Bank Nova Scotia SEC Filings

The Bank of Nova Scotia (NYSE: BNS) is marketing five-year Capped Buffered Return Notes linked to the price return of the S&P 500 Index, scheduled to price on July 28 2025 and mature on August 1 2030. The securities are senior, unsecured obligations and all cash flows are subject to the Bank’s credit risk.

Key economic terms

• Principal Amount: $1,000 per Note; minimum investment $1,000.
• Upside Participation: 1:1 on any positive Reference Asset Return, capped by a Maximum Return of at least 67.50 % (final rate set on Trade Date). Maximum payment therefore equals ≤ $1,675 per Note.
• Downside Protection: 15 % Buffer. Investors receive full principal back if the S&P 500 final level is down ≤ 15 %. Below that, loss is linear; worst-case repayment equals $150 (-85 %).
• No periodic coupons and no interim principal repayments.
• Issue price 100 % of face; estimated value $908.59–$938.59, reflecting dealer discount (up to 3.50 %) and hedging costs.
• Liquidity: not listed; Scotia Capital (USA) Inc. may make a market but is not obliged to do so.
• Credit ranking: pari passu with BNS’s other senior unsecured debt; not CDIC/FDIC insured; not bail-inable.
• Tax call: the Bank may redeem early only upon specified adverse tax changes.

Investment profile

The structure suits investors who expect the S&P 500 to be flat-to-moderately positive over the next five years, seek partial downside protection, can forgo dividends, accept a hard cap on upside, and are comfortable with BNS credit risk and limited liquidity. The 15 % Buffer offers conditional protection, yet the initial estimated value shows an immediate 6–9 % “premium” embedded in the price. If the index rises more than roughly 67.5 %, holders surrender excess gains. If it falls more than 15 %, capital erosion accelerates 1-for-1 down to an 85 % maximum loss.

Risk highlights

• Credit exposure to BNS throughout the term.
• Capped upside versus direct equity exposure.
• No income; total return entirely realized at maturity.
• Secondary market, if any, expected to trade at a discount because of dealer spread and model value.
• Complex U.S./Canadian tax treatment; potential Section 871(m) and FATCA considerations for non-U.S. holders.

Cost and conflicts

Scotia Capital, an affiliate of the issuer and calculation agent, will receive underwriting compensation and may engage in hedging and market-making activities, creating potential conflicts of interest and price impacts.

The Bank of Nova Scotia (BNS) is marketing senior unsecured Trigger Autocallable Notes linked to the Nasdaq-100 Index (NDX). The preliminary terms outline a five-year structure (trade date 18 Jul 2025, maturity 23 Jul 2030) with quarterly observation dates beginning after the first year. The note is automatically called if NDX closes at or above the initial level (the call threshold) on any observation date. If called, investors receive the principal plus a fixed ‘call return’; the return accrues at 7.80 % – 8.45 % per annum and rises from 7.80 % after one year to a maximum 39 % at final maturity.

• Face amount: $10 per note; minimum purchase 100 notes ($1,000).
• Downside threshold: 75 % of the initial NDX level. If the notes are not called and NDX closes below this barrier on the final valuation date, principal is reduced one-for-one with the index decline; investors could lose their entire investment.
• Credit exposure: Payments depend solely on BNS’s ability to pay; the notes are not CDIC or FDIC insured and are not bail-inable under Canadian law.
• Estimated value: $9.27 – $9.57, below the $10 issue price, reflecting structuring and distribution costs and BNS’s internal funding rate.
• Distribution: Scotia Capital (USA) will sell to UBS at a $0.25 per-note discount; both firms may act as market makers but are not obliged to provide liquidity.

Key risk factors highlighted by the issuer include: (i) loss of principal if the downside threshold is breached at maturity; (ii) no periodic interest; (iii) limited secondary market and potential bid-ask concessions; (iv) early call reinvestment risk; (v) valuation and hedging conflicts of interest; (vi) tax uncertainty for both U.S. and non-U.S. holders.

Investor profile: the notes suit investors who expect NDX to stay flat or rise modestly, are comfortable with equity-linked downside, can tolerate illiquidity, and are willing to rely on BNS credit. They are unsuitable for investors seeking full principal protection, dividend participation, or unlimited upside.

Overall, the product offers a clearly defined, capped return path in exchange for significant downside and credit risk—effectively transforming equity exposure into a fixed call payoff profile funded at a small discount to par.