TD issues auto-callable 10%-buffered notes tied to Russell 2000
Toronto-Dominion Bank (TD) has filed a Free Writing Prospectus for Market Linked, Auto-Callable, Fixed-Percentage Buffered Downside Principal-at-Risk Securities tied to the Russell 2000 Index (RTY), maturing 19 July 2029.
Rhea-AI Filing Summary
Toronto-Dominion Bank (TD) has filed a Free Writing Prospectus for Market Linked, Auto-Callable, Fixed-Percentage Buffered Downside Principal-at-Risk Securities tied to the Russell 2000 Index (RTY), maturing 19 July 2029.
Key terms
- Face amount: US$1,000 per security; denominations of US$1,000 and integral multiples.
- Pricing / issue dates*: 16 Jul 2025 / 21 Jul 2025.
- Automatic call feature: Called if the Index closing level on any annual call date is ≥ starting level. Investors receive face amount plus a fixed call premium: ≥8.64% (2026), ≥17.28% (2027), ≥25.92% (2028), and ≥34.56% (final call in 2029).
- Downside protection: 10% buffer. If not called and Index ends < starting level but ≥90%, investors receive US$1,000. If <90%, loss matches decline beyond 10%, up to a 90% loss of principal.
- No periodic coupons; return limited to call premiums—no participation in Index appreciation beyond those amounts.
- Estimated value at pricing: US$923–US$963, below public offering price.
- Agent economics: Up to 2.575% discount; selling concession up to 2.00%; WFA distribution fee 0.075%.
- Threshold / buffer level: 90% of starting level (10% buffer).
- Credit risk: Payments depend on TD’s ability to pay; product is not FDIC or CDIC insured.
- CUSIP/ISIN: 89115HJK4 / US89115HJK41.
Principal risks (selected)
- Up to 90% principal loss if Index falls below threshold and securities are not called.
- No periodic interest; upside capped at call premium.
- Reinvestment, liquidity, secondary-market and valuation risks; estimated value < offering price.
- TD credit risk and potential conflicts as calculation agent.
- Complex tax treatment for U.S. and Canadian investors.
Full risk discussion appears in the preliminary pricing supplement, product supplement MLN-WF-1 (26 Feb 2025) and the base prospectus.
Positive
- Fixed annual call premiums of at least 8.64% to 34.56% offer predefined return potential if the Index is flat or up.
- 10% downside buffer shields initial losses if the Russell 2000 falls modestly.
- Early redemption feature can shorten exposure and enhance effective annualized yield.
Negative
- Principal risk up to 90% if the Index declines more than 10% and the note is not called.
- Upside capped at the call premium—no participation beyond fixed percentages.
- No periodic interest payments, reducing income certainty.
- Estimated value (US$923–US$963) is below the US$1,000 offering price, indicating structuring costs to investors.
- Limited liquidity; secondary market prices likely below issue price.
- Full exposure to TD credit risk; securities are not FDIC/CDIC insured.
Insights
TL;DR – Medium-risk auto-callable note offers 8.64%–34.56% capped upside and 10% buffer; downside to –90%, estimated value below par.
This FWP details an equity-linked note aimed at yield-seeking investors willing to accept limited upside and significant downside for annual call premiums. The staggered premiums—8.64% to 34.56%—are attractive relative to short-dated yields, but the 10% buffer provides only modest protection if the small-cap Russell 2000 index corrects. Absence of coupons, capped returns, liquidity constraints and TD credit exposure temper the appeal. The bank’s estimated value (US$923–US$963) highlights typical structuring costs and margins. Overall, the product is standard fare in market-linked issuance, with neutral credit impact on TD but notable suitability and market-risk considerations for investors.
TL;DR – Product poses limited issuer impact but exposes holders to TD credit, valuation gap and liquidity risks.
From a credit standpoint, the offering is immaterial to TD’s balance sheet; proceeds add wholesale funding at standard spreads. For investors, primary risks include (1) full issuer credit exposure, (2) estimated value 3.7%–7.7% below issue price, (3) potential 90% capital loss if RTY drops >10%, and (4) uncertain secondary market. The auto-call structure benefits TD via cheap optionality—if the index rallies modestly, TD redeems early, reducing duration and funding cost. Given the well-known risk/return trade-off, I assign a neutral impact rating for TD, negative-to-neutral for retail buyers depending on market view.
FAQ
What is the underlying index for TD's auto-callable buffered securities?
The securities are linked to the Russell 2000 Index (RTY).
How much can investors earn if the note is called in 2026?
If automatically called on 21 Jul 2026, investors receive the US$1,000 face amount plus at least 8.64% (≥US$86.40) call premium.
What downside protection do the securities offer?
There is a 10% buffer; principal loss begins only if the Index ends below 90% of the starting level.
What happens at maturity if the Index falls 25%?
If not called and the Index ends down 25%, holders lose the decline beyond the 10% buffer, resulting in a 15% principal loss (receive US$850).
Why is the estimated value lower than the offering price?
TD’s internal models place the value at US$923–US$963 due to structuring costs, hedging and the bank’s funding rate.
Are these securities insured or principal-protected?
No. They are not FDIC or CDIC insured and carry up to 90% principal risk.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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Filed Pursuant to Rule 433
Registration Statement No. 333-283969
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Dated July 7, 2025
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Market Linked Securities – Auto-Callable with Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to Russell 2000® Index due July 19, 2029
Term Sheet to Preliminary Pricing Supplement dated July 7, 2025
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Summary of Terms
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Issuer:
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The Toronto-Dominion Bank (the “Bank”)
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Underwriters:
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TD Securities (USA) LLC and Wells Fargo Securities, LLC
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Market Measure:
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Russell 2000® Index (the “Index”) (Bloomberg Ticker: RTY)
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Pricing Date*:
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July 16, 2025
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Issue Date*:
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July 21, 2025
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Face Amount and
Original Offering Price:
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$1,000 per security
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Automatic Call:
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If the closing level of the Index on any call date is greater than or equal to the starting level, the securities will be automatically called, and on the related call settlement date
you will be entitled to receive a cash payment per security in U.S. dollars equal to the face amount plus the call premium applicable to the relevant call date.
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Call Dates* and Call
Premiums
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Call Date
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Call Premium* | |||
| July 21, 2026 |
At least 8.64% of the face amount
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| July 21, 2027 |
At least 17.28% of the face amount
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July 21, 2028
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At least 25.92% of the face amount
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July 16, 2029 (the “final calculation day)
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At least 34.56 % of the face amount
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Call Settlement Date:
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Three business days after the applicable call date (if the securities are called on the last call date, the call settlement date will be the stated maturity date)
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Maturity Payment
Amount (per security):
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If the securities are not automatically called, then on the stated maturity date, you will be entitled to
receive a cash payment per security in U.S. dollars equal to the maturity payment amount. The “maturity payment amount” per security will equal:
• if
the ending level is less than the starting level but greater than or equal to the threshold level: $1,000; or
• if
the ending level is less than the threshold level:
$1,000 minus:
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Stated Maturity Date*:
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July 19, 2029
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Starting Level:
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The closing level of the Index on the pricing date
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Ending Level:
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The closing level of the Index on the final calculation day
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Threshold Level:
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90% of the starting level
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Buffer Amount:
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10%
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Calculation Agent:
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The Bank
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Denominations:
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$1,000 and any integral multiple of $1,000
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Agent Discount**:
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Up to 2.575%; dealers, including Wells Fargo Advisors, LLC (“WFA”), may receive a selling concession of up to 2.00%, and WFA will receive a distribution expense fee of 0.075%.
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CUSIP / ISIN:
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89115HJK4 / US89115HJK41
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Material Canadian and
U.S. Tax Consequences:
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See the preliminary pricing supplement.
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*Subject to change.
**In respect of certain securities, we may pay a fee of up to $3.00 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 (maturity payment amount)***
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assumes a call premium equal to the lowest possible call premium that may be determined on the pricing date.
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If the securities are not automatically called and the ending level is less than the threshold level, you will have 1-to-1 downside exposure to the decrease
in the level of the Index in excess of the buffer amount and will lose some, and possibly up to 90%, of the face amount of your securities at maturity.
Any positive return on the securities will be limited to the applicable call premium, even if the closing level on the applicable call date exceeds the
starting level by significantly more than the percentage represented by such call premium. You will not participate in any appreciation of the Index.
Our estimated value of the securities at the time the terms of your securities are set on the pricing date is expected to be between
$923.00 and $963.00 per security. The estimated value is expected to be less than the public offering price of the securities. See “Estimated Value of the Securities” in the preliminary pricing supplement.
Preliminary pricing supplement:
http://www.sec.gov/Archives/edgar/data/947263/000114036125025006/ef20051649_424b2.htm
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This introductory term sheet does not provide all of the information that an investor should consider prior to
making an investment decision. The securities have complex features and investing in the securities involves a number of risks. See “Selected Risk Considerations” beginning on page P-10 of the preliminary pricing supplement,
“Risk Factors” beginning on page PS-5 of the product supplement MLN-WF-1 dated February 26, 2025 (the “product supplement”) and “Risk Factors” on page 1 of the prospectus dated February 26, 2025 (the “prospectus”). The securities are not
a bank deposit and not insured or guaranteed by the Canada Deposit Insurance Corporation, the U.S. Federal Deposit Insurance Corporation or any other governmental agency or instrumentality of Canada or the United States.
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Selected Risk Considerations
The risks set forth below are discussed in detail in “Selected Risk Considerations” in the preliminary pricing supplement, “Risk Factors” in the product supplement and “Risk
Factors” in the prospectus. Please review those risk disclosures carefully.
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If The Securities Are Not Automatically Called And The Ending Level Is Less Than The Threshold Level, You Will Lose Some, And Possibly Up To 90%, Of The Face Amount Of Your Securities At Stated Maturity.
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No Periodic Interest Will Be Paid On The Securities.
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The Potential Return On The Securities Is Limited To The Call Premium.
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You Will Be Subject To Reinvestment Risk.
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Each Call Date (Including The Final Calculation Day) And The Related Call Settlement Date (Including The Stated Maturity Date) Is Subject To Market Disruption Events And Postponements.
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Investors Are Subject To The Bank’s Credit Risk, And The Bank’s Credit Ratings And Credit Spreads May Adversely Affect The Market Value Of The Securities.
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The Estimated Value Of Your Securities Is Expected To Be Less Than The Original Offering Price Of Your Securities.
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The Estimated Value Of Your Securities Is Based On Our Internal Funding Rate.
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The Estimated Value Of The Securities Is Based On Our Internal Pricing Models, Which May Prove To Be Inaccurate And May Be Different From The Pricing Models Of Other Financial Institutions.
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The Estimated Value Of Your Securities Is Not A Prediction Of The Prices At Which You May Sell Your Securities In The Secondary Market, If Any, And Such Secondary Market Prices, If Any, Will Likely Be Less
Than The Original Offering Price Of Your Securities And May Be Less Than The Estimated Value Of Your Securities.
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The Temporary Price At Which We May Initially Buy The Securities In The Secondary Market May Not Be Indicative Of Future Prices Of Your Securities.
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The Agent Discount, Offering Expenses And Certain Hedging Costs Are Likely To Adversely Affect Secondary Market Prices.
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There May Not Be An Active Trading Market For The Securities — Sales In The Secondary Market May Result In Significant Losses.
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If The Level Of The Index Changes, The Market Value Of Your Securities May Not Change In The Same Manner.
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The Index Reflects Price Return Only And Not Total Return.
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Any Payments On The Securities And Whether The Securities Are Automatically Called Will Depend Upon The Performance Of The Index And Therefore The Securities Are Subject To The Following Risks, Each As
Discussed In More Detail In The Accompanying Product Supplement.
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Investing In The Securities Is Not The Same As Investing In The Index.
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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.
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Changes That Affect An Index May Adversely Affect The Value Of The Securities And Any Payments On The Securities.
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We Cannot Control Actions By Any Of The Unaffiliated Companies Whose Securities Are Included In Any Index.
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We And Our Affiliates And The Agents And Their Affiliates Have No Affiliation With Any Index Sponsor And Have Not Independently Verified Their Public Disclosure Of Information.
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An Investment In The Securities Is Subject To Risks Associated With Investing In Stocks With Small Market Capitalizations.
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Trading And Business Activities By The Bank Or Its Affiliates May Adversely Affect The Market Value Of, And Any Amount Payable On, The Securities.
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There Are Potential Conflicts Of Interest Between You And The Calculation Agent.
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The Tax Consequences Of An Investment In The Securities Are Unclear.
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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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