New Defense Stock-Linked Investment Product Offers 90% Principal Protection
Rhea-AI Filing Summary
Bank of Nova Scotia announces Market Linked Securities tied to a Defense Basket due July 21, 2028. The securities offer upside participation to a cap with partial principal protection. Key features include:
- Face amount of $1,000 per security with 90% principal protection ($900 minimum payment)
- Linked to an equally-weighted basket of defense stocks: Lockheed Martin (33.34%), Northrop Grumman (33.33%), and RTX Corporation (33.33%)
- Maximum return capped at at least 40% ($1,400 per security)
- 100% upside participation rate up to the cap
- Estimated value between $925.48-$955.48 per $1,000 face amount
Notable risks include: potential 10% principal loss, no periodic interest payments, limited returns due to cap, credit risk of the Bank, and sector concentration in defense industry. The securities will be distributed through Scotia Capital USA and Wells Fargo Securities with selling concessions up to 2.00%.
Positive
- Offers 100% upside participation in a defense sector basket up to a generous cap of at least 40% return
- Principal is partially protected with minimum payment of 90% ($900 per $1,000) at maturity, limiting downside risk
- Provides diversified exposure to major defense contractors (Lockheed Martin, Northrop Grumman, RTX) through a single instrument
Negative
- No periodic interest payments, potentially reducing income compared to traditional bonds
- Maximum return is capped at 40%, limiting upside potential in strong bull markets
- Investors can lose up to 10% of principal if the basket declines, unlike traditional fixed-income securities
- Estimated initial value ($925.48-$955.48) is significantly below the offering price ($1,000), indicating substantial embedded costs
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What is BNS's new Market Linked Securities offering linked to defense stocks?
What is the maximum return potential for BNS's new defense-linked securities?
What is the estimated value of BNS's new Market Linked Securities?
What are the key risks of BNS's defense basket-linked securities?
What are the important dates for BNS's new Market Linked Securities offering?
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Filed Pursuant to Rule 433 Dated June 27, 2025 Registration No. 333-282565 |
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The Bank of Nova Scotia Senior Note Program, Series A Equity Index Linked Securities |
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Market Linked Securities –Upside Participation to a Cap and Partial Principal Return at Maturity
Principal at Risk Securities Linked to a Defense Basket due July 21, 2028
Term Sheet to the Preliminary Pricing Supplement dated June 27, 2025
Summary of Terms
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Issuer |
The Bank of Nova Scotia (the “Bank”) |
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Market Measure |
An approximately equally-weighted basket (the “Basket”) comprised of the common stock of Lockheed Martin Corporation (33.34%), the common stock of Northrop Grumman Corporation (33.33%) and the common stock of RTX Corporation (33.33%) |
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Pricing Date* |
July 18, 2025 |
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Issue Date* |
July 23, 2025 |
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Face Amount (Original Offering Price) |
$1,000 per security |
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Maturity Payment Amount (per Security) |
●If the ending level is greater than the starting level, $1,000 plus the lesser of: (i) $1,000 × basket return × upside participation rate; and (ii) the maximum return; or ●If the ending level is less than the threshold level, the greater of: (i) $1,000 + ($1,000 × basket return); and (ii) the minimum payment at maturity |
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Calculation Day* |
July 18, 2028, subject to postponement. |
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Stated Maturity Date* |
July 21, 2028, subject to postponement |
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Starting Level |
100.00 |
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Ending Level |
Calculated based on the weighted returns of the basket components and will be equal to the product of (i) 100.00 and (ii) an amount equal to 1 plus the sum of: (A) 33.34% of the component return of Lockheed Martin Corporation; (B) 33.33% of the component return of RTX Corporation; and (C) 33.33% of the component return of Northrop Grumman Corporation |
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Maximum Return: |
At least 40.00% of the face amount per security (at least $400.00 per security) (the actual maximum return will be determined on the pricing date). As a result of the maximum return, the maximum maturity payment amount will be at least $1,400.00 per security. |
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Minimum Payment at Maturity: |
$900.00 per security (90% of the face amount) |
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Upside Participation Rate: |
100% |
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Basket Return: |
The quotient of (i) ending level minus the starting level divided by (ii) the starting level (expressed as a percentage) |
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Component Return: |
For each basket component, the quotient of (i) its final component price minus its initial component price divided by (ii) its initial component price (expressed as a percentage) |
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Initial Component Level: |
For each basket component, its stock closing price on the pricing date |
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Final Component Level: |
For each basket component, its stock closing price on the calculation day |
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Calculation Agent |
Scotia Capital Inc., an affiliate of the Bank |
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Denominations |
$1,000 and any integral multiple of $1,000 |
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Agents** |
Scotia Capital (USA) Inc. and Wells Fargo Securities, LLC (“WFS”). WFS will receive a discount of up to 2.825%; dealers, including Wells Fargo Advisors, LLC (“WFA”), may receive a selling concession of up to 2.00%, and WFA may receive a distribution expense fee of 0.075%. |
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CUSIP / ISIN |
06418VZM9 / US06418VZM98 |
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Material Canadian and U.S. Tax Consequences |
See the preliminary pricing supplement. |
* Subject to change.
** In respect of certain securities, we may pay a fee of up to $2.00 per security to selected securities dealers for marketing and other services in connection with the distribution of the securities to other securities dealers.
Hypothetical Payout Profile
If the ending level is less than the starting level, you will have 1-to-1 downside exposure to the first 10% decrease in the level of the Basket from the starting level to the ending level and you may lose up to 10% of the face amount.
Unlike ordinary debt securities, the securities do not pay interest or repay a fixed amount of principal at maturity. Instead, the securities provide for a maturity payment amount that may be greater than, equal to or less than the face amount of the securities, depending on the performance of the Index from its starting level to its ending level.
If the securities priced today, the estimated value of the securities would be between $925.48 (92.548%) and $955.48 (95.548%) per $1,000 face amount. See “The Bank’s Estimated Value of the Securities” in the preliminary pricing supplement.
Preliminary pricing supplement:
http://www.sec.gov/Archives/edgar/data/9631/000183988225035307/bns_424b2-19105.htm
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The securities have complex features and investing in the securities involves risks not associated with an investment in conventional debt securities. See “Selected Risk Considerations” in this term sheet, “Selected Risk Considerations” in the preliminary pricing supplement and “Risk Factors” in the product supplement, prospectus supplement and prospectus. This introductory term sheet does not provide all the information that an investor should consider prior to making an investment decision. This term sheet should be read in conjunction with the preliminary pricing supplement, product supplement, prospectus supplement, and prospectus. NOT A BANK DEPOSIT AND NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY |
Selected Risk Considerations
The risks set forth below are discussed in detail in “Selected Risk Considerations” in the preliminary pricing supplement and “Risk Factors” in the product supplement, prospectus supplement and prospectus. Please review those risk disclosures carefully.
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Risks Relating To The Securities Generally ●If The Ending Level Is Less Than The Starting Level, You Will Lose Some, And Possibly Up To 10%, Of The Face Amount Of Your Securities At Maturity. ●No Periodic Interest Will Be Paid On The Securities. ●Your Return Will Be Limited To The Maximum Return And May Be Lower Than The Return On A Direct Investment In The Basket Or The Basket Components. ●Changes In The Stock Closing Prices Of The Basket Components May Offset Each Other. ●You Will Be Subject To Risks Resulting From The Relationship Among The Basket Components. Risks Relating To An Investment In the Bank’s Debt Securities, Including The Securities ●Your Investment Is Subject To The Credit Risk Of The Bank. Risks Relating To The Estimated Value Of The Securities And Any Secondary Market ●The Inclusion Of Dealer Spread And Projected Profit From Hedging In The Original Offering Price Is Likely To Adversely Affect Secondary Market Prices. ●The Bank's Estimated Value Of The Securities Will Be Lower Than The Original Offering Price Of The Securities. ●The Bank's Estimated Value Does Not Represent Future Values Of The Securities And May Differ From Others' Estimates. ●The Bank's Estimated Value Is Not Determined By Reference To Credit Spreads For Our Conventional Fixed-Rate Debt. ●If The Level Of The Basket Changes, The Market Value Of Your Securities May Not Change In The Same Manner. ●The Price At Which The Securities May Be Sold Prior To Maturity Will Depend On A Number Of Factors And May Be Substantially Less Than The Amount For Which They Were Originally Purchased. ●The Securities Lack Liquidity. Risks Relating To The Basket And The Basket Components ●The Securities Are Subject To The Single Stock Risk Of Each Basket Component. ●The Securities Are Subject To Sector Concentration Risk. ●Investing In The Securities Is Not The Same As Investing In The Basket Components. ●Historical Values Of A Market Measure Should Not Be Taken As An Indication Of The Future Performance Of Such Market Measure During The Term Of The Securities. ●The Securities May Become Linked To The Common Stock Of A Company Other Than An Original Underlying Stock Issuer. ●We, The Agents And Our Or Their Respective Affiliates Cannot Control Actions By An Underlying Stock Issuer. ●None Of Us, The Agents Or Our Or Their Respective Affiliates Have Any Affiliation With Any Underlying Stock Issuer Or Have Independently Verified Their Public Disclosure Of Information. ●You Have Limited Anti-dilution Protection. |
Risks Relating To Hedging Activities And Conflicts Of Interest ●A Participating Dealer Or Its Affiliates May Realize Hedging Profits Projected By Its Proprietary Pricing Models In Addition To Any Selling Concession And/Or Any Distribution Expense Fee, Creating A Further Incentive For The Participating Dealer To Sell The Securities To You. ●Hedging Activities By The Bank And/Or The Agents 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. ●Market Activities By The Bank Or The Agents For Their Own Respective Accounts Or For Their Respective Clients Could Negatively Impact Investors In The Securities. ●The Bank, The Agents And Their Respective Affiliates Regularly Provide Services To, Or Otherwise Have Business Relationships With, A Broad Client Base, Which Has Included And May Include Issuers Of An Underlying Stock, The Sponsor Or Investment Advisor For A Fund And/Or The Issuers Of Securities Included In An Index Or Held By A Fund. ●Other Investors In The Securities May Not Have The Same Interests As You. ●There Are Potential Conflicts Of Interest Between You And The Calculation Agent. ●The Stated Maturity Date May Be Postponed If The Calculation Day Is Postponed. Risks Relating To Canadian And U.S. Federal Income Taxation ●The Tax Consequences Of An Investment In The Securities Are Unclear. Significant aspects of the tax treatment of the securities are uncertain. You should consult your tax advisor about your tax situation. See “Canadian Income Tax Consequences” and “U.S. Federal Income Tax Consequences” in the preliminary pricing supplement. |
The Bank has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Bank has filed with the SEC for more complete information about the Bank and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the Bank, any Underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling your financial advisor or by calling Wells Fargo Securities, LLC at 866-346-7732.
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.
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