The Toronto-Dominion Bank (TD) has offered Capped Notes linked to the least performing of the Dow Jones Industrial Average®, the Nasdaq-100 Index®, and the S&P 500® Index. The Notes provide unleveraged participation in the positive return of the Least Performing Reference Asset if its value increases from the Initial Value to the Final Value, subject to a Maximum Redemption Amount of $1,513.50 per Note. The “Least Performing Reference Asset” is the one with the lowest Percentage Change, calculated as (Final Value - Initial Value) / Initial Value. Investors receive their Principal Amount at maturity if the Final Value of the Least Performing Reference Asset is equal to or less than its Initial Value. Payment on the Notes is subject to TD’s credit risk.
Key risks include:
- Return Characteristics: The Notes do not pay interest, and returns may be less than conventional debt securities. The potential return is limited by the Maximum Redemption Amount.
- Market Risk: Investors are exposed to the market risk of each Reference Asset on the Valuation Date, and a decline in one Asset’s value is not offset by others.
- Reference Asset Characteristics: Each Reference Asset carries market risks, and the Notes are linked to the least performing one, increasing the risk of a negative return.
- Estimated Value and Liquidity: The estimated value of the Notes is less than the public offering price, reflecting costs and expected profits. There may be little secondary market liquidity, and secondary market prices could be significantly less than the public offering price.
- Hedging Activities and Conflicts of Interest: Potential conflicts exist between investors and the Calculation Agent, and between investors and TD due to hedging activities and business relationships with Reference Asset Constituent Issuers.
- Credit Risk: Investors are subject to TD’s credit risk, and changes in TD’s credit ratings or spreads may adversely affect the Notes’ market value.
- Taxation: The Notes are subject to special rules governing Canadian and U.S. federal income taxation. U.S. holders may be required to pay taxes on ordinary income from the Notes even though no payment is received prior to maturity. Non-U.S. holders may face reporting and withholding tax obligations.
The estimated value of the Notes at the Pricing Date was $938.90 per Note, less than the public offering price. The Notes are unsecured and not insured or guaranteed by any governmental agency. Investors should carefully consider the additional risk factors and consult their advisors before investing.
