Bank of Nova Scotia Prices Nasdaq-100 Linked Trigger Autocallable GEARS Due 2031

Overview of Nasdaq-100 Linked Autocallable Debt Structure

The Bank of Nova Scotia’s Trigger Autocallable GEARS are structured senior unsecured debt instruments providing conditional exposure to Nasdaq-100 Index performance. These securities rank equally with other unsecured debt of BNS and lack collateral backing. Their complex payoff profile depends on index movements, differing from traditional fixed-income products.

Rather than paying periodic interest, all investor compensation is derived from the difference between the initial index level set on the trade date, July 29, 2026, and subsequent levels at specified observation and valuation dates over the five-year term.

Automatic Call Feature and Early Redemption

A key characteristic is the automatic call mechanism, enabling BNS to redeem the securities early if the Nasdaq-100 closes at or above its initial level on the observation date of August 5, 2027. In such a case, investors receive principal plus a 12.75% return, and the securities terminate with no further payments. This limits upside participation if the index rallies strongly in the first year.

This call feature allows the issuer to manage liabilities and offers investors a defined early exit, with the 12.75% call return representing the maximum payout if triggered, regardless of further index gains.

Upside Gearing and Positive Return Scenario

If the securities are not called and the Nasdaq-100 finishes above its initial level on the final valuation date, July 29, 2031, investors benefit from an upside gearing multiplier between 1.30 and 1.50 times. This means investors receive principal plus 130% to 150% of the positive index return. For example, a 10% index gain with a 1.30 gearing results in a 13% return on principal.

The exact gearing rate is set at trade date and reflects market conditions. This leverage amplifies gains but only applies if the securities remain outstanding until maturity without early call.

Contingent Principal Protection and Downside Risk

The securities include contingent principal protection if no automatic call occurs and the final index level is at least 75% of the initial level. In this scenario, investors receive full principal at maturity despite any negative index returns, providing a partial loss floor.

If the index falls below 75%, this protection lapses, exposing investors to full downside risk. Maturity payments would then reflect the principal multiplied by the index’s percentage decline, potentially resulting in total loss if the index drops sharply below the threshold.

Issuer Credit Risk and Payment Obligations

All payments depend on the Bank of Nova Scotia’s creditworthiness. Investors face the risk of losing their entire investment if BNS defaults, regardless of index performance or protective features. These securities are not insured by any government agency, including the Canada Deposit Insurance Corporation or the U.S. Federal Deposit Insurance Corporation.

This credit risk is separate from market risk tied to index performance, meaning investors bear dual risks.

Investment Minimum, Pricing, and Settlement Details

The minimum investment is $1,000, representing 100 securities priced at $10 each. Initial estimated value at pricing is between $9.295 and $9.595 per security, below the $10 issue price.

Settlement is expected on July 31, 2026, two business days after the trade date of July 29, 2026. Investors intending to trade before settlement must arrange alternative terms to avoid settlement failures due to the T+2 timeline.

Liquidity and Secondary Market Considerations

The securities will not be listed on any exchange or electronic communication network, limiting liquidity. Investors seeking to sell before maturity may face challenges finding buyers or may have to accept significant discounts. The initial estimated value below issue price reflects embedded options, credit spreads, and structural features.

Secondary market prices may vary significantly from both issue price and estimated value, and future valuations are subject to multiple market factors.

Key Observation and Valuation Dates

The automatic call observation date is August 5, 2027, the sole date determining early redemption. Investors cannot benefit from index recoveries after this date if an automatic call is triggered.

The final valuation date is July 29, 2031, with maturity on July 31, 2031. These dates set the index level for calculating returns and losses over the five-year term, emphasizing the illiquid and duration-sensitive nature of the investment.

Risk Profile and Suitability Warnings

The Bank of Nova Scotia highlights that these securities carry significantly higher risk than conventional bonds. Principal repayment is not guaranteed, and investors face full downside exposure if the index falls below the 75% threshold, combined with issuer credit risk.

Investors are advised not to purchase if they do not fully understand or accept these risks. Comprehensive risk disclosures are provided across multiple documents, which should be reviewed thoroughly before investing. The preliminary pricing materials serve only as an overview of key terms and structure.