Bank Nova Scotia SEC Filings

The Bank of Nova Scotia ("BNS") is issuing $12 million of senior, unsecured Autocallable Contingent Coupon Buffer Notes linked to the share price of the Invesco QQQ Trust (ticker: QQQ). The Notes price on 30-Jun-2025, settle on 3-Jul-2025, and mature on 6-Jul-2026 unless called earlier. They have a $1,000 face value, minimum purchase of $10,000, and will not be listed on any exchange.

Key economic terms

• Monthly contingent coupon of $10.80 (≈10.8% p.a.) payable only if QQQ’s closing value on the relevant Observation Date is ≥90% of the Initial Value ($548.09). Missed coupons accrue (“memory feature”) but are paid only when a future observation satisfies the barrier.
• Automatic call: The Notes are redeemed at par plus due coupons on any Observation Date before maturity if QQQ closes ≥ its Initial Value.
• Principal buffer: If not called, holders receive par at maturity provided QQQ’s final value is ≥90% of the Initial Value. Below that level, repayment is exposed to 1.1111× downside leverage (loss of ≈1.11% of principal for each 1% drop beyond the 10% buffer), up to total loss.
• Initial estimated value: $995.24 per $1,000, below the issue price, reflecting dealer margin and hedging costs.
• Underwriting fee: 0.10% ($12,000). SCUSA (BNS affiliate) and J.P. Morgan act as placement agents.

Risk highlights: Investors bear BNS credit risk; coupons are not guaranteed; capital is at risk below the 10% buffer; secondary-market liquidity is expected to be limited; the product’s value is sensitive to QQQ volatility, interest rates, and dealer hedging.

The Notes suit investors who are moderately bullish to neutral on QQQ over the next 12 months, can tolerate loss of principal, need no interim liquidity, and are comfortable with complex tax treatment.

Bank of Nova Scotia (BNS) has filed a Free Writing Prospectus for a new structured product—Accelerated Return Notes (ARNs)—linked to a diversified international equity index basket. The $10-denominated notes mature in roughly 14 months and reference six major indices: EURO STOXX 50 (40%), FTSE 100 (20%), Nikkei 225 (20%), Swiss Market Index (7.5%), S&P/ASX 200 (7.5%), and FTSE China 50 (5%).

Payout mechanics: • Investors receive 3-to-1 leveraged upside exposure to any basket appreciation, capped between $11.40 and $11.80 (14%-18% maximum return). • Downside exposure is linear and uncapped; a 1-for-1 loss in the basket can wipe out the entire principal. No interim coupon is paid.

Key structural features:

• Capped Value: Final value cannot exceed the stated range, limiting participation once the basket rises ~4.7-5.3%.
• Credit exposure: Payments depend on BNS’s ability to pay; if the bank defaults, investors could lose all capital regardless of market performance.
• Initial estimated value: Will be below the public offering price, reflecting fees, hedging costs, and issuer margin.
• Liquidity: Notes are not exchange-listed; secondary market, if any, may trade at prices below offering price and model value.

Investor profile: Suitable only for investors who expect modest international equity gains within 14 months, are comfortable with total downside risk, and prefer short-term, leveraged yet capped exposure over direct equity ownership.

Bank of Nova Scotia (BNS) is offering US$13.235 million of senior unsecured Contingent Income Auto-Callable Securities due 30-Jun-2028 linked to the common stock of Robinhood Markets, Inc. (HOOD). The notes are issued under BNS’ Senior Note Program, Series A and settle on 02-Jul-2025 (T+3).

Key economics

• Issue/Principal per note: $1,000; minimum investment one note.
• Contingent coupon: $50.00 per quarter (20% p.a.) paid only if the HOOD closing price on a determination date is ≥ the Downside Threshold Price (50% of the Initial Share Price); unpaid coupons accrue via a “memory” feature.
• Initial Share Price / Call Threshold Price: $83.03 (100% of initial).
• Downside Threshold Price: $41.515 (50% of initial).
• Automatic redemption: if HOOD ≥ Call Threshold Price on any of the first 11 quarterly observation dates, investors receive par plus the due coupon(s); after redemption no further payments are made.
• Maturity payment (if not called):
  • HOOD ≥ Downside Threshold → par plus due coupon(s).
  • HOOD < Downside Threshold → par x (Final/Initial price), exposing holders to a 1-for-1 downside; repayment may be <50% of par and could be zero.
• Scheduled observations: quarterly from 29-Sep-2025 to 27-Jun-2028; maturity 30-Jun-2028.

Fee & value disclosure

• Estimated value at pricing: $960.80, 3.9% below issue price due to sales commission ($17.50) and structuring fee ($5.00) paid to Morgan Stanley Wealth Management.
• Notes will not be listed; liquidity depends on Scotia Capital (USA) Inc. making a market but it is not obligated to do so.

Risk highlights

• Principal at risk. Investors may lose their entire investment if HOOD falls ≥50% at final observation.
• Conditional income. Coupons are not guaranteed; none are paid if HOOD stays below the 50% barrier.
• Credit risk. All payments depend on BNS’ ability to pay; the notes are senior unsecured and not CDIC-insured or bail-inable.
• Market & liquidity. No exchange listing, potentially wide bid/ask spreads, and value will reflect HOOD volatility, interest rates, time to maturity and BNS credit spreads.
• No upside participation. Investor return is capped at the received coupons; price appreciation of HOOD above par provides no additional benefit.

Underlying performance context

HOOD closed at $83.03 on 27-Jun-2025 (52-week high $84.52; low $16.42). Recent rapid appreciation increases coupon probability but also signals elevated volatility, raising the chance of large drawdowns that would forfeit coupons and erode principal.