Bank of Nova Scotia FWP: New EURO STOXX 50 Buffered Note with 32% Max Gain

Rhea-AI Filing Summary

Bank of Nova Scotia (BNS) plans to issue “Buffered Performance Leveraged Upside Securities” (Buffered PLUS) linked to the EURO STOXX 50® Index. The senior unsecured notes carry $1,000 stated principal per unit, price at par on 22 Jul 2025, and mature on 3 Feb 2028. Investors receive no periodic interest; returns are determined entirely at maturity.

Upside mechanics: the notes offer a 200% leverage on any positive index performance, but gains are capped at 32.00%, limiting maximum payment to $1,320. Downside protection: the first 15% decline is buffered; if the index ends ≤15% below its initial level, investors still receive full principal. Beyond that buffer, holders lose 1% of principal for each additional 1% decline, exposing them to losses of up to 85%.

Key structural features and risks: • No listing or secondary-market obligation, so liquidity may be limited. • The issuer’s initial estimated value (≈$930–$960) sits below issue price, reflecting embedded fees (≈$30 per unit) and hedging costs. • All payments depend on BNS’s creditworthiness. • The payout references only the index level on the single valuation date (31 Jan 2028); interim movements are irrelevant. • Investors face typical structured-note risks—including market, currency (euro-zone equities in USD terms), tax uncertainty, and conflicts arising from BNS/SCUSA hedging activities.

In short, the Buffered PLUS combine moderate downside cushioning with leveraged yet capped upside. They suit investors with a moderately bullish 2½-year view on the EURO STOXX 50 who can tolerate principal risk, illiquidity, and issuer credit exposure.

Insights

Structured Products Analyst

TL;DR: 200% upside to 32% cap, 15% buffer, potential 85% loss; credit and liquidity risks remain.

The Buffered PLUS offer a familiar risk/return profile: double leverage on positive index moves but a strict 32% ceiling. The 15% downside buffer gives modest protection, yet a 30% index drop still costs investors 15% of principal, and deeper drawdowns escalate quickly to a maximum 85% loss. With no coupon, carry is zero and opportunity cost is high if the index stagnates.

The indicative value (≈93–96% of par) highlights a 4–7% embedded cost, aligning with typical retail structured notes. Lack of exchange listing and discretionary market-making by SCUSA constrain exit routes; investors should be willing to hold to maturity. Credit exposure to BNS (rated high-A) is non-trivial over 2.5 years, though default risk is low relative to market risk.

Overall, this is a niche instrument for retail clients seeking leveraged equity exposure with some—but limited—downside mitigation. From a market-wide perspective, the filing is routine and does not materially alter BNS’s financial profile.

Portfolio Manager

TL;DR: Routine note issue; capped upside compromises risk-reward versus direct index exposure.

From an allocation standpoint, the product’s asymmetric payoff is unattractive relative to holding SX5E ETF plus risk management overlay. The 32% cap curtails participation in a strong European rally, whereas downside participation accelerates past −15%. Absent coupon income, the structure competes with risk-free yields near 4-5%, raising a high hurdle for outperformance.

Liquidity and valuation marks will be opaque between issuance and maturity, complicating portfolio reporting and risk measurement. For institutional accounts, the risk unit economics and administrative burden outweigh benefits; retail investors may appreciate the psychological comfort of the buffer, but they must grasp tail risks.

Impact on the broader market or BNS capital stack is negligible; issuance size is likely small and well within existing MTN programs.

 

ISSUER FREE WRITING PROSPECTUS Filed Pursuant to Rule 433 Registration Statement No. 333-282565 Dated June 25, 2025

Buffered PLUS Based on the Value of the EURO STOXX 50® Index due on or about February 3, 2028

Performance Leveraged Upside SecuritiesSM

Principal at Risk Securities

This document provides a summary of the terms of the Buffered Performance Leveraged Upside SecuritiesSM (the “Buffered PLUS”). Investors should carefully review the accompanying preliminary pricing supplement for the Buffered PLUS, the accompanying product supplement, the underlier supplement, the prospectus supplement and the prospectus, as well as the “Risk Considerations” section below, before making an investment decision.

The Buffered PLUS do not guarantee any return of principal at maturity and you could lose up to 85% of your investment. The Buffered PLUS are senior unsecured debt securities issued by The Bank of Nova Scotia (“BNS”), and all payments on the Buffered PLUS 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 index:	EURO STOXX 50® Index (Bloomberg Ticker: “SX5E”)
Stated principal amount:	$1,000.00 per Buffered PLUS
Issue price:	$1,000.00 per Buffered PLUS
Minimum investment:	$1,000.00 (1 Buffered PLUS)
Interest:	None
Pricing date:	July 17, 2025
Original issue date:	July 22, 2025 (3 business days after the pricing date; see preliminary pricing supplement).
Valuation date:	January 31, 2028, subject to postponement for certain market disruption events and as described in the accompanying product supplement.
Maturity date:	February 3, 2028, subject to postponement for certain market disruption events and as described in the accompanying product supplement.
Payment at maturity per Buffered PLUS:	￭  If the final index value is greater than the initial index value: $1,000.00 + leveraged upside payment In no event will the payment at maturity exceed the maximum payment at maturity. ￭  If the final index value is less than or equal to the initial index value, but not by more than the buffer amount: $1,000.00 ￭  If the final index value is less than the initial index value by more than the buffer amount: $1,000.00 + [$1,000.00 × (underlying return + buffer amount)] If the final index value is less than the initial index value by more than the buffer amount, you will lose 1% for every 1% that the final index value falls below the initial index value in excess of the buffer amount and could lose up to 85% of your investment in the Buffered PLUS.
Buffer amount:	15%
Underlying return:	(final index value – initial index value) / initial index value
Leverage factor:	200%
Leveraged upside payment:	$1,000.00 × leverage factor × underlying return
Maximum gain:	32.00%
Maximum payment at maturity:	$1,320.00 per Buffered PLUS (132.00% of the stated principal amount)
Initial index value:	The index closing value of the underlying index on the pricing date
Final index value:	The index closing value of the underlying index on the valuation date
CUSIP/ISIN:	06418VZF4 / US06418VZF48
Listing:	The Buffered PLUS will not be listed or displayed on any securities exchange or any electronic communications network.
Commission:	$30.00 per stated principal amount.
Estimated value on the pricing date:	Expected to be between $929.91 and $959.91 per Buffered PLUS. See “Risk Factors” in the preliminary pricing supplement.
Preliminary pricing supplement	http://www.sec.gov/Archives/edgar/data/9631/000183988225034566/bns_424b2-18786.htm

 

HYPOTHETICAL PAYOUT

 

The below figures are based on the leverage factor of 200% and maximum gain of 32.00% and are purely hypothetical (the actual terms of your Buffered PLUS will be determined on the pricing date and will be specified in the final pricing supplement).

Hypothetical Payment at Maturity

Underlying Return	Payment at Maturity
+40.00%	$1,320.00
+30.00%	$1,320.00
+20.00%	$1,320.00
+16.00%	$1,320.00
+15.00%	$1,300.00
+10.00%	$1,200.00
+5.00%	$1,100.00
0.00%	$1,000.00
-5.00%	$1,000.00
-10.00%	$1,000.00
-15.00%	$1,000.00
-20.00%	$950.00
-30.00%	$850.00
-40.00%	$750.00
-50.00%	$650.00
-75.00%	$400.00
-100.00%	$150.00

A-1

 

You will find a link to the accompanying preliminary pricing supplement for the Buffered PLUS above and links to the accompanying product supplement, underlier supplement, prospectus supplement and prospectus for the Buffered PLUS under “Additional Information About BNS and the Buffered PLUS” in the preliminary pricing supplement, which you should read and understand prior to investing in the Buffered PLUS.

The issuer has filed a registration statement (including a prospectus as supplemented by a prospectus supplement, underlier 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, underlier 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

▪You may lose up to 85% of your investment in the Buffered PLUS.

▪The stated payout from the issuer applies only at maturity.

▪Your potential return on the Buffered PLUS is limited to the maximum gain.

▪You will not receive any interest payments.

▪The amount payable on the Buffered PLUS is not linked to the value of the underlying index at any time other than the valuation date.

▪Owning the Buffered PLUS is not the same as owning the index constituent stocks.

Risks Relating to Characteristics of the Underlying Index

▪An investment in the Buffered PLUS involves market risk associated with the underlying index.

▪There can be no assurance that the investment view implicit in the Buffered PLUS will be successful.

▪The Buffered PLUS will not be adjusted for changes in exchange rates related to the U.S. dollar.

▪The Buffered PLUS are subject to non-U.S. securities market risk.

▪The underlying index reflects price return, not total return.

▪Changes affecting the underlying index could have an adverse effect on the market value of, and any amount payable on, the Buffered PLUS.

▪There is no affiliation between the index sponsor and BNS, and BNS is not responsible for any disclosure by such index sponsor.

▪Governmental regulatory actions, such as sanctions, could adversely affect your investment in the Buffered PLUS.

Risks Relating to Estimated Value and Liquidity

▪BNS’ initial estimated value of the Buffered PLUS at the time of pricing (when the terms of your Buffered PLUS are set on the pricing date) will be lower than the issue price of the Buffered PLUS.

▪Neither BNS’ nor SCUSA’s estimated value of the Buffered PLUS 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 Buffered PLUS does not represent future values of the Buffered PLUS and may differ from others’ (including SCUSA’s) estimates.

▪The Buffered PLUS have limited liquidity.

▪The price at which SCUSA would buy or sell your Buffered PLUS (if SCUSA makes a market, which it is not obligated to do) will be based on SCUSA’s estimated value of your Buffered PLUS.

▪The price of the Buffered PLUS 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 Buffered PLUS 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 Buffered PLUS and cause our respective interests and those of our clients and counterparties to be contrary to those of investors in the Buffered PLUS.

▪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 index constituent stock issuers 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 Buffered PLUS.

▪Activities conducted by BNS and its affiliates may impact the value of the underlying index and the value of the Buffered PLUS.

▪The calculation agent will have significant discretion with respect to the Buffered PLUS, 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 Buffered PLUS.

Risks Relating to Canadian and U.S. Federal Income Taxation

▪Uncertain tax treatment. Significant aspects of the tax treatment of the Buffered PLUS are uncertain. You should consult your tax advisor about your tax situation. See “Additional Information About the Buffered PLUS — Tax Considerations” and “— Material Canadian Income Tax Consequences” in the preliminary pricing supplement.

Underlying Index

For information about the underlying index, including historical performance information, see “Information About the Underlying Index” in the preliminary pricing supplement.

A-2