The Toronto-Dominion Bank (TD) is offering Callable Contingent Interest Barrier Notes linked to the least performing of the Dow Jones Industrial Average® (INDU), the Nasdaq-100 Index® (NDX), and the Russell 2000® Index (RTY). The Notes will pay a Contingent Interest Rate of 6.90% annually if the closing value of each Reference Asset is greater than or equal to its Contingent Interest Barrier Value (65.00% of its Initial Value) on the Contingent Interest Observation Date. If any Reference Asset's closing value falls below its Contingent Interest Barrier Value, no Contingent Interest Payment will be made.
Key Features and Risks:
- Callable Feature: TD may call the Notes in whole on any Call Payment Date (monthly, starting from the twelfth Contingent Interest Payment Date) with at least three business days' notice, paying the Principal Amount plus any accrued Contingent Interest Payment.
- Maturity Payment: If not called before maturity, the payment at maturity will be $1,000 plus the product of $1,000 and the Least Performing Percentage Change if any Reference Asset's final value is below its Barrier Value (also 65.00% of its Initial Value). Investors may lose their entire investment if the least performing asset significantly underperforms.
- Contingent Interest Payments: These payments are only made if all Reference Assets meet their Contingent Interest Barrier Values. Failure to do so results in no payments and potential loss of principal.
- Market Risks: Investors are exposed to the market risks of each individual Reference Asset, with no diversification benefit as the Notes are linked to the performance of each asset separately.
- Liquidity Risks: The Notes are not listed, and there may be limited or no secondary market, potentially leading to significant losses if sold before maturity.
- Credit Risk: Payments are subject to TD's credit risk, and changes in TD's credit ratings may negatively impact the Notes' market value.
- Taxation: The U.S. tax treatment of the Notes is uncertain, with potential implications for ordinary income treatment and reporting obligations. Canadian tax considerations apply to non-resident holders, with potential withholding taxes on interest and capital gains.
Estimated Value: The estimated value of the Notes at the Pricing Date is expected to be between $900.00 and $935.00 per Note, reflecting costs, expected profits, and hedging activities. This estimated value is not a prediction of secondary market prices, which are likely to be lower due to transaction costs and other factors.
Investment Considerations: The Notes offer potential returns limited to the Contingent Interest Payments received, and the return may be less than that of conventional debt securities. Investors should carefully consider the risks, particularly the potential for loss of principal and the impact of the Issuer Call Feature, before investing.
