The notes are unsecured obligations of The Bank of Nova Scotia, not linked to the VanEck®Gold Miners ETF (GDX) or its constituent stocks, but rather to the performance of GDX as measured by the MarketVector™ Global Gold Miners Index. The notes will not bear interest, and the payment at maturity is contingent on GDX's performance relative to a threshold price (80% of the initial price).
Key features and risks:
- Maturity: Approximately 13 to 15 months after the trade date.
- Valuation Date: The 2nd business day after the valuation date, with potential delays due to market disruptions.
- Initial Price: Set on the trade date, based on the closing or an intra-day price of GDX.
- Final Price: Determined on the valuation date and used to calculate the reference asset return.
- Reference Asset Return: The percentage change in GDX's price from the initial price.
- Threshold Price: 80% of the initial price.
- Maximum Payment Amount: Expected to be between $1,112.10 and $1,131.50 per $1,000 principal amount.
- Losses: If the reference asset return is less than -20%, the investor will lose 1.25% for every 1% negative percentage change in GDX's price below 80% of the initial price.
- Credit Risk: Payments are subject to the creditworthiness of The Bank of Nova Scotia.
- Liquidity Risk: The notes are not listed and may lack a secondary market.
- Taxation: The tax treatment is uncertain and depends on the U.S. Internal Revenue Service's interpretation.
Investor suitability considerations:
- Suitable for investors who understand and accept the risks, including the potential loss of the entire investment.
- Suitable for investors seeking exposure to gold and silver mining companies without seeking current income or dividends.
- Not suitable for risk-averse investors or those seeking guaranteed returns.
Additional risks:
- The notes are linked to GDX's price and not its total return, including dividends.
- The initial price is expected to be lower than the original issue price due to costs and hedging.
- The notes lack liquidity and may be difficult to sell before maturity.
- The Bank's hedging activities and conflicts of interest with distribution partners may negatively impact investors.
- The reference asset is concentrated in gold and silver mining companies, making it more volatile and susceptible to market risks.
- There is no assurance that the reference asset will perform well, and past performance is not indicative of future results.
