The Toronto-Dominion Bank (“TD”) is offering Callable Contingent Interest Barrier Notes linked to the least performing of the Nasdaq-100®Technology Sector IndexSM, the Russell 2000®Index and the S&P 500®Index. The Notes will pay a 12.45% contingent interest rate only if the closing value of each reference asset is greater than or equal to its 70.00% initial value. If any reference asset’s value falls below its barrier value, no interest payment will be made.
Key Features and Risks:
- Contingent Interest: The Notes pay a 12.45% contingent interest rate, but only if the reference assets meet their barrier values. If not, no interest is paid.
- Issuer Call Option: TD may call the Notes at any monthly payment date (starting from the third interest payment date) with three business days’ notice, regardless of the reference assets’ values.
- Maturity Payment: If TD does not call the Notes, the final payment at maturity will depend on the reference assets’ final values relative to their 65.00% barrier values. If any reference asset’s final value is below its barrier value, investors will lose 1% of their principal for each 1% the asset’s value is below its initial value.
- Market Risks: Investors are exposed to the market risks of each reference asset, and the performance of the least performing asset directly impacts the return.
- Liquidity Risks: The Notes are not listed, and there may be limited secondary market liquidity, potentially leading to significant losses if sold before maturity.
- Taxation: The U.S. tax treatment of the Notes is uncertain, and potential conflicts of interest exist due to TD’s role as the Calculation Agent and its hedging activities.
Estimated Value and Pricing:
- The estimated value of the Notes is expected to be between $940.00 and $975.00 per Note, lower than the public offering price.
- The estimated value is based on TD’s internal funding rate and pricing models, which may differ from other financial institutions.
Examples of Scenarios:
- If TD calls the Notes early, investors receive their principal plus any accrued interest.
- If TD does not call the Notes and all reference assets meet their barrier values, investors receive their principal plus the final interest payment.
- If TD does not call the Notes and at least one reference asset falls below its barrier value, investors lose a portion of their principal proportional to the asset’s decline.
Conclusion:
Investing in these Notes involves significant risks, including potential loss of principal, limited liquidity, and uncertain tax treatment. Investors should carefully consider these risks and consult with their advisors before investing.
