The Toronto-Dominion Bank is issuing $1,000 principal amount notes linked to Alphabet Inc. Class A common stock (GOOGL), with a maturity date of April 26, 2027. The notes offer a fixed return of 15.28% if the final price of GOOGL on the valuation date (April 9, 2026) is greater than or equal to the buffer price of $269.722 (85% of the initial price of $317.32). If the final price falls below the buffer price, investors will lose approximately 1.1765% of their principal for each 1% decrease below the buffer price, potentially losing their entire investment.
Investors should be aware of several risks associated with these notes. First, the notes do not guarantee the return of principal and are linked to the performance of a single stock, exposing investors to concentrated risk. Second, the potential return is fixed and limited to the digital return, meaning investors will not benefit from any increase in GOOGL's price above the digital return. Third, the notes do not pay interest, and their return may be lower than that of conventional debt securities.
The estimated value of the notes on the pricing date is expected to be between $950.00 and $985.00 per note, which is lower than the public offering price. This discount reflects costs, expected profits, and hedging costs. The estimated value is based on the bank's internal funding rate and pricing models, which may differ from other financial institutions.
There may not be an active secondary market for the notes, and any sales in the secondary market may result in significant losses. The notes are subject to market disruption events and may be postponed. Additionally, investors are subject to the bank's credit risk, and changes in the bank's credit ratings or spreads may adversely affect the notes' market value.
U.S. and Canadian federal income tax treatment of the notes are uncertain, and investors should consult with tax advisors. Non-U.S. holders may be subject to withholding taxes and reporting obligations under FATCA.
