The Toronto-Dominion Bank (“TD”) is offering Callable Contingent Interest Barrier Notes linked to the least performing of the Dow Jones Industrial Average® (INDU), the Nasdaq-100 Index® (NDX), and the S&P 500® Index (SPX). The Notes will pay a Contingent Interest Payment at a rate of approximately 11.75% 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 on the related Contingent Interest Payment Date.
Key Features and Risks:
- Callable Feature: TD may call the Notes in whole on any Call Payment Date (monthly, commencing on the third Contingent Interest Payment Date) upon at least three Business Days’ prior written notice, regardless of the Closing Values of the Reference Assets. If called, investors will receive the Principal Amount plus any Contingent Interest Payment otherwise due.
- Maturity Payment: If TD does not elect to call the Notes prior to maturity, the payment at maturity will depend on the Final Value of each Reference Asset relative to its Barrier Value (70.00% of its Initial Value):
- 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.
- Risks:
- Return Risk: The Notes do not guarantee the return of the Principal Amount and investors may lose up to their entire investment if the Final Value of any Reference Asset is less than its Barrier Value.
- Interest Rate Risk: The Notes are more sensitive to interest rate risk due to the contingent interest and Issuer Call features.
- Market Risk: Investors are exposed to the market risk of each Reference Asset on each Contingent Interest Observation Date (including the Final Valuation Date).
- Liquidity Risk: The Notes may not have an active secondary market, and sales in the secondary market may result in significant losses.
- Credit Risk: Investors are subject to TD’s credit risk, and changes in TD’s credit ratings or credit spreads may adversely affect the market value of the Notes.
- Taxation Risk: Significant aspects of the tax treatment of the Notes are uncertain, particularly for U.S. holders.
Estimated Value and Pricing:
- The estimated value of the Notes at the time the terms are set on the Pricing Date is expected to be between $950.00 and $985.00 per Note, as discussed under “Additional Risk Factors — Risks Relating to Estimated Value and Liquidity”.
- The estimated value is expected to be less than the public offering price of the Notes, which includes an underwriting discount and offering expenses.
- The public offering price for investors purchasing the Notes in certain fee-based advisory accounts may be as low as $994.00 (99.40%) per Note.
Hedging and Conflicts of Interest:
- TD will engage in hedging activities to mitigate its risk exposure under the Notes.
- There are potential conflicts of interest between investors and the Calculation Agent, as well as between investors and TD due to TD’s role in hedging and its potential to call the Notes.
- TD may, at present or in the future, engage in business with one or more Reference Asset Constituent Issuers, which may present a conflict between their obligations and the interests of the Notes holders.
Information Regarding the Reference Assets:
- The information regarding the Reference Assets, including their make-up, methods of calculation, and changes in any Reference Asset Constituents, has been derived from publicly available sources and reflects the policies of, and is subject to change by, the Index Sponsors.
- The historical performance of each Reference Asset should not be taken as an indication of its future performance.
Taxation:
- The U.S. tax treatment of the Notes is uncertain. The Notes may be treated as prepaid derivative contracts with respect to the Reference Assets, and any Contingent Interest Payments paid on the Notes would be treated as ordinary income.
- Canadian federal income tax consequences for Non-resident Holders are summarized in the document, but it is not exhaustive of all possible considerations.
Supplemental Plan of Distribution:
- TD Securities (USA) LLC (“TDS”) has been appointed as the Agent for the sale of the Notes.
- TDS will purchase the Notes from TD at the public offering price less the underwriting discount and may use all or a portion of that commission to allow selling concessions to other registered broker-dealers.
- The Notes are not intended to be offered, sold, or otherwise made available to retail investors in the European Economic Area (EEA) or the United Kingdom (UK).
