TD Offers 2-Year Capped Notes: 10% Buffer, 18-22% Max Gain

Toronto-Dominion Bank (TD) is marketing two-year, $10 par value Capped Notes with an Absolute Return Buffer linked to the MSCI® Emerging Markets Index (MXEF).

Rhea-AI Filing Summary

Toronto-Dominion Bank (TD) is marketing two-year, $10 par value Capped Notes with an Absolute Return Buffer linked to the MSCI® Emerging Markets Index (MXEF). At maturity, investors receive:

• Upside participation: 1-to-1 exposure to index appreciation, capped at a redemption value between $11.80 and $12.20 (18%-22% maximum gain).
• Buffer on moderate declines: If the index ends between 90% and 100% of its starting level, the notes pay the absolute value of the decline (e.g., -5% index = +5% note return).
• Downside risk: For index drops beyond 10%, the notes lose value point-for-point, exposing up to 90% of principal.

The notes pay no coupons, are not listed on any exchange, and their value depends on TD’s creditworthiness. The initial estimated value set on pricing will be below the public offering price, implying immediate negative yield if sold prior to maturity. Investors also face emerging-market equity, currency, and liquidity risks. Full terms, tax considerations, and risk factors are contained in the linked preliminary prospectus and product supplement.

Positive

• 10% downside buffer converts moderate index declines into positive returns, offering limited protection versus direct equity exposure.
• 18%-22% maximum upside over two years provides leveraged participation in emerging-market gains until the cap is reached.

Negative

• Up to 90% principal loss if MXEF falls more than 10% by maturity.
• Return is capped; investors forego gains above 18%-22%, underperforming direct index ownership in strong markets.
• No secondary-market liquidity or exchange listing may force investors to hold to maturity.
• Credit exposure to TD; deterioration in the bank’s credit spreads can depress note value.
• Initial estimated value below offer price embeds an immediate cost to investors.
• No periodic interest, lowering total return in flat markets.

Insights

Structured-Products Analyst

TL;DR Two-year MXEF-linked notes offer 10% downside buffer and 18%-22% upside cap; principal risk remains significant and liquidity is limited.

Analysis: The structure suits investors seeking tactical emerging-market exposure with some protection against moderate declines. The 10% absolute-value buffer converts small losses into gains, but once breached, losses accelerate 1-for-1 down to 10 cents on the dollar. A capped maximum return of 18%-22% limits upside compared with direct MXEF ownership. Lack of periodic income and estimated issue-price premium reduce risk-adjusted appeal. Credit risk is remote for an AA-rated Canadian bank, yet still present. Overall, risk/return trade-off is neutral for diversified portfolios and not material to TD’s earnings.

FAQ

What is the maturity and principal amount of TD's Capped Notes?

The notes mature in approximately two years and are issued at $10 per unit.

How much upside can investors earn on the TD Capped Notes?

Upside is limited to the Capped Value of $11.80-$12.20, representing an 18%-22% maximum gain over principal.

What downside protection do the notes provide?

The structure offers a 10% absolute return buffer; declines beyond this threshold reduce principal 1-to-1.

Are interest payments made during the term?

No. The notes pay no periodic coupons; all returns are realized at maturity.

Is there credit risk to investors in these TD notes?

Yes. Payments depend on TD’s creditworthiness; a TD default could result in partial or total loss.

Will the TD Capped Notes be listed on an exchange?

No exchange listing is planned, so secondary-market liquidity may be limited.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Accepted by SEC EDGAR 07/03/2025 - 03:45 PM Learn about SEC filing dates

Filed Pursuant to Rule 433
Registration Statement No. 333-283969

CAPPED NOTES WITH ABSOLUTE RETURN BUFFER (CAPPED NOTES)

Capped Notes with Absolute Return Buffer Linked to the MSCI^® Emerging Markets Index^SM

	Issuer		The Toronto-Dominion Bank (“TD”)
	Principal Amount		$10.00 per unit
	Term		Approximately two years
	Market Measure		The MSCI® Emerging Markets IndexSM (Bloomberg symbol: “MXEF”)
	Payout Profile at Maturity		●  1-to-1 upside exposure to increases in the Market Measure, subject to the Capped Value ●    A positive return equal to the absolute value of the percentage decline in the level of the Market Measure only if the Market Measure does not decline by more than 10.00% (e.g., if the negative return of the Market Measure is -5%, you will receive a positive return of +5%) ●  1-to-1 downside exposure to decreases in the Market Measure beyond a 10.00% decline, with up to 90.00% of your principal at risk
	Capped Value		[$11.80 to $12.20] per unit, a [18.00% to 22.00%] return over the principal amount, to be determined on the pricing date
	Threshold Value		90.00% of the Starting Value
	Interest Payments		None
	Preliminary Offering Documents		http://www.sec.gov/Archives/edgar/data/947263/000114036125024821/ef20051594_424b3.htm
	Exchange Listing		No

You should read the relevant Preliminary Offering Documents before you invest. Click on the Preliminary Offering Documents hyperlink above or call your Financial Advisor for a hard copy.

Risk Factors

Please see the Preliminary Offering Documents for a description of certain risks related to this investment, including, but not limited to, the following:

● Depending on the performance of the Market Measure as measured shortly before the maturity date, your investment may result in a loss; there is no guaranteed return of principal.

● Payments on the notes are subject to the credit risk of TD, and actual or perceived changes in the creditworthiness of TD are expected to affect the value of the notes. If TD becomes unable to meet its financial obligations as they become due, you may lose some or all of your investment.

● Your potential for a positive return based on the depreciation of the Market Measure is limited and may be less than that of a comparable investment that takes a short position directly in the Market Measure (or the stocks included in the Market Measure). The absolute value return feature applies only if the Ending Value is less than the Starting Value but greater than or equal to the Threshold Value. Because the Threshold Value is 90.00% of the Starting Value, any positive return due to the depreciation of the Market Measure is limited to 10.00%. Any decline in the Ending Value from the Starting Value by more than 10.00% will result in a loss, rather than a positive return, on the notes. In contrast, for example, a short position in the Market Measure (or the stocks included in the Market Measure) would allow you to receive the full benefit of any decrease in the level of the Market Measure (or the stocks included in the Market Measure).

● Your investment return based on any increase in the level of the Market Measure is limited to the return represented by the Capped Value and may be less than a comparable investment directly in the stocks included in the Market Measure.

● The initial estimated value of the notes on the pricing date will be less than their public offering price.

● The initial estimated value of your notes is not a prediction of the prices at which you may sell your notes in the secondary market, if any exists, and such secondary market prices, if any, will likely be less than the public offering price of your notes, may be less than the initial estimated value of your notes and could result in a substantial loss to you.

● You will have no rights of a holder of the securities represented by the Market Measure, and you will not be entitled to receive securities or dividends or other distributions by the issuers of those securities.

● The value of, and your return on, the notes may be affected by factors affecting the international securities markets, specifically changes in the countries represented by the Market Measure. In addition, you will not obtain the benefit of any increase in the value of the currencies in which the securities in the Index trade against the U.S. dollar which you would have received if you had owned the securities in the Market Measure during the term of your notes, although the level of the Market Measure may be adversely affected by general exchange rate movements in the market.

● There are risks associated with emerging markets.

Final terms will be set on the pricing date within the given range for the specified Market-Linked Investment. Please see the Preliminary Offering Documents for complete product disclosure, including related risks and tax disclosure.

The graph above and the table below reflect the hypothetical return on the notes, based on the terms contained in the table to the left (using the mid-point for any range(s)). The graph and table have been prepared for purposes of illustration only and do not take into account any tax consequences from investing in the notes.

Hypothetical Percentage Change from the Starting Value to the Ending Value	Hypothetical Redemption Amount per Unit	Hypothetical Total Rate of Return on the Notes
-100.00%	$1.00	-90.00%
-75.00%	$3.50	-65.00%
-50.00%	$6.00	-40.00%
-40.00%	$7.00	-30.00%
-30.00%	$8.00	-20.00%
-20.00%	$9.00	-10.00%
-10.00%(1)	$11.00	10.00%
-5.00%	$10.50	5.00%
0.00%	$10.00	0.00%
10.00%	$11.00	10.00%
20.00%	$12.00(2)	20.00%
30.00%	$12.00	20.00%
40.00%	$12.00	20.00%
50.00%	$12.00	20.00%

(1) This hypothetical percentage change corresponds to the Threshold Value.

(2) Any positive return based on the appreciation of the Market Measure cannot exceed the hypothetical Capped Value.

TD has filed a registration statement (including a product supplement and a prospectus) with the U.S. Securities and Exchange Commission (the “SEC”) for the offering to which this term sheet relates. Before you invest, you should read the Note Prospectus, including this term sheet, and the other documents that TD has filed with the SEC, for more complete information about TD and this offering. You may get these documents without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, TD, any agent, or any dealer participating in this offering will arrange to send you these documents if you so request by calling MLPF&S or BofAS toll-free at 1-800-294-1322.