Bank of Nova Scotia Launches $4.2 Million Autocallable Notes Linked to Russell 2000, S&P 500, and EURO STOXX 50 Indices Maturing in 2029

Note Structure and Autocall Feature

The Bank of Nova Scotia’s notes are unsecured, unsubordinated debt securities with returns linked to the Russell 2000, S&P 500, and EURO STOXX 50 indices. The notes will be automatically called if, on any call observation date, the closing value of each index equals or exceeds its initial level. Upon an automatic call, investors receive their principal plus any contingent coupon due on that payment date.

This autocall mechanism allows for early redemption if all three indices perform favorably simultaneously, offering potential early exit opportunities. However, early calls depend on all indices meeting or surpassing initial values on specified dates, a condition that may be challenging amid market volatility.

Contingent Coupon Mechanism and Performance Thresholds

The notes feature a contingent coupon payment system independent of the autocall. If the notes are not called early and the closing value of each index on any contingent coupon observation date meets or exceeds its coupon barrier, a contingent coupon is paid on the corresponding payment date. These coupons are not guaranteed and rely entirely on the indices meeting performance criteria at set observation points.

Investors should note that contingent coupons differ from traditional bond interest; payments may not occur at all during the three-year term if performance thresholds are unmet. Even strong gains in one or two indices won’t trigger coupons if the third underperforms.

Maturity Payment Determined by Worst-Performing Index

A key feature is that maturity payments depend on the index with the lowest performance. If the notes are not called early, the final payment is based solely on the reference asset with the smallest percentage change from initial to final value. This "worst of" structure means returns are dictated by the poorest performing index regardless of others’ gains.

If the lowest-performing index’s final value is at or above its barrier, investors receive their principal plus any contingent coupon due at maturity. However, if it falls below the barrier, investors face losses proportional to that index’s decline, potentially losing up to 100% of principal. This asymmetric risk highlights the importance of protecting the weakest index throughout the term.

Credit Risk and Unsecured Debt Characteristics

The notes are unsecured and unsubordinated obligations of The Bank of Nova Scotia, making payments subject to the bank’s creditworthiness. All payments will be made in cash, exposing investors to the bank’s financial condition rather than collateralized security.

These notes will not be listed on any U.S. exchange or quotation system, potentially limiting liquidity. Investors looking to sell before maturity must rely on Scotia Capital (USA) Inc., the bank’s affiliate, to provide market-making, though no guarantees exist for secondary market availability or pricing reflecting intrinsic value.

Initial Valuation and Pricing Details

At issuance, the notes’ estimated value was $961.12 per $1,000 principal, below the 100% issue price. This gap reflects costs embedded in the price including the bank’s internal funding rate, underwriting fees, structuring expenses, and hedging costs.

Scotia Capital (USA) Inc. agreed to purchase the notes from the bank at principal amount and resell them to broker-dealers at a 2.00% discount ($20 per $1,000). After deducting the $84,180 underwriting commission, the bank’s net proceeds total $4,124,820. The difference between estimated value and issue price represents the bank’s retained economic value via hedging and structural features.

Secondary Market Pricing and Temporary Reimbursement

Note values fluctuate based on multiple factors and cannot be precisely forecasted. Initially, Scotia Capital may price notes above estimated value for about three months post-issuance by reimbursing investors part of the hedging and issuance costs no longer expected over the term.

This discretionary reimbursement depends on factors such as note tenor and dealer agreements and may be discontinued or adjusted based on market conditions. The reimbursement amount may not be evenly distributed over the period.

No Direct Ownership or Rights in Underlying Indices

The notes are derivative instruments based on the price return of the lowest performing index and do not confer direct ownership, economic interest, or rights in the indices or their constituent stocks. Investors receive no voting rights, dividends, or distributions from the underlying equities.

Payments are strictly contractual and contingent on performance conditions; investors do not benefit from corporate actions or dividends of the companies in the indices beyond the note’s derivative exposure.

No Government Insurance or Protection

The notes are not insured by the Canada Deposit Insurance Corporation, U.S. Federal Deposit Insurance Corporation, or any other government agency. Unlike traditional bank deposits, these structured notes lack government-backed protection, making the bank’s creditworthiness a critical factor in investment risk.

Investment Risks and Liquidity Considerations

The Bank of Nova Scotia highlights significant risks including estimated value discrepancies and potential illiquidity. The notes’ estimated value does not reflect credit spreads or conventional borrowing rates but the bank’s internal funding costs, reducing economic terms for investors.

Secondary market liquidity may be limited or absent, with no obligation for Scotia Capital to maintain a market post-offering. Investors should assess their ability to hold notes to maturity or tolerate possible illiquidity.

Trade, Settlement, and Identification Information

The notes were traded on July 17, 2026, settled July 22, 2026, and mature July 20, 2029, offering a roughly three-year term if not called early. The minimum investment is $1,000 per note plus integral multiples. The CUSIP is 063941AU2 and ISIN US063941AU20 for identification.

Offered under Registration No. 333-282565 via Form 424(b)(2) pricing supplement, all payments are cash-settled with no physical certificates. Scotia Capital (USA) Inc., an affiliate of The Bank of Nova Scotia, served as underwriter and agreed to distribute notes to registered broker-dealers at a 2% discount.