The Toronto-Dominion Bank (TD) has offered Autocallable Contingent Interest Barrier Notes linked to the least performing of the Nasdaq-100 Index®, the Russell 2000® Index and the S&P 500® Index. The Notes will pay a Contingent Interest Payment at a rate of approximately 7.90% per annum only if, on the related Contingent Interest Observation Date, the Closing Value of each Reference Asset is greater than or equal to its Contingent Interest Barrier Value (70.00% of its Initial Value). If the Closing Value of any Reference Asset is less than its Contingent Interest Barrier Value on a Contingent Interest Observation Date, no Contingent Interest Payment will accrue or be payable.
The Notes will be automatically called if, on any Call Observation Date, the Closing Value of each Reference Asset is greater than or equal to its Call Threshold Value (100.00% of its Initial Value). If the Notes are automatically called, TD will pay a cash payment per Note equal to the Principal Amount ($1,000) plus any Contingent Interest Payment otherwise due. No further amounts will be owed under the Notes.
If the Notes are not automatically called, the amount TD pays at maturity, in addition to any Contingent Interest Payment otherwise due, if anything, will depend on the Closing Value of each Reference Asset on its Final Valuation Date (its “Final Value”) relative to its Barrier Value (70.00% of its Initial Value). Specifically:
- If the Final Value of each Reference Asset is greater than or equal to its Barrier Value: the Principal Amount of $1,000.
- If the Final Value of any Reference Asset is less than its Barrier Value: the sum of (1) $1,000 plus (2) the product of (i) $1,000 times (ii) the Least Performing Percentage Change.
The Notes do not guarantee the payment of any Contingent Interest Payments or the return of the Principal Amount. Investors are exposed to the market risk of each Reference Asset on each Contingent Interest Observation Date (including the Final Valuation Date) and any decline in the value of one Reference Asset will not be offset or mitigated by a lesser decline or potential increase in the value of any other Reference Asset. If the Final Value of any Reference Asset is less than its Barrier Value, investors may lose up to their entire investment in the Notes.
The Notes are unsecured and are not savings accounts or insured deposits of a bank. The Notes are not insured or guaranteed by the Canada Deposit Insurance Corporation, the U.S. Federal Deposit Insurance Corporation or any other governmental agency or instrumentality of Canada or the United States. The Notes will not be listed or displayed on any securities exchange or electronic communications network.
The estimated value of the Notes at the time the terms of the Notes were set on the Pricing Date was $964.00 per Note, as discussed further under “Additional Risk Factors — Risks Relating to Estimated Value and Liquidity”. The estimated value is less than the public offering price of the Notes.
The public offering price is $1,000.00 per Note, with an underwriting discount of $25.00 per Note, resulting in proceeds to TD of $975.00 per Note. TD Securities (USA) LLC will receive a commission of $25.00 (2.50%) per Note and will use all of that commission to allow selling concessions to other dealers in connection with the distribution of the Notes.
The Notes involve risks not associated with an investment in conventional debt securities, including risks relating to return characteristics, characteristics of the Reference Assets, estimated value and liquidity, hedging activities and conflicts of interest, and general credit characteristics. Investors should consult their investment, legal, tax, accounting and other advisors as to the risks entailed by an investment in the Notes and the suitability of the Notes in light of their particular circumstances.
The U.S. tax treatment of the Notes is uncertain. Pursuant to the terms of the Notes, TD and the investor agree, in the absence of a statutory or regulatory change or an administrative determination or judicial ruling to the contrary, to treat the Notes as prepaid derivative contracts with respect to the Reference Assets. Any Contingent Interest Payment that the investor receives should be included in ordinary income at the time the payment is received or when it accrues.
The Notes are not intended to be offered, sold or otherwise made available to any retail investor in the European Economic Area (EEA) or the United Kingdom (UK).
