen CDIC-Regeln.
- Steuern: Es wird erwartet, dass sie als kontingent zahlbare Schuldinstrumente (CPDI) behandelt werden; US-Inhaber müssen jährlich OID-ähnliche Einkünfte ansetzen.
- Mindestanlage: 1.000 USD; danach in Stückelungen von 1.000 USD.
Wirtschaftlichkeit für Anleger: Für jede 1.000 USD Investition erhält der Anleger 1.000 USD plus jegliche positive Korbrendite zum Bewertungsdatum. Liegt der Korb flach oder negativ, wird nur der Kapitalbetrag zurückgezahlt. Das Produkt kombiniert somit das Aufwärtspotenzial von Aktien mit vollständigem Kapitalschutz, verzichtet jedoch auf laufende Erträge und bringt Emittenten-Kreditrisiken sowie potenzielle steuerliche Komplexität mit sich. Beispielhafte Szenarien zeigen Auszahlungen von 1.000 USD (0 % bis -100 % Korbrendite) bis zu 1.500 USD bei einem 50 %igen Korbgewinn.
Risikohighlights umfassen mangelnde Liquidität, Differenz zwischen Ausgabepreis und geschätztem Wert, mögliche Unstimmigkeiten zwischen den Korbbestandteilen, Besteuerung als CPDIs und die Ermessensspielräume von RBC als Berechnungsstelle. Die Eignung für Halten bis zur Fälligkeit wird betont.
Angesichts der überschaubaren Größe und einfachen Struktur wiederholt der Zusatz weitgehend die üblichen Risiko-, Steuer- und Vertriebsformulierungen aus dem MTN-Programm Serie J von RBC.
- Full principal protection: investors cannot lose capital if held to maturity.
- 100% upside participation with no cap enhances potential equity-like gains.
- Diversified 10-stock basket mitigates single-issuer risk.
- Not bail-inable, removing statutory conversion risk common to Canadian bank notes.
- No periodic interest; total return deferred for four years.
- Initial estimated value 2.5% below offer price, creating immediate economic drag.
- Illiquid secondary market; notes are unlisted and dealer support discretionary.
- Taxed as CPDI, forcing U.S. holders to accrue interest income annually without cash flow.
- Issuer credit risk: repayment depends solely on RBC’s ability to pay.
Insights
TL;DR – 100% principal protection with uncapped equity upside; credit and liquidity risk remain.
From a structural standpoint the note is conservative: investors trade foregone coupons for guaranteed return of principal plus full upside participation. The 100% participation rate is competitive for a 4-year tenor, aided by the low internal funding rate RBC assigns to MTNs. However, the 2.5% premium embedded in the public offer over the $975.36 estimated value means investors start in a loss position and must see a ≥2.5% basket gain just to break even versus true economic value.
Diversification across ten defensive, dividend-oriented large-caps reduces idiosyncratic risk, yet correlation drag could mute returns if leaders underperform laggards. Absence of secondary-market depth, CPDI taxation, and reliance on RBC’s investment-grade credit profile limit suitability to buy-and-hold accounts comfortable with illiquidity and phantom income.
TL;DR – Niche capital-protected bet; return profile similar to 4-year zero-coupon plus equity call.
From a portfolio construction view, this note behaves like purchasing a zero-coupon RBC bond and reinvesting the discount into an at-the-money call on a diversified U.S. equity sleeve. For tax-exempt or non-U.S. accounts, complexity is manageable, but U.S. taxpayers face unattractive CPDI OID accruals. Relative to buying a 4-year RBC senior bond (~4.5% YTM) and equity ETF exposure, investors relinquish periodic income and flexibility. That trade-off may appeal only where downside capital preservation is paramount and liquidity needs are remote.
Royal Bank of Canada (RY) ha depositato un supplemento di prezzo 424B2 per un'emissione limitata di basket-linked notes senior non garantite per un valore di 415.000 dollari, con scadenza il 5 luglio 2029. Le note sono collegate a un portafoglio ponderato in egual misura di 10 azioni large-cap (Cisco, Chevron, Duke Energy, Coca-Cola, Lockheed Martin, McDonald’s, Medtronic, PepsiCo, Southern Co. e Verizon). I termini commerciali principali sono i seguenti:
- Protezione del capitale: restituzione del 100% del valore nominale a scadenza, indipendentemente dalla performance del basket.
- Partecipazione al rialzo: 100% di qualsiasi rendimento positivo del basket; senza leva né limite massimo.
- Nessuna cedola: le note non pagano interessi periodici; il rendimento totale si realizza solo a scadenza.
- Prezzo di emissione: pari (100%); valore stimato iniziale di 975,36 dollari (97,5%), che riflette il margine del dealer, i costi di copertura e il tasso di finanziamento interno più basso di RBC.
- Commissioni: sconto di sottoscrizione dello 0,06% (250 dollari totali); possibili commissioni di vendita fino a 5 dollari per 1.000 dollari e commissioni di segnalazione fino a 10 dollari.
- Liquidità: le note non saranno quotate; eventuali scambi secondari avverranno su un mercato gestito dai dealer con ampi spread denaro-lettera.
- Esposizione creditizia: credito senior non garantito verso RBC; i pagamenti dipendono dal rischio di credito della banca. Le note sono espressamente non soggette a bail-in secondo le regole canadesi CDIC.
- Fiscalità: si prevede che vengano trattate come strumenti di debito a pagamento contingente (CPDI); i detentori statunitensi devono imputare annualmente un reddito simile all'OID.
- Investimento minimo: 1.000 dollari; tagli successivi di 1.000 dollari.
Economia per l’investitore: Per ogni 1.000 dollari investiti, l’investitore riceve 1.000 dollari più qualsiasi rendimento positivo del basket alla data di valutazione. Se il basket è invariato o negativo, viene restituito solo il capitale. Il prodotto combina quindi un potenziale rialzo azionario con la protezione totale del capitale, sacrificando però il reddito e introducendo rischi di credito dell’emittente e complessità fiscale. Scenari illustrativi mostrano pagamenti da 1.000 dollari (da 0% a -100% di rendimento del basket) fino a 1.500 dollari con un guadagno del 50% del basket.
Principali rischi includono la mancanza di liquidità, la differenza tra prezzo di emissione e valore stimato, possibili discrepanze tra i componenti del basket, la tassazione come CPDI e la discrezionalità di RBC come agente di calcolo. Si sottolinea la idoneità per il mantenimento fino a scadenza.
Data la dimensione modesta e la struttura semplice, il supplemento riprende in gran parte il linguaggio standard su rischi, fiscalità e distribuzione presente nel programma MTN Serie J di RBC.
Royal Bank of Canada (RY) ha presentado un suplemento de precio 424B2 para una emisión pequeña de notas senior no garantizadas vinculadas a una cesta por 415,000 dólares, con vencimiento el 5 de julio de 2029. Las notas están vinculadas a una canasta ponderada equitativamente de 10 acciones large-cap (Cisco, Chevron, Duke Energy, Coca-Cola, Lockheed Martin, McDonald’s, Medtronic, PepsiCo, Southern Co. y Verizon). Los términos comerciales clave son los siguientes:
- Protección del principal: se devuelve el 100% del valor nominal al vencimiento independientemente del rendimiento de la cesta.
- Participación en la subida: 100% de cualquier rendimiento positivo de la cesta; sin apalancamiento ni límite máximo.
- Sin cupones: las notas no pagan intereses periódicos; el rendimiento total se realiza solo al vencimiento.
- Precio de emisión: par (100%); valor estimado inicial de 975.36 dólares (97.5%), reflejando margen del distribuidor, costos de cobertura y la tasa interna de financiamiento más baja de RBC.
- Comisiones: descuento de suscripción del 0.06% (250 dólares totales); posibles concesiones de venta hasta 5 dólares por cada 1,000 y comisiones de referencia hasta 10 dólares.
- Liquidez: las notas no estarán listadas; el comercio secundario, si existe, será en un mercado gestionado por distribuidores con amplios diferenciales de compra/venta.
- Exposición crediticia: reclamo senior no garantizado contra RBC; los pagos están sujetos al riesgo crediticio del banco. Las notas expresamente no son susceptibles de rescate interno (bail-in) bajo las reglas canadienses CDIC.
- Fiscalidad: se espera que se traten como instrumentos de deuda con pagos contingentes (CPDI); los titulares estadounidenses deben acumular ingresos anuales similares a OID.
- Inversión mínima: 1,000 dólares; denominaciones de 1,000 dólares en adelante.
Economía para el inversor: Por cada 1,000 dólares invertidos, el inversor recibe 1,000 dólares más cualquier rendimiento positivo de la cesta en la fecha de valoración. Si la cesta está plana o negativa, solo se devuelve el principal. El producto combina así la subida potencial de las acciones con la protección total del principal, pero sacrifica ingresos e introduce riesgos crediticios del emisor y posible complejidad fiscal. Escenarios ilustrativos muestran pagos que van desde 1,000 dólares (0% a -100% de rendimiento de la cesta) hasta 1,500 dólares con una ganancia del 50% en la cesta.
Aspectos de riesgo incluyen falta de liquidez, discrepancia entre precio de emisión y valor estimado, posible desajuste entre componentes de la cesta, tributación como CPDI y la discrecionalidad de RBC como agente de cálculo. Se enfatiza la idoneidad para mantener hasta el vencimiento.
Dada la modesta escala y estructura sencilla, el suplemento en gran medida reitera el lenguaje estándar sobre riesgos, impuestos y distribución que se encuentra en el programa MTN Serie J de RBC.
Royal Bank of Canada (RY)는 만기일이 2029년 7월 5일인 소규모 415,000달러 규모의 선순위 무담보 바스켓 연계 노트 발행을 위한 424B2 가격 보충서를 제출했습니다. 이 노트는 10개 대형주로 구성된 동일 가중 바스켓(Cisco, Chevron, Duke Energy, Coca-Cola, Lockheed Martin, McDonald’s, Medtronic, PepsiCo, Southern Co., Verizon)에 연동되어 있습니다. 주요 상업 조건은 다음과 같습니다:
- 원금 보호: 바스켓 성과와 관계없이 만기 시 액면가의 100% 반환.
- 상승 참여: 바스켓의 긍정적 수익률 100% 참여; 레버리지나 상한 없음.
- 쿠폰 없음: 이 노트는 정기 이자 지급이 없으며 총 수익은 만기에 실현됩니다.
- 발행 가격: 액면가(100%); 초기 추정 가치는 975.36달러(97.5%)로, 딜러 마진, 헤지 비용 및 RBC의 낮은 내부 자금 조달 금리를 반영합니다.
- 수수료: 인수 할인율 0.06%(총 250달러); 1,000달러당 최대 5달러의 판매 수수료 및 최대 10달러의 추천 수수료 가능.
- 유동성: 노트는 상장되지 않으며, 2차 거래가 있을 경우 딜러 주도 시장에서 매수/매도 스프레드가 큽니다.
- 신용 노출: RBC에 대한 선순위 무담보 채권; 지급은 은행 신용 위험에 따릅니다. 이 노트는 캐나다 CDIC 규정에 따라 명시적으로 바일인 대상이 아닙니다.
- 세금: 조건부 지급 채무상품(CPDI)로 분류될 것으로 예상되며, 미국 보유자는 매년 OID 유사 소득을 인식해야 합니다.
- 최소 투자 금액: 1,000달러; 이후 1,000달러 단위로 투자 가능.
투자자 경제성: 1,000달러 투자 시 평가일에 1,000달러와 바스켓의 긍정적 수익률을 합산하여 지급받습니다. 바스켓이 변동 없거나 마이너스일 경우 원금만 상환됩니다. 이 상품은 주식 상승 잠재력과 원금 전액 보호를 결합하지만, 이자 수익을 포기하고 발행자 신용 위험 및 세금 복잡성을 수반합니다. 예시 시나리오는 바스켓 수익률 0%에서 -100%까지는 1,000달러, 50% 상승 시 1,500달러의 지급을 보여줍니다.
주요 위험 요인은 유동성 부족, 발행가와 추정 가치 간 차이, 바스켓 구성 요소 간 불일치 가능성, CPDI로서의 과세, 그리고 계산 대리인으로서 RBC의 재량권을 포함합니다. 만기까지 보유하는 것이 적합하다고 강조됩니다.
규모가 작고 구조가 단순해, 이 보충서는 RBC의 Series J MTN 프로그램에서 일반적으로 사용되는 위험, 세금 및 배포 관련 표준 문구를 대부분 재확인합니다.
Royal Bank of Canada (RY) a déposé un supplément de prix 424B2 pour une émission limitée de notes senior non sécurisées liées à un panier d’un montant de 415 000 dollars, arrivant à échéance le 5 juillet 2029. Les notes sont liées à un panier pondéré également composé de 10 actions large-cap (Cisco, Chevron, Duke Energy, Coca-Cola, Lockheed Martin, McDonald’s, Medtronic, PepsiCo, Southern Co. et Verizon). Les principaux termes commerciaux sont les suivants :
- Protection du capital : restitution de 100 % de la valeur nominale à l’échéance, quelle que soit la performance du panier.
- Participation à la hausse : 100 % de tout rendement positif du panier ; sans effet de levier ni plafond.
- Pas de coupons : les notes ne versent aucun intérêt périodique ; le rendement total est réalisé uniquement à l’échéance.
- Prix d’émission : pair (100 %) ; valeur estimée initiale de 975,36 $ (97,5 %), reflétant la marge du teneur de marché, les coûts de couverture et le taux de financement interne plus bas de RBC.
- Frais : escompte de souscription de 0,06 % (250 $ au total) ; concessions de vente possibles jusqu’à 5 $ par tranche de 1 000 $ et frais de recommandation jusqu’à 10 $.
- Liquidité : les notes ne seront pas cotées ; les échanges secondaires, le cas échéant, se feront sur un marché géré par des teneurs avec des écarts acheteur/vendeur importants.
- Exposition au crédit : créance senior non garantie sur RBC ; les paiements dépendent du risque de crédit de la banque. Les notes ne sont expressément pas soumises au bail-in selon les règles canadiennes CDIC.
- Fiscalité : elles devraient être traitées comme des instruments de dette à paiement conditionnel (CPDI) ; les détenteurs américains doivent comptabiliser chaque année un revenu similaire à l’OID.
- Investissement minimum : 1 000 $ ; puis par tranches de 1 000 $.
Économie pour l’investisseur : Pour chaque tranche de 1 000 $ investie, l’investisseur reçoit 1 000 $ plus tout rendement positif du panier à la date d’évaluation. Si le panier est stable ou négatif, seul le capital est remboursé. Le produit combine ainsi un potentiel de hausse des actions avec une protection intégrale du capital, mais sacrifie les revenus et introduit un risque de crédit émetteur ainsi qu’une complexité fiscale potentielle. Des scénarios illustratifs montrent des paiements allant de 1 000 $ (rendement du panier de 0 % à -100 %) à 1 500 $ pour un gain de 50 % du panier.
Points clés de risque comprennent le manque de liquidité, l’écart entre le prix d’émission et la valeur estimée, un éventuel décalage entre les composants du panier, la fiscalité en tant que CPDI, et la discrétion de RBC en tant qu’agent de calcul. L’adéquation pour une détention jusqu’à l’échéance est soulignée.
Compte tenu de la taille modeste et de la structure simple, le supplément reprend en grande partie le langage standard sur les risques, la fiscalité et la distribution présent dans le programme MTN Série J de RBC.
Royal Bank of Canada (RY) hat einen 424B2-Preiszusatz für eine kleine Emission von Senior, unbesicherten korbgebundenen Notes in Höhe von 415.000 USD eingereicht, die am 5. Juli 2029 fällig werden. Die Notes sind an einen gleichgewichteten Korb von 10 Large-Cap-Aktien (Cisco, Chevron, Duke Energy, Coca-Cola, Lockheed Martin, McDonald’s, Medtronic, PepsiCo, Southern Co. und Verizon) gekoppelt. Die wichtigsten kommerziellen Bedingungen lauten wie folgt:
- Kapitalschutz: 100 % des Nennwerts werden bei Fälligkeit zurückgezahlt, unabhängig von der Performance des Korbs.
- Teilnahme am Aufwärtspotenzial: 100 % aller positiven Korbrenditen; ohne Hebel oder Obergrenze.
- Keine Kupons: Die Notes zahlen keine periodischen Zinsen; die Gesamtrendite wird erst bei Fälligkeit realisiert.
- Ausgabepreis: pari (100 %); geschätzter Anfangswert 975,36 USD (97,5 %), unter Berücksichtigung der Händlermarge, Absicherungskosten und des niedrigeren internen Finanzierungssatzes von RBC.
- Gebühren: Zeichnungsabschlag 0,06 % (insgesamt 250 USD); mögliche Verkaufsprovisionen bis zu 5 USD pro 1.000 USD und Empfehlungsgebühren bis zu 10 USD.
- Liquidität: Die Notes werden nicht börsennotiert; ein möglicher Sekundärhandel erfolgt über einen von Händlern betriebenen Markt mit großen Geld-/Brief-Spannen.
- Kreditrisiko: Senior unbesicherter Anspruch auf RBC; Zahlungen unterliegen dem Kreditrisiko der Bank. Die Notes sind ausdrücklich nicht bail-in-fähig gemäß den kanadischen CDIC-Regeln.
- Steuern: Es wird erwartet, dass sie als kontingent zahlbare Schuldinstrumente (CPDI) behandelt werden; US-Inhaber müssen jährlich OID-ähnliche Einkünfte ansetzen.
- Mindestanlage: 1.000 USD; danach in Stückelungen von 1.000 USD.
Wirtschaftlichkeit für Anleger: Für jede 1.000 USD Investition erhält der Anleger 1.000 USD plus jegliche positive Korbrendite zum Bewertungsdatum. Liegt der Korb flach oder negativ, wird nur der Kapitalbetrag zurückgezahlt. Das Produkt kombiniert somit das Aufwärtspotenzial von Aktien mit vollständigem Kapitalschutz, verzichtet jedoch auf laufende Erträge und bringt Emittenten-Kreditrisiken sowie potenzielle steuerliche Komplexität mit sich. Beispielhafte Szenarien zeigen Auszahlungen von 1.000 USD (0 % bis -100 % Korbrendite) bis zu 1.500 USD bei einem 50 %igen Korbgewinn.
Risikohighlights umfassen mangelnde Liquidität, Differenz zwischen Ausgabepreis und geschätztem Wert, mögliche Unstimmigkeiten zwischen den Korbbestandteilen, Besteuerung als CPDIs und die Ermessensspielräume von RBC als Berechnungsstelle. Die Eignung für Halten bis zur Fälligkeit wird betont.
Angesichts der überschaubaren Größe und einfachen Struktur wiederholt der Zusatz weitgehend die üblichen Risiko-, Steuer- und Vertriebsformulierungen aus dem MTN-Programm Serie J von RBC.
|
|
ISSUER FREE WRITING PROSPECTUS |
|
Filed Pursuant to Rule 433 |
|
|
Registration Statement No. 333-282565 |
|
|
Dated July 2, 2025 |
Contingent Income Auto-Callable Securities due on or about July 14, 2028
Based on the Performance of the Common Stock of Robinhood Markets, Inc.
Principal at Risk Securities
This document provides a summary of the terms of the Contingent Income Auto-Callable Securities (the “securities”). Investors should carefully review the accompanying preliminary pricing supplement for the securities, the accompanying product supplement, the prospectus supplement and the prospectus, as well as the “Risk Considerations” section below, before making an investment decision.
The securities do not guarantee any return of principal at maturity. Investors will not participate in any appreciation of the underlying stock and must be willing to accept the risk of not receiving any contingent quarterly coupons over the term of the securities. The securities are senior unsecured debt securities issued by The Bank of Nova Scotia (“BNS”), and all payments on the securities are subject to the credit risk of BNS. As used in this document, “we,” “us,” or “our” refers to BNS.
|
SUMMARY TERMS |
|
|
Issuer: |
The Bank of Nova Scotia |
|
Issue: |
Senior Note Program, Series A |
|
Underlying stock: |
Common stock of Robinhood Markets, Inc. (Bloomberg Ticker: “HOOD UW”) |
|
Stated principal amount: |
$1,000.00 per security |
|
Minimum investment: |
$1,000 (1 security) |
|
Pricing date: |
July 11, 2025 |
|
Original issue date: |
July 16, 2025 (3 business days after the pricing date; see preliminary pricing supplement). |
|
Final determination date: |
July 11, 2028, subject to postponement for certain market disruption events and as described in the accompanying product supplement. |
|
Maturity date: |
July 14, 2028, subject to postponement for certain market disruption events and as described in the accompanying product supplement. |
|
Early redemption: |
If the closing price of the underlying stock on any determination date other than the final determination date is greater than or equal to the call threshold price, the securities will be automatically redeemed for an amount per security equal to the early redemption payment on the first contingent coupon payment date immediately following the related determination date. No further payments will be made on the securities once they have been redeemed. |
|
Early redemption payment: |
The early redemption payment will be an amount equal to (i) the stated principal amount plus (ii) the contingent quarterly coupon with respect to the applicable determination date and any previously unpaid contingent quarterly coupons with respect to any previous determination dates pursuant to the memory coupon feature. |
|
Contingent quarterly coupon: |
▪If the closing price on any determination date is greater than or equal to the downside threshold price, we will pay on the related contingent coupon payment date a contingent quarterly coupon of $51.25 (equivalent to 20.50% per annum of the stated principal amount) per security, plus any previously unpaid contingent quarterly coupons with respect to any previous determination dates pursuant to the memory coupon feature. ▪If the closing price on any determination date is less than the downside threshold price, we will not pay a contingent quarterly coupon on the related contingent coupon payment date. |
|
Memory coupon feature: |
If a contingent quarterly coupon is not paid on a contingent coupon payment date (other than the maturity date) because the closing price of the underlying stock on the related determination date is less than the downside threshold price, such contingent quarterly coupon will be paid on a later contingent coupon payment date if the closing price of the underlying stock on the determination date corresponding to such later contingent coupon payment date is greater than or equal to the downside threshold price. For the avoidance of doubt, once a previously unpaid contingent quarterly coupon has been paid on a later contingent coupon payment date, it will not be made again on any subsequent contingent coupon payment date. If the closing price of the underlying stock on each of the determination dates is less than the downside threshold price, you will receive no contingent quarterly coupons during the term of, and will not receive a positive return on, the securities. |
|
Determination dates: |
Quarterly (as set forth on the cover of the preliminary pricing supplement), subject to postponement for non-trading days and certain market disruption events as described in the accompanying product supplement. |
|
Contingent coupon payment dates: |
Quarterly (as set forth on the cover of the preliminary pricing supplement), subject to postponement for non-business days and certain market disruption events as described in the accompanying product supplement. |
|
Payment at maturity: |
▪If the final share price is greater than or equal to the downside threshold price: (i) the stated principal amount plus (ii) the contingent quarterly coupon with respect to the final determination date and any previously unpaid contingent quarterly coupons with respect to any previous determination dates pursuant to the memory coupon feature ▪If the final share price is less than the downside threshold price: (i) the stated principal amount multiplied by (ii) the share performance factor If the final share price is less than the downside threshold price, the payment at maturity will be less than 50.00% of the stated principal amount and could be as low as zero. |
|
Share performance factor: |
Final share price divided by the initial share price |
|
Call threshold price: |
100.00% of the initial share price, as may be adjusted in the case of certain adjustment events as described in the accompanying product supplement |
|
Downside threshold price: |
50.00% of the initial share price, as may be adjusted in the case of certain adjustment events as described in the accompanying product supplement |
|
Initial share price: |
The closing price of the underlying stock on the pricing date, as may be adjusted in the case of certain adjustment events as described in the accompanying product supplement. |
|
Final share price: |
The closing price of the underlying stock on the final determination date, as may be adjusted in the case of certain adjustment events as described in the accompanying product supplement |
|
CUSIP / ISIN: |
06419DAJ2 / US06419DAJ28 |
|
Listing: |
The securities will not be listed or displayed on any securities exchange or any electronic communications network. |
|
Commission: |
$22.50 per stated principal amount. |
|
Estimated value on the pricing date: |
Expected to be between $923.45 and $953.35 per security. See “Risk Factors” in the preliminary pricing supplement. |
|
Preliminary pricing supplement: |
http://www.sec.gov/Archives/edgar/data/9631/000183988225036746/bns_424b2-19872.htm |
|
HYPOTHETICAL PAYOUT |
The below figures are based on a hypothetical downside threshold price of 50.00% of a hypothetical initial share price and are purely hypothetical (the actual terms of your securities will be determined on the pricing date and will be specified in the final pricing supplement).
Hypothetical Payment at Maturity if No Early Redemption Occurs
|
Change in Underlying Stock |
Payment at Maturity (excluding any contingent quarterly coupon payable at maturity) |
|
+50.00% |
$1,000.00 |
|
+40.00% |
$1,000.00 |
|
+30.00% |
$1,000.00 |
|
+20.00% |
$1,000.00 |
|
+10.00% |
$1,000.00 |
|
0.00% |
$1,000.00 |
|
-10.00% |
$1,000.00 |
|
-20.00% |
$1,000.00 |
|
-30.00% |
$1,000.00 |
|
-40.00% |
$1,000.00 |
|
-50.00% |
$1,000.00 |
|
-51.00% |
$490.00 |
|
-60.00% |
$400.00 |
|
-70.00% |
$300.00 |
|
-80.00% |
$200.00 |
|
-90.00% |
$100.00 |
|
-100.00% |
$0.00 |
A-1
You will find a link to the accompanying preliminary pricing supplement for the securities above and links to the accompanying product supplement and accompanying prospectus for the securities under “Additional Information About BNS and the Securities” in the preliminary pricing supplement, which you should read and understand prior to investing in the securities.
The issuer has filed a registration statement (including a prospectus as supplemented by a prospectus supplement, product supplement and the preliminary pricing supplement) with the Securities and Exchange Commission (the “SEC”) for the offering to which this communication relates. Before you invest, you should read the accompanying prospectus in that registration statement and the other documents the issuer has filed with the SEC, including the accompanying preliminary pricing supplement and the accompanying prospectus supplement and product supplement, for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC website at 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 (212) 225-5678. Our Central Index Key, or CIK, on the SEC web site is 0000009631.
Risk Considerations
The risks set forth below are discussed in more detail in the “Risk Factors” section in the preliminary pricing supplement. Please review those risk factors carefully prior to making an investment decision.
Risks Relating to Return Characteristics
▪Risk of loss at maturity.
▪Contingent repayment of stated principal amount only at maturity.
▪You may not receive any contingent quarterly coupons.
▪Greater expected volatility with respect to the underlying stock generally reflects a higher contingent quarterly coupon and a higher expectation as of the pricing date that the final share price of the underlying stock could be less than the downside threshold price on the final determination date.
▪The securities are subject to reinvestment risk in the event of an early redemption.
▪The contingent quarterly coupon, if any, is based solely on the closing price or the final share price, as applicable.
▪Your potential return on the securities is limited, you will not participate in any appreciation of the underlying stock and you will not realize a return beyond the returns represented by the contingent quarterly coupons received, if any, during the term of the securities.
Risks Relating to Characteristics of the Underlying Stock
▪The securities are subject to risks associated with investments in single equity securities.
▪There can be no assurance that the investment view implicit in the securities will be successful.
▪There is no affiliation between BNS and the underlying stock issuer.
▪There is limited trading history for the underlying stock.
Risks Relating to Estimated Value and Liquidity
▪BNS’ initial estimated value of the securities at the time of pricing (when the terms of your securities are set on the pricing date) will be lower than the issue price of the securities.
▪Neither BNS’ nor SCUSA’s estimated value of the securities at any time is determined by reference to credit spreads or the borrowing rate BNS would pay for its conventional fixed-rate debt securities.
▪BNS’ initial estimated value of the securities does not represent future values of the securities and may differ from others’ (including SCUSA’s) estimates.
▪The securities have limited liquidity.
▪The price at which SCUSA would buy or sell your securities (if SCUSA makes a market, which it is not obligated to do) will be based on SCUSA’s estimated value of your securities.
▪The price of the securities prior to maturity will depend on a number of factors and may be substantially less than the stated principal amount.
Risks Relating to General Credit Characteristics
▪Payments on the securities are subject to the credit risk of BNS.
Risks Relating to Hedging Activities and Conflicts of Interest
▪Hedging activities by BNS and SCUSA may negatively impact investors in the securities and cause our respective interests and those of our clients and counterparties to be contrary to those of investors in the securities.
▪The calculation agent can make antidilution and other adjustments that may adversely affect the market value of, and any amounts payable on, the securities.
▪We, SCUSA and our other affiliates regularly provide services to, or otherwise have business relationships with, a broad client base, which has included and may include us and the underlying stock issuer and the market activities by us, SCUSA or our other affiliates for our or their own respective accounts or for our clients could negatively impact investors in the securities.
▪Activities conducted by BNS and its affiliates may impact the market price of the underlying stock and the value of the securities.
▪The calculation agent will have significant discretion with respect to the securities, which may be exercised in a manner that is adverse to your interests.
▪BNS and its affiliates may publish research or make opinions or recommendations that are inconsistent with an investment in the securities.
Risks Relating to Canadian and U.S. Federal Income Taxation
▪Uncertain tax treatment. Significant aspects of the tax treatment of the securities are uncertain. You should consult your tax advisor about your tax situation. See “Additional Information About the Securities — Tax Considerations” and “— Material Canadian Income Tax Consequences” in the preliminary pricing supplement.
Underlying Stock
For information about the underlying stock, including historical performance information, see “Information About the Underlying Stock” in the preliminary pricing supplement.
A-2
FAQ
What is the participation rate on Royal Bank of Canada’s basket-linked notes (RY)?
Do the RBC 2029 basket-linked notes guarantee principal?
Which stocks are in the 10-equity basket?
When do the notes mature and what is the valuation date?
Why is the initial estimated value ($975.36) below the $1,000 issue price?
Are the notes listed on an exchange?
How are U.S. investors taxed on these notes?
