The Bank of Nova Scotia is offering Capped Trigger GEARS linked to the Russell 2000® Index, with a maturity date of June 29, 2029. The Securities are senior unsecured debt instruments, and the return at maturity is contingent on the performance of the underlying index.
Key features:
- Return potential: Up to a maximum gain of 62.40%, with upside gearing of 1.50. The payment at maturity will be the lesser of (a) the underlying return multiplied by the upside gearing or (b) the maximum gain.
- Downside protection: If the final level of the index is below the downside threshold (75.00% of the initial level), the payment at maturity will be less than the principal amount, resulting in a loss.
- Contingent principal repayment: Principal is only repaid if the final level is equal to or greater than the downside threshold.
- No interest payments: The Securities do not pay interest.
- Liquidity: The Securities will not be listed, and there may be limited secondary market liquidity.
Key risks:
- Loss of investment: There is a significant risk of losing a portion or all of the investment, especially if the final level of the index is below the downside threshold.
- Credit risk: The payment at maturity is subject to the creditworthiness of The Bank of Nova Scotia.
- Market risk: The return is directly linked to the performance of the Russell 2000® Index, which is subject to market volatility.
- Liquidity risk: The limited secondary market may not provide an opportunity to sell the Securities before maturity.
- Hedging activities: The potential for conflicts of interest and adverse impacts on the Securities' value due to hedging activities by the issuer and underwriters.
Estimated value: The initial estimated value of the Securities is expected to be between $9.286 and $9.586 per principal amount, which is lower than the issue price of $10.00.
Investor suitability: The Securities may be suitable for investors who understand and accept the risks involved, are willing to forgo current income, and can tolerate fluctuations in the price of the Securities.
Tax implications: The tax treatment of the Securities is uncertain, particularly for U.S. holders, and investors should consult their tax advisors.
