Bank of Nova Scotia Launches $8.9 Million Contingent Income Auto-Callable Securities Linked to Amazon, Alphabet, and Microsoft Stocks

Structured Product Details and Underlying Assets

Issued under the Bank of Nova Scotia’s Senior Note Program, Series A, these Contingent Income Auto-Callable Securities represent senior unsecured debt with a total principal amount of $8.933 million. Each security is sold at $1,000 with a minimum purchase of one security.

The underlying assets are common stocks of Amazon.com Inc., Alphabet Inc. Class A shares, and Microsoft Corporation. Payments—including contingent coupons and principal repayment—depend on the performance of the worst-performing stock among these three technology leaders. This "worst of" structure means a significant drop in any one stock can suspend coupons and risk principal loss, regardless of gains in the others.

Contingent Coupon Structure and Memory Feature

Investors may earn contingent quarterly coupons of $31.025 per security (12.41% annualized) only if, on each of the eight determination dates—October 19, 2026; January 19, 2027; April 19, 2027; July 19, 2027; October 18, 2027; January 18, 2028; April 17, 2028; and July 17, 2028—all three stocks close at or above 50% of their initial prices.

The securities include a memory coupon mechanism: if a coupon is missed because any stock falls below the threshold, the unpaid coupon accumulates and is payable later if all stocks rebound above the threshold on a subsequent date. If the stocks never recover above the threshold during the term, no coupons are paid.

Early Redemption and Automatic Call Features

An automatic early redemption provision allows the Bank of Nova Scotia to redeem the securities before maturity if, on any determination date (except the final one), all three stocks close at or above their call threshold prices. Redemption occurs on the next coupon payment date, with investors receiving the $1,000 principal plus the contingent coupon for that date and any accumulated unpaid coupons.

After early redemption, no further payments are made and the investment ends. Call threshold prices are linked to the underlying stocks’ performance but are not explicitly disclosed. If any stock closes below its call threshold on a determination date, the securities remain outstanding with ongoing market exposure.

Principal-at-Risk and Downside Exposure

These securities do not guarantee principal repayment and do not pay regular interest. If, on the final determination date (July 17, 2028), any stock closes below 50% of its initial price, investors will receive less than 50% of principal and could lose their entire investment. Losses correspond directly to the decline of the worst-performing stock. For example, a 60% drop in Amazon’s stock price would result in a 60% loss of principal, regardless of Alphabet’s or Microsoft’s performance.

Investors must accept the risk of significant or total loss. The securities are unsecured obligations with no collateral backing, and investors have no claim on the underlying stocks.

Pricing and Settlement Details

Priced on July 17, 2026, at $1,000 per security, the original issue date is July 22, 2026, with a three-business-day (T+3) settlement period. This differs from the typical one-business-day (T+1) settlement for secondary market trades, potentially complicating early secondary market sales before July 21, 2026, and possibly limiting liquidity.

Determination and Payment Schedule

The eight determination dates span from October 19, 2026, through July 17, 2028, with corresponding coupon payment dates shortly after each determination date, concluding on the maturity date, July 20, 2028. The Bank of Nova Scotia may postpone these dates due to market disruptions or non-trading days, which could delay coupon payments or early redemption decisions.

Issuer Credit Risk

All payments depend on the creditworthiness of the Bank of Nova Scotia, a major Canadian financial institution. Investors face the risk of issuer default, which could result in total loss. The securities are senior unsecured debt without collateral or claims on the underlying stocks.

No Equity Upside Participation

Investors do not benefit from any appreciation in Amazon, Alphabet, or Microsoft stock prices beyond the fixed contingent coupons. The maximum return is the sum of all contingent coupons paid plus principal repayment or early redemption amount. Missed coupons reduce potential returns unless recovered through the memory feature.

Regulatory and Registration Information

These securities were issued under SEC registration statement No. 333-282565, with prospectus and supplements dated November 8, 2024, and pricing supplement dated July 17, 2026. The offering complies with Rule 424(b)(2) of the Securities Act of 1933, allowing issuance under existing registration without delay.

They are designed for sophisticated investors familiar with principal-at-risk structured products and contingent coupon auto-callable note mechanics.

Investment Suitability and Risk Summary

The Bank of Nova Scotia recommends these securities for investors willing to risk their entire principal linked to the worst-performing stock among Amazon, Alphabet, and Microsoft, in exchange for a chance at above-market interest. The "worst of" structure concentrates risk: a decline in any one stock can suspend coupons or cause principal loss, regardless of others’ performance.

These securities are unsuitable for investors seeking capital preservation, steady income, or equity upside participation. Prospective buyers should carefully assess their risk tolerance, investment horizon, and the volatility of the underlying technology stocks over the two-year term.