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The Bank of Nova Scotia has submitted a preliminary pricing supplement for a new structured debt issuance: Autocallable Contingent Barrier Return Enhanced Notes linked to the EURO STOXX 50 Index, maturing on August 5, 2031. Filed on July 22, 2026, this offering marks the Toronto-based bank's latest venture into structured products, providing investors with potential upside participation alongside embedded downside protection linked to European equity index performance. The issuance includes an underwriting fee of up to 2.50% and requires a minimum investment of $1,000.
Key Highlights
- NYSE ticker: BNS
- Bank of Nova Scotia filed preliminary pricing for Autocallable Contingent Barrier Return Enhanced Notes tied to the EURO STOXX 50 Index
- Anticipated trade date: July 31, 2026; settlement date: August 5, 2026; approximate 60-month term if not called early; principal per note includes a call premium of at least 18.75%; initial estimated value ranges from $939.78 to $969.78 per $1,000 principal
- Investors should carefully review the final pricing supplement and assess risks related to automatic call features, barrier returns, and issuer credit risk
Note Structure and Autocall Feature Explained
These notes represent unsubordinated, unsecured debt obligations of The Bank of Nova Scotia, with all payments contingent on the issuer's creditworthiness. The autocallable structure means the notes will be automatically redeemed if the EURO STOXX 50 Index's Closing Value on the Review Date is at least 100% of its Initial Value. Upon such a call, investors receive the principal plus a Call Premium of no less than $187.50 (18.75%), with the exact premium set on the Trade Date. Once called, no further payments are due.
This automatic call mechanism differentiates these notes from conventional fixed-income securities by transferring upside potential to the issuer when the index performs well, while investors secure a fixed premium. The notes do not pay interest or coupons before maturity, making the call premium the sole return if called early.
Potential Outcomes at Maturity if Not Called
If the notes are not called, three scenarios apply based on the EURO STOXX 50 Index's Closing Value at maturity. First, if the Final Value exceeds the Initial Value, investors receive 125% of the positive index performance, offering leveraged upside exposure. Second, if the Final Value is between 75% and 100% of the Initial Value, investors get their full principal back without loss. Third, if the Final Value falls below 75% of the Initial Value (the Barrier Value), investors incur losses proportional to the index decline, potentially losing the entire principal.
Investment Minimums and Settlement Details
The offering requires a minimum initial investment of $1,000, with additional increments in multiples of $1,000. The expected Trade Date is July 31, 2026, with settlement on August 5, 2026. The maturity date is August 5, 2031, reflecting an approximate 60-month term if the autocall feature is not triggered. All payments will be made in cash.
The notes carry CUSIP 063941EC8 and ISIN US063941EC85. They will not be listed on any U.S. securities exchange or automated quotation system, which may limit liquidity and secondary market price transparency. As a preliminary supplement, some terms remain subject to finalization before the Trade Date.
Initial Valuation and Pricing Dynamics
The Bank of Nova Scotia estimates the notes' initial value between $939.78 and $969.78 per $1,000 principal, below the Original Issue Price of $1,000. This difference reflects internal funding costs, underwriting fees, and structuring expenses, including hedging. The valuation is based on the bank's internal pricing models incorporating its funding rate and market assumptions as of the Trade Date.
Scotia Capital (USA) Inc. (SCUSA), an affiliate, may engage in market-making post-issuance, potentially offering prices above the estimated value for about three months after issuance. This reflects possible reimbursement of certain hedging and transaction costs. The reimbursement timing and amounts may vary, and the bank may alter or end this practice depending on market conditions.
Reference Asset and Economic Characteristics
The notes derive value from the price return of the EURO STOXX 50 Index, a leading European equity benchmark. Purchasing these notes does not equate to direct ownership or economic interest in the index's constituent stocks, nor do investors receive dividends or voting rights. The notes are contractual instruments tied solely to index price movements.
Economic terms rely on the bank's internal funding rate—the borrowing cost for similar market-linked notes—rather than traditional credit spreads or fixed-rate debt costs. This internal rate is generally lower than conventional borrowing rates, which reduces the economic value delivered to investors at issuance.
Underwriting and Distribution Details
Scotia Capital (USA) Inc., as an affiliate, will purchase the notes from the bank at principal and distribute them to registered broker-dealers at a discount up to 2.50% ($25 per $1,000 principal), or sell directly to investors. This underwriting commission results in proceeds to the bank of at least 97.50% of the Original Issue Price. The preliminary supplement is used in market-making transactions unless otherwise noted.
The distribution plan addresses conflicts of interest from SCUSA's roles as purchaser and market maker. After the initial offering, SCUSA may trade the notes in secondary markets at prices it determines but is not obligated to maintain a market.
Issuer Credit Risk and Insurance Disclosures
The notes are unsecured obligations of The Bank of Nova Scotia, subject to its credit risk. They are not insured by the Canada Deposit Insurance Corporation (CDIC), the U.S. Federal Deposit Insurance Corporation (FDIC), or any other government agency in Canada, the U.S., or elsewhere. Investors depend on the bank's creditworthiness for principal and premium payments.
As a preliminary document, the pricing supplement's terms are incomplete and subject to change. Regulatory bodies such as the SEC have neither approved nor disapproved the notes or the disclosure content. The bank does not offer the notes in jurisdictions where sales are prohibited by law.
Risk Considerations and Investor Guidance
Investors are urged to review detailed risk disclosures in the pricing supplement (starting page P-8), product supplement (page PS-6), prospectus supplement (page S-2), and prospectus (page 8). The notes' value depends on multiple factors and cannot be precisely predicted, underscoring the inherent uncertainty of structured products.
Specific risks include estimated valuation and liquidity concerns, as the bank's and SCUSA's valuations do not reference credit spreads or standard debt borrowing rates. Market-making prices may differ from initial estimates. Final documentation should be reviewed carefully before investing, as terms may change prior to the Trade Date.
Regulatory Registration and Offering Status
The notes are offered under Rule 424(b)(2) of the Securities Act, Registration No. 333-282565. The July 22, 2026 filing is a preliminary pricing supplement subject to completion, with final terms expected by the Trade Date of July 31, 2026. The document is marked "Subject to Completion."
The bank clarifies that the information is incomplete and may be amended. It will not sell the notes until the final pricing supplement is delivered and does not solicit offers where prohibited by law, ensuring compliance with U.S. securities regulations for structured debt offerings.
