The Toronto-Dominion Bank (TD) is offering Callable Contingent Interest Barrier Notes linked to the least performing of three reference assets: the Dow Jones Industrial Average® (INDU), the Nasdaq-100® Technology Sector IndexSM (NDXT), and the Russell 2000® Index (RTY). The Notes have a term of approximately 18 months, subject to an Issuer Call feature.
Key features and terms:
- Contingent Interest Payment: The Notes pay a Contingent Interest Payment at a rate of approximately 12.55% per annum on a monthly basis, but only if the closing value of each reference asset on the related Contingent Interest Observation Date is greater than or equal to its Contingent Interest Barrier Value (70% of its Initial Value). If any reference asset's value falls below its Contingent Interest Barrier Value, no payment will be made.
- Issuer Call Feature: TD may call the Notes in whole on any Call Payment Date (monthly, starting from the third Contingent Interest Payment Date) upon at least three business days' prior written notice, regardless of the reference assets' values.
- Payment at Maturity: If TD does not call the Notes, the payment at maturity will be:
- $1,000 (Principal Amount) if all reference assets' final values are greater than or equal to their Barrier Values (70% of their Initial Values).
- $1,000 plus the product of $1,000 and the Least Performing Percentage Change if any reference asset's final value is less than its Barrier Value. The Least Performing Percentage Change is calculated as the difference between the Final Value and the Initial Value of the reference asset with the lowest Percentage Change, expressed as a percentage.
- Initial Value: The Initial Value of each reference asset is determined on the Pricing Date and equals its closing value on that date.
- Final Value: The Final Value of each reference asset is its closing value on the Final Valuation Date.
- Barrier Value: The Barrier Value for each reference asset is 70% of its Initial Value and is determined on the Pricing Date.
- Least Performing Reference Asset: The reference asset with the lowest Percentage Change compared to the others.
- Least Performing Percentage Change: The Percentage Change of the Least Performing Reference Asset.
- Pricing Date: June 5, 2026.
- Issue Date: June 10, 2026.
Risks:
- Return Risk: The Notes do not guarantee the return of the Principal Amount, and investors may lose their entire investment if the final value of any reference asset is less than its Barrier Value.
- Liquidity Risk: The Notes are not listed, and there may be little or no secondary market, potentially leading to significant losses if the Notes need to be sold before maturity.
- Market Risk: Investors are exposed to the market risk of each reference asset on each Contingent Interest Observation Date. Poor performance by any single asset will negatively impact the return.
- Credit Risk: The Notes are subject to TD's credit risk, and any decrease in TD's credit ratings or increase in credit spreads will likely adversely affect the Notes' market value.
- Tax Risk: The U.S. tax treatment of the Notes is uncertain and may result in ordinary income treatment, potentially leading to higher taxes and adverse consequences under Section 1297 and Notice 2008-2. Canadian tax treatment also involves potential withholding taxes for non-resident holders.
Additional Information:
- The estimated value of the Notes on the Pricing Date is expected to be between $945.00 and $980.00 per Note, which is less than the public offering price of $1,000.00.
- The estimated value is based on TD's internal funding rate and pricing models, which may differ from other financial institutions' models.
- The Notes are subject to potential conflicts of interest due to TD's role as the Calculation Agent and its potential hedging activities.
- The Notes are not suitable for non-U.S. holders due to uncertain tax consequences.
- The Notes are not intended for retail investors in the European Economic Area (EEA) or the United Kingdom (UK).
Conclusion:
The Callable Contingent Interest Barrier Notes offer a potentially high return but come with significant risks, including return risk, liquidity risk, market risk, credit risk, and tax risk. Investors should carefully consider these risks and consult with their advisors before investing.
