The Bank of Nova Scotia filed a preliminary free writing prospectus on October 29, 2026, offering STEP Income Securities linked to the common stock of CrowdStrike Holdings, Inc., with an approximately one-year-and-one-week term and a quarterly interest rate of 18.00% per year.

Key Highlights

  • Interest rate: 18.00% per year, payable quarterly on or about February, May, August, and November 2027.
  • Step Payment: A payment of [$0.10 to $0.50] per unit if the Underlying Stock's Ending Value is at or above 118.00% of the Starting Value at maturity.
  • Principal at risk: The filing states investors face 1-to-1 downside exposure to decreases in the Underlying Stock, with up to 100.00% of principal at risk.
  • Initial estimated value: Expected to be between $9.1644 and $9.4644 per unit, less than the $10.00 public offering price per unit.
  • Fees and charges: An underwriting discount of $0.15 per unit and a hedging-related charge of $0.05 per unit are included; proceeds before expenses to BNS are $9.85 per unit.
  • Volume discount: Purchases of 300,000 units or more in a single transaction by an individual investor, or combined household transactions, carry a public offering price of $9.95 per unit and an underwriting discount of $0.10 per unit.
  • Credit risk: According to the filing, "All payments on the notes subject to the credit risk of The Bank of Nova Scotia," and the notes are not insured by the CDIC, FDIC, or any other governmental agency.

Bank of Nova Scotia STEP Income Securities: CrowdStrike-Linked Terms and Structure

According to the preliminary term sheet filed under Rule 433 against Registration Statement No. 333-298611, The Bank of Nova Scotia is offering STEP Income Securities linked to the common stock of CrowdStrike Holdings, Inc. (Bloomberg symbol: CRWD UW). The notes are senior unsecured debt securities with a principal amount of $10.00 per unit, a maturity date in November 2027, and a term of approximately one year and one week. BofA Securities, Inc. serves as the Calculation Agent, and the notes are being distributed through BofA Securities.

The redemption amount at maturity depends on the Ending Value of CrowdStrike's common stock relative to the Starting Value, which will be set on the pricing date. If the Ending Value equals or exceeds the Step Level of 118.00% of the Starting Value, investors receive, in addition to quarterly interest, a Step Payment of [$0.10 to $0.50] per unit - representing a return of [1.00% to 5.00%] of principal. If the Ending Value is below the Starting Value, the filing states the redemption amount "will be less than the principal amount of your notes, and may be as low as zero," with investors bearing 1-to-1 downside exposure. The Threshold Value is 100.00% of the Starting Value.

The filing discloses that the initial estimated value range of $9.1644 to $9.4644 per unit is lower than the $10.00 public offering price because of the issuer's internal funding rate, the underwriting discount, and the hedging-related charge. The filing notes that "the public offering price you pay to purchase the notes will be greater than the initial estimated value of the notes." The notes have no exchange listing and limited secondary market liquidity, and are described as not bail-inable debt securities as defined in the prospectus.

What Was Disclosed

The Bank of Nova Scotia filed a preliminary free writing prospectus for STEP Income Securities linked to CrowdStrike Holdings common stock, disclosing an 18.00% annual interest rate, a Step Level of 118.00% of the Starting Value, an initial estimated value range of $9.1644 to $9.4644 per unit, and full principal-at-risk downside exposure.