Bank of Nova Scotia Announces Autocallable Contingent Coupon Notes Linked to Nasdaq-100 & S&P 500 with 2029 Maturity

Autocallable Note Structure and Early Redemption Feature

The Bank of Nova Scotia's new notes incorporate an automatic call mechanism allowing early redemption. If the Closing Value of each Reference Asset on any Call Observation Date equals or exceeds its Initial Value, the notes will be automatically called. Upon automatic call, investors receive a cash payment on the Call Settlement Date equal to the Principal Amount plus the Contingent Coupon payable on the corresponding Contingent Coupon Payment Date.

This feature manages redemption risk for issuer and investors, enabling early termination if both Nasdaq-100 and S&P 500 indices meet or exceed initial values on specified observation dates. Specific Call Observation Dates are not disclosed in the filing, pending finalization in the definitive pricing supplement.

Contingent Coupon Payment Conditions and Observation Dates

The notes offer contingent coupon payments contingent upon market conditions. If not automatically called, the Closing Value of each Reference Asset on any Contingent Coupon Observation Date must be at or above its Contingent Coupon Barrier Value for a coupon to be paid on the corresponding Contingent Coupon Payment Date. Coupon rates and barrier levels will be set at pricing and are not disclosed in the preliminary filing.

The filing highlights that "The Notes do not guarantee interest and you may not receive any Contingent Coupons on the Notes," emphasizing the speculative nature of income payments dependent on both Reference Assets meeting barrier requirements.

Maturity Payment Based on Lowest Performing Index

At maturity, the payout is determined by the Reference Asset with the lowest percentage change from Initial to Final Value, called the "Least Performing Reference Asset." Regardless of the better-performing index, the maturity payment depends solely on the weakest performing index.

If the Least Performing Reference Asset's Final Value is equal to or above its Barrier Value, investors receive the Principal Amount plus any due Contingent Coupon. If below the Barrier Value, investors incur losses proportional to that asset's depreciation, potentially losing up to 100% of principal. Specific Barrier Value percentages are not disclosed.

Credit Risk and Unsecured Debt Status

Investors bear the full credit risk of The Bank of Nova Scotia, as the notes are unsubordinated and unsecured debt securities. They rank equally with other unsecured creditors and are not backed by specific Bank assets. The filing stresses that all payments depend on the Bank's creditworthiness.

Additionally, the notes are not insured by the Canada Deposit Insurance Corporation (CDIC), the U.S. Federal Deposit Insurance Corporation (FDIC), or any other government agency, exposing investors to full credit risk alongside market risk.

Pricing Details and Estimated Value Discount

The initial estimated value at trade date is expected between $931.71 and $961.71 per $1,000 principal, below the 100% Original Issue Price. This discount reflects underwriting commissions up to 2.00% and embedded costs including hedging and structuring expenses.

The Bank’s internal funding rate, typically lower than conventional fixed-rate debt issuance costs, contributes to the pricing differential, allowing economic benefits from the structured product issuance.

Temporary Secondary Market Pricing Benefit

The Bank has elected a discretionary secondary market pricing approach that may temporarily favor investors. Scotia Capital (USA) Inc. (SCUSA), the Bank’s affiliate, may buy or sell notes above estimated value for about three months post-issue, effectively reimbursing some hedging and issuance costs.

This reimbursement is not guaranteed to be evenly distributed and may be discontinued at the Bank’s discretion. The filing does not specify reimbursement amounts or formulas, leaving uncertainty about the extent and timing of such benefits.

Distribution and Potential Conflicts of Interest

SCUSA will purchase the notes from the Bank at Principal Amount and distribute them to broker-dealers at discounts up to 2.00% or directly to investors. SCUSA may also engage in market-making transactions post-sale, creating potential conflicts of interest investors should consider regarding liquidity and pricing.

Index Selection and Performance Measurement

The notes are linked to the Nasdaq-100 and S&P 500 indices. Payments depend on these Reference Assets’ performance, with the maturity payout based on the "Least Performing Reference Asset." Specific Initial Values, observation dates, coupon rates, and barrier levels will be finalized in the pricing supplement on July 31, 2026.

The filing clarifies that the notes do not represent direct investments or ownership interests in any constituent stocks of the Reference Assets.

Offering Timeline and Settlement Information

Pricing is expected on July 31, 2026, with settlement on August 5, 2026, and maturity on August 3, 2029, giving an approximate three-year term unless called earlier. Minimum investments start at $1,000 with increments of $1,000.

Assigned identifiers include CUSIP 063941DX3 and ISIN US063941DX32. The notes will not be listed on U.S. exchanges or automated quotation systems, requiring secondary market trading through over-the-counter broker-dealers.

Investment Risks and Regulatory Notices

The filing contains detailed risk disclosures, warning investors of potential losses and the initial estimated value being below the purchase price. It directs investors to review comprehensive risk sections in the accompanying documents.

Regulatory disclosures note that neither the SEC nor any state securities commission has approved or disapproved the notes. The filing was made under Rule 424(b)(2), registered under No. 333-282565, and is "Subject to Completion. Dated July 21, 2026." Sales will not occur until the final Pricing Supplement is delivered.