The Toronto-Dominion Bank is offering Autocallable Leveraged Barrier Notes linked to the least performing of the iShares® Semiconductor ETF and the S&P 500® Index. The Notes will be automatically called if the closing value of each Reference Asset on the Call Observation Date is greater than or equal to its Call Threshold Value (100.00% of its Initial Value). If called, investors receive a cash payment equal to the Call Price (Principal Amount + 31.60% Call Return). If not called, the payment at maturity depends on the Final Value of each Reference Asset relative to its Initial Value and Barrier Value (70.00% of its Initial Value), and the lowest percentage change of the Reference Assets (Least Performing Percentage Change).
Key features and risks:
- Return characteristics: The Notes do not pay periodic interest and do not guarantee the return of principal or the Call Price. Investors may lose up to their entire investment if the Notes are not automatically called and the Final Value of any Reference Asset is less than its Barrier Value.
- Reference assets risks: Investors are exposed to the market risk of each Reference Asset on the Call Observation Date and the Final Valuation Date. The Notes are linked to the least performing asset, increasing the risk of no positive return or significant loss.
- Leveraged and barrier features: The Notes use a leverage factor and a barrier value, which are determined based on the correlation of the Reference Assets. Lower correlation increases the risk of loss.
- Estimated value and liquidity: The estimated value of the Notes is expected to be less than the public offering price, reflecting costs and expected profits. There may be little or no secondary market for the Notes, and any secondary market prices will likely be less than the public offering price.
- Hedging activities and conflicts of interest: The bank may engage in hedging activities, which could create conflicts of interest between the holders' interests and the bank's interests.
- Credit risk: Investors are subject to the bank's credit risk, and any decrease in the bank's credit ratings or increase in credit spreads will likely adversely affect the market value of the Notes.
- Taxation: The U.S. tax treatment of the Notes is uncertain, and investors should consult their tax advisors. Canadian tax considerations also apply for non-resident holders.
Hypothetical returns:
- Example 1: If both Reference Assets close above their Call Threshold Values, the Notes are automatically called, and investors receive a total return of 31.60%.
- Example 2: If at least one Reference Asset closes below its Call Threshold Value but above its Barrier Value, the Notes are not called, and investors receive a total return of 10.00%.
- Example 3: If at least one Reference Asset closes below its Barrier Value, investors lose 60.00% of their initial investment.
Conclusion: The Notes offer the potential for high returns but also carry significant risks, including the possibility of losing the entire investment. Investors should carefully consider the risks and consult their advisors before investing.
