|
Subject to Completion
Preliminary Term Sheet
Dated April 18, 2024
|
Filed Pursuant to Rule 433
Registration Statement No. 333-262557
(To Prospectus dated March 4, 2022 and
Product Supplement STOCK STR-1 dated June 21, 2023) |
|
Units
$10 principal amount per unit
CUSIP No.
 |
Pricing Date*
Settlement Date*
Maturity Date*
|
May , 2024
May , 2024
May , 2027
|
|||
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*Subject to change based on the actual date the notes are priced for initial sale to the public (the “pricing date”)
|
|||||
|
Autocallable Strategic Accelerated Redemption Securities® Linked to a Basket of Three Stocks
■
Automatically callable if the Observation Level on any Observation Date, occurring approximately one, two and three years after the pricing date, is at or above the
Starting Value
■ In the event of an automatic call, the amount payable per unit will be:
■ [$11.40 to $11.50] if called on the first Observation Date
■ [$12.80 to $13.00] if called on the second Observation Date
■ [$14.20 to $14.50] if called on the final Observation Date
■
The Basket will be comprised of the common stocks of ASML Holding N.V., Eli Lilly and Company and Palantir Technologies Inc. (the “Basket Stocks”).
■
If not called on either of the first two Observation Dates, a maturity of approximately three years
■
If not called, 1-to-1 downside exposure to decreases in the Basket with up to 100.00% of your principal amount at risk
■
All payments are subject to the credit risk of The Toronto-Dominion Bank
■
No periodic interest payments
■
In addition to the underwriting discount set forth below, the notes include a hedging-related charge of $0.05 per unit. See “Structuring the Notes”
■
Limited secondary market liquidity, with no exchange listing
■ The notes are unsecured debt securities and are not savings accounts or insured deposits of a bank. The notes are
not insured or guaranteed by the Canada Deposit Insurance Corporation (the “CDIC”), the U.S. Federal Deposit Insurance Corporation (the “FDIC”), or any other governmental agency of Canada, the United States or any other
jurisdiction
|
|||||
The notes are being issued by The Toronto-Dominion Bank (“TD”). There are important differences between the notes and a conventional
debt security, including different investment risks and certain additional costs. See “Risk Factors” beginning on page TS-7 of this term sheet, “Additional Risk Factors” on page TS-8 of this term sheet and “Risk Factors” beginning on page PS-7
of product supplement STOCK STR-1 and page 1 of the prospectus.
The initial estimated value of the notes at the time the terms of the notes are set on the pricing date is expected to be
between $8.798 and $9.098 per unit, which is less than the public offering price listed below, as discussed further under “Summary” on the following page,
“Risk Factors” beginning on page TS-7 of this term sheet and “Structuring the Notes” on page TS-15 of this term sheet for additional information. The actual value of your notes at any time will reflect many factors and cannot be predicted with
accuracy.
None of the U.S. Securities and Exchange Commission (the “SEC”), any state securities commission, or any other regulatory body has approved or disapproved
of these notes or passed upon the adequacy or accuracy of this document, product supplement STOCK STR-1 or the prospectus. Any representation to the contrary is a criminal offense.
|
Per Unit
|
Total
|
|
|
Public offering price(1)
|
$ 10.00
|
$
|
|
Underwriting discount(1)
|
$ 0.20
|
$
|
|
Proceeds, before expenses, to TD
|
$ 9.80
|
$
|
| (1) |
For any purchase of 300,000 units or more in a single transaction by an individual investor or in combined transactions with the investor’s household in this offering, the public offering price and the underwriting discount will be
$9.95 per unit and $0.15 per unit, respectively. See “Supplement to the Plan of Distribution (Conflicts of Interest)” below.
|
The notes:
|
Are Not FDIC Insured
|
Are Not Bank Guaranteed
|
May Lose Value
|
BofA Securities
May , 2024
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
Summary
The Autocallable Strategic Accelerated Redemption Securities® Linked to a Basket of Three Stocks, due May , 2027 (the “notes”) are our senior unsecured debt
securities. The notes are not guaranteed or insured by the CDIC, the FDIC or any other governmental agency, and are not, either directly or indirectly, an obligation of any third party. The notes are not bail-inable debt securities (as defined
in the prospectus) under the CDIC Act. The notes will rank equally with all of our other senior unsecured debt. Any payments due on the notes, including any repayment of principal, will be subject to the credit
risk of TD. The notes will be automatically called at the applicable Call Amount if the Observation Level of the Market Measure, which is the basket of three stocks described below (the “Basket”), on any Observation Date is equal to
or greater than the Call Level. If the notes are not called, at maturity, if the Ending Value is less than the Threshold Value, you will lose all or a portion of the principal amount of your notes. Any payments on the notes will be calculated
based on the $10 principal amount per unit and will depend on the performance of the Basket, subject to our credit risk. See “Terms of the Notes” below.
The economic terms of the notes (including the Call Premiums and Call Amounts) are based on our internal funding rate (which is our internal borrowing rate based on variables such
as market benchmarks and our appetite for borrowing) and several factors, including selling concessions, discounts, commissions or fees expected to be paid in connection with the offering of the notes, the estimated profit that we expect to
earn in connection with structuring the notes, estimated costs which we may incur in connection with the notes and the economic terms of certain related hedging arrangements as discussed further below and under “Structuring the Notes” on page
TS-15.
The Basket will be comprised of the common stock of each of ASML Holding N.V., Eli Lilly and Company and Palantir Technologies Inc. (collectively, the “Basket Stocks”). Each
Basket Stock will be given an approximately equal weight on the pricing date as described under “The Basket” herein.
On the cover page of this term sheet, we have provided the initial estimated value range for the notes. The initial estimated value of your notes on the pricing date will be less
than their public offering price. The range of initial estimated values was determined by reference to our internal pricing models, which take into account a number of variables, typically including expected volatility of the Market Measure,
interest rates (forecasted, current and historical rates), price-sensitivity analysis, time to maturity of the notes and our internal funding rate which take into account a number of variables and are based on a number of subjective
assumptions, which are not evaluated or verified on an independent basis and may or may not materialize. Because our internal funding rate generally represents a discount from the levels at which our benchmark debt securities trade in the
secondary market, the use of an internal funding rate for the notes rather than the levels at which our benchmark debt securities trade in the secondary market is expected, assuming all other economic terms are held constant, to increase the
initial estimated value of the notes and to have an adverse effect on the economic terms of the notes. For more information about the initial estimated value and the structuring of the notes, see the related discussion under “Risk Factors” and
“Structuring the Notes” herein.
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
|
Terms of the Notes
|
|
Issuer:
|
The Toronto-Dominion Bank (“TD”)
|
||
|
Principal
Amount:
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$10.00 per unit
|
||
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Term:
|
Approximately three years, if not called on either of the first two Observation Dates
|
||
|
Market Measure:
|
An approximately equally weighted basket of three stocks comprised of the common stock of each of ASML Holding N.V.
(Bloomberg symbol: “ASML”), Eli Lilly and Company (Bloomberg symbol: “LLY”) and Palantir Technologies Inc. (Bloomberg symbol “PLTR”) (each, a “Basket Stock” and each such company, an “Underlying Company”).
|
||
|
Starting Value:
|
The Starting Value will be set to 100.00 on the pricing date.
|
||
|
Observation
Level:
|
The value of the Market Measure on the applicable Observation Date.
|
||
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Ending Value:
|
The Observation Level of the Market Measure on the final Observation Date.
|
||
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Observation
Dates:
|
On or about May , 2025, May , 2026 and May , 2027 (the final Observation Date), approximately one, two and three years after the pricing date.
The Observation Dates are subject to postponement in the event of Market Disruption Events, as described on page PS-23 of product supplement STOCK STR-1.
|
||
|
Call Level:
|
100.00% of the Starting Value
|
||
|
Call Amounts
(per Unit) and
Call Premiums:
|
[$11.40 to $11.50], representing a Call Premium of [14.00% to 15.00%] of the principal amount, if called on the first Observation Date; [$12.80
to $13.00], representing a Call Premium of [28.00% to 30.00%] of the principal amount, if called on the second Observation Date and [$14.20 to $14.50], representing a Call Premium of [42.00% to 45.00%] of the principal amount, if
called on the final Observation Date. The actual Call Amounts and Call Premiums will be determined on the pricing date.
|
||
|
Call Settlement
Dates:
|
Approximately the fifth business day following the applicable Observation Date, subject to postponement as described on page PS-20 of product supplement STOCK
STR-1; provided however that the Call Settlement Date related to the final Observation Date will be the maturity date.
|
||
|
Price Multiplier:
|
1 for each Basket Stock, subject to adjustment for certain corporate events relating to the Basket Stocks, as described on page PS-22 of product supplement STOCK
STR-1.
|
||
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Threshold Value:
|
100.00% of the Starting Value
|
||
|
Fees and
Charges:
|
The underwriting discount of $0.20 per unit listed on the cover page and the hedging related charge of $0.05 per unit described in “Structuring the Notes” on page TS-15
|
||
|
Calculation
Agents:
|
BofA Securities, Inc. (“BofAS”) and TD, acting jointly
|
|
Payment Determination
|
|
Automatic Call Provision:
 Redemption Amount Determination:
If the notes are not called, you will receive the Redemption Amount per unit on the maturity date, determined as follows:
 Because the Threshold Value for the notes is equal to the Starting Value, you will lose all or a portion of your investment if the Ending Value is
less than the Starting Value.
|
|
|
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
The terms and risks of the notes are contained in this term sheet and in the following:
| ■ |
Product supplement STOCK STR-1 dated June 21, 2023:
|
| ■ |
Prospectus dated March 4, 2022:
|
These documents, including this term sheet (together, the “Note Prospectus”), have been filed as part of a registration statement with the SEC, and may, without cost, be accessed on the SEC
website as indicated above or obtained from Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) or BofAS by calling 1-800-294-1322. Before you invest, you should read the Note Prospectus, including this term sheet, for
information about us and this offering. Any prior or contemporaneous oral statements and any other written materials you may have received are superseded by the Note Prospectus. Capitalized terms used but not defined in this term sheet have
the meanings set forth in product supplement STOCK STR-1. In the event of any conflict the following hierarchy will govern: first, this term sheet; second, product supplement STOCK STR-1; and last, the prospectus.
Unless otherwise indicated or unless the context requires otherwise, all references in this document to “we,” “us,” “our,” or similar references are to TD.
Investor Considerations
|
You may wish to consider an investment in the notes if:
|
|
■
|
You anticipate that the Observation Level of the Market Measure on any of the Observation Dates will be equal to or greater than the Call Level and, if the notes are automatically
called prior to the final Observation Date, you accept an early exit from your investment.
|
|
■
|
You accept that the return on the notes will be limited to the return represented by the applicable Call Premium even if the percentage change in the value of the Market Measure is
greater than the applicable Call Premium.
|
|
■
|
You are willing to risk a loss of principal and return if the notes are not automatically called and the Basket decreases from the Starting Value to the Ending Value.
|
|
■
|
You are willing to forgo the interest payments that are paid on conventional interest bearing debt securities.
|
|
■
|
You are willing to forgo dividends or other benefits of owning shares of the Basket Stocks.
|
|
■
|
You are willing to accept a limited or no market for sales prior to maturity, and understand that the market prices for the notes, if any, will be affected by various factors,
including our actual and perceived creditworthiness, our internal funding rate and fees and charges on the notes, as described on page TS-3.
|
|
■
|
You are willing to assume our credit risk, as issuer of the notes, for all payments under the notes, including the Call Amount or the Redemption Amount.
|
|
The notes may not be an appropriate investment for you if:
|
|
■
|
You wish to make an investment that cannot be automatically called.
|
|
■
|
You believe that the value of the Basket will decrease from the Starting Value to the Ending Value.
|
|
■
|
You anticipate that the Observation Level will be less than the Call Level on each Observation Date.
|
|
■
|
You seek an uncapped return on your investment.
|
|
■
|
You seek principal repayment or preservation of capital.
|
|
■
|
You seek interest payments or other current income on your investment.
|
|
■
|
You want to receive the benefits of owning shares of the Basket Stocks, including dividends or other distributions.
|
|
■
|
You seek an investment for which there will be a liquid secondary market.
|
|
■
|
You are unwilling or are unable to take market risk on the notes or to accept the credit risk of TD as issuer of the notes.
|
|
|
We urge you to consult your investment, legal, tax, accounting, and other advisors concerning an investment in the notes.
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
Examples of Hypothetical Payments
The following examples are for purposes of illustration only. They are based on hypothetical values and show hypothetical
returns on the notes. They illustrate the calculation of the Call Amount or Redemption Amount, as applicable, based on the hypothetical terms set forth below. The actual amount you receive and the resulting
return will depend on the actual Observation Levels, Call Premiums, and term of your investment.
The following examples do not take into account any tax consequences from investing in the notes. These examples are based on:
| (1) |
the Starting Value of 100.00;
|
| (2) |
the Threshold Value of 100.00;
|
| (3) |
the Call Level of 100.00;
|
| (4) |
an expected term of the notes of approximately three years, if the notes are not called on either of the first two Observation Dates;
|
| (5) |
a Call Premium of 14.50% of the principal amount if the notes are called on the first Observation Date, 29.00% if called on the second Observation Date and 43.50% if called on the final Observation Date (the midpoint of the
applicable Call Premium ranges); and
|
| (6) |
Observation Dates occurring approximately one, two and three years after the pricing date.
|
For recent hypothetical values of the Basket, see “The Basket” section below. For recent actual prices of the Basket Stocks, see “The Basket Stocks”
section below. In addition, all payments on the notes are subject to issuer credit risk. If TD, as issuer, becomes unable to meet its obligations as they become due, you could lose some or all of your investment.
Notes Are Called on an Observation Date
The notes will be called at $10.00 plus the applicable Call Premium if the Observation Level on one of the Observation Dates is equal to or greater than the Call Level.
Example 1 - The Observation Level on the first Observation Date is 150.00. Therefore, the notes will be called at $10.00 plus the Call Premium of $1.45 =
$11.45 per unit.
Example 2 - The Observation Level on the first Observation Date is below the Call Level, but the Observation Level on the second Observation Date is
105.00. Therefore, the notes will be called at $10.00 plus the Call Premium of $2.90 = $12.90 per unit.
Example 3 - The Observation Levels on the first two Observation Dates are below the Call Level, but the Observation Level on the third and final
Observation Date is 125.00. Therefore, the notes will be called at $10.00 plus the Call Premium of $4.35 = $14.35 per unit.
Notes Are Not Called on Any Observation Date
Example 4 - The notes are not called on any Observation Date and the Ending Value is less than the Threshold Value. The Redemption Amount will be less, and
possibly significantly less, than the principal amount. For example, if the Ending Value is 85.00, the Redemption Amount per unit will be:
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
Summary of the Hypothetical Examples
|
Notes Are Called on an Observation
Date
|
Notes Are
Not Called
on Any
Observation
Date
|
|||
|
Example 1
|
Example 2
|
Example 3
|
Example 4
|
|
|
Starting Value
|
100.00
|
100.00
|
100.00
|
100.00
|
|
Call Level
|
100.00
|
100.00
|
100.00
|
100.00
|
|
Threshold Value
|
100.00
|
100.00
|
100.00
|
100.00
|
|
Observation Level on the First Observation Date
|
150.00
|
90.00
|
90.00
|
88.00
|
|
Observation Level on the Second Observation Date
|
N/A
|
105.00
|
90.00
|
78.00
|
|
Observation Level on the Third Observation Date
|
N/A
|
N/A
|
125.00
|
85.00
|
|
Return on the Basket
|
50.00%
|
5.00%
|
25.00%
|
-15.00%
|
|
Return on the Notes
|
14.50%
|
29.00%
|
43.50%
|
-15.00%
|
|
Call Amount / Redemption Amount per Unit
|
$11.45
|
$12.90
|
$14.35
|
$8.50
|
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
Risk Factors
There are important differences between the notes and a conventional debt security. An investment in the notes involves significant risks, including those listed below. You
should carefully review the more detailed explanation of risks relating to the notes in the “Risk Factors” sections beginning on page PS-7 of product supplement STOCK STR-1 and page 7 of the prospectus. We also urge you to consult your
investment, legal, tax, accounting, and other advisors as to the risks entailed by an investment in the notes and the suitability of the notes in light of your particular circumstances before you invest in the notes.
Structure-Related Risks
| ■ |
If the notes are not automatically called, your investment will result in a loss; there is no guaranteed return of principal.
|
| ■ |
Your return on the notes may be less than the yield you could earn by owning a conventional fixed or floating rate debt security of comparable maturity.
|
| ■ |
Your investment return is limited to the return represented by the applicable Call Premium and may be less than a comparable investment directly in the Basket Stocks.
|
Market Measure-Related Risks
| ■ |
No Underlying Company will have any obligations regarding the notes and none of us, MLPF&S or BofAS will perform any due diligence procedures with respect to any Underlying Company in connection with this offering.
|
| ■ |
Changes in the prices of one or more of the Basket Stocks may be offset by changes in the prices of one or more of the other Basket Stocks.
|
| ■ |
You will have no rights of a holder of the Basket Stocks and you will not be entitled to receive any shares of the Basket Stocks or dividends or other distributions by any Underlying Company.
|
| ■ |
While we, MLPF&S, BofAS or our or their respective affiliates may from time to time own shares of the Underlying Companies, none of us, MLPF&S, BofAS or our or their respective affiliates control any Underlying Company, and
have not verified any disclosure made by any Underlying Company.
|
| ■ |
Payments on the notes will not be adjusted for all corporate events that could affect the Basket Stocks. See “Description of The Notes— Anti-Dilution Adjustments” beginning on page PS-23 of product supplement STOCK STR-1.
|
Valuation and Market-Related Risks
| ■ |
The initial estimated value of your notes on the pricing date will be less than their public offering price. The difference between the public offering price of your notes and the initial estimated value of the notes reflects costs
and expected profits associated with selling and structuring the notes, as well as hedging our obligations under the notes (including, but not limited to, the hedging related charge, as further described under “Structuring the Notes” on
page TS-15). Because hedging our obligations entails risks and may be influenced by market forces beyond our control, this hedging may result in a profit that is more or less than expected, or a loss and the amount of any such profit or
loss will not be known until the maturity date.
|
| ■ |
The initial estimated value of your notes is based on our internal funding rate. The internal funding rate used in the determination of the initial estimated value of the notes generally represents a discount from the credit spreads
for our conventional fixed-rate debt securities and the borrowing rate we would pay for our conventional fixed-rate debt securities. This discount is based on, among other things, our view of the funding value of the notes as well as
the higher issuance, operational and ongoing liability management costs of the notes in comparison to those costs for our conventional fixed-rate debt, as well as estimated financing costs of any hedge positions (including, but not
limited to, the hedging related charge, as further described under “Structuring the Notes” on page TS-15), taking into account regulatory and internal requirements. If the interest rate implied by the credit spreads for our conventional
fixed-rate debt securities, or the borrowing rate we would pay for our conventional fixed-rate debt securities were to be used, we would expect the economic terms of the notes to be more favorable to you. Additionally, assuming all
other economic terms are held constant, the use of an internal funding rate for the notes is expected to increase the initial estimated value of the notes and have an adverse effect on the economic terms of the notes.
|
| ■ |
The initial estimated value of the notes is based on our internal pricing models, which may prove to be inaccurate and may be different from the pricing models of other financial institutions, including BofAS and MLPF&S. The
initial estimated value of your notes when the terms of the notes are set on the pricing date is based on our internal pricing models, which take into account a number of variables, typically including the expected volatility of the
Market Measure, interest rates (forecasted, current and historical rates), price-sensitivity analysis, time to maturity of the notes and our internal funding rate, and are based on a number of subjective assumptions, which are not
evaluated or verified on an independent basis and may or may not materialize. Further, our pricing models may be different from other financial institutions’ pricing models, including those of BofAS and MLPF&S, and the methodologies
used by us to estimate the value of the notes may not be consistent with those of other financial institutions that may be purchasers or sellers of notes in any secondary market. As a result, the secondary market price of your notes, if
any, may be materially less than the initial estimated value of the notes determined by reference to our internal pricing models. In addition, market conditions and other relevant factors in the future may change and any assumptions may
prove to be incorrect.
|
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
| ■ |
The initial estimated value of your notes is not a prediction of the prices at which you may sell your notes in the secondary market, if any exists, and such secondary market prices, if any, will likely be less than the public
offering price of your notes, may be less than the initial estimated value of your notes and could result in a substantial loss to you. The initial estimated value of the notes will not be a prediction of the prices at which MLPF&S,
BofAS, their or our respective affiliates or third parties may be willing to purchase the notes from you in secondary market transactions (if they are willing to purchase, which they are not obligated to do). The price at which you may
be able to sell your notes in the secondary market at any time, if any, will be influenced by many factors that cannot be predicted, such as market conditions, and any bid and ask spread for similar sized trades, and may be
substantially less than the initial estimated value of the notes. Further, as secondary market prices of your notes take into account the levels at which our debt securities trade in the secondary market, and do not take into account
our various costs and expected profits associated with selling and structuring the notes, as well as hedging our obligations under the notes, secondary market prices of your notes will likely be less than the public offering price of
your notes. As a result, the price at which MLPF&S, BofAS, their or our respective affiliates or third parties may be willing to purchase the notes from you in secondary market transactions, if any, will likely be less than the
price you paid for your notes, and any sale prior to maturity could result in a substantial loss to you.
|
| ■ |
A trading market is not expected to develop for the notes. None of us, any of our affiliates, MLPF&S or BofAS is obligated to make a market for, or to repurchase, the notes. There is no assurance that any party will be willing to
purchase your notes at any price in any secondary market.
|
Conflict-Related Risks
| ■ |
Our business, hedging and trading activities, and those of MLPF&S, BofAS and our and their respective affiliates (including trades in shares of the Basket Stocks), and any hedging and trading activities we, MLPF&S, BofAS or
our or their respective affiliates engage in for our clients’ accounts, may affect the market value of, and return on, the notes and may create conflicts of interest with you.
|
| ■ |
There may be potential conflicts of interest involving the calculation agents, one of which is us and one of which is BofAS, as the determinations made by the calculation agents may be discretionary and could adversely affect any
payment on the notes.
|
General Credit-Related Risks
| ■ |
Payments on the notes are subject to our credit risk, and actual or perceived changes in our creditworthiness are expected to affect the value of the notes. If we become unable to meet our financial obligations as they become due,
you may lose some or all of your investment.
|
Tax-Related Risks
| ■ |
The U.S. federal income tax consequences of the notes are uncertain and, because of this uncertainty, there is a risk that the U.S. federal income tax consequences of the notes could differ materially and adversely from the treatment
described below in “Supplemental Discussion of U.S. Federal Income Tax Consequences”, as described further in product supplement STOCK STR-1 under “Material U.S. Federal Income Tax Consequences — Alternative Treatments”. You should
consult your tax advisor as to the tax consequences of an investment in the notes and the potential alternative treatments.
|
| ■ |
For a discussion of the Canadian federal income tax consequences of investing in the notes, please see the discussion in product supplement STOCK STR-1 under “Supplemental Discussion of Canadian Tax Consequences” and the further
discussion herein under “Summary of Canadian Federal Income Tax Consequences”. If you are not a Non-resident Holder (as that term is defined in the prospectus) for Canadian federal income tax purposes or if you acquire the notes in the
secondary market, you should consult your tax advisors as to the consequences of acquiring, holding and disposing of the notes and receiving the payments that might be due under the notes.
|
Additional Risk Factors
Additional Market Measure-Related Risks
The notes are subject to risks associated with investments in securities linked to the value of non-U.S. equity securities. Some of the Basket Stocks are issued by
non-U.S. companies. Investments in securities linked to the value of non-U.S. equity securities, such as the notes, involve risks associated with the home countries of the issuers of those non-U.S. equity securities. The prices of securities in
non-U.S. markets may be affected by political, economic, financial and social factors in those countries, or global regions, including changes in government, economic and fiscal policies and currency exchange laws.
Limited trading history. Some of the Basket Stocks may have limited historical performance and an investment with a return based on its performance may be
more risky than a comparable investment with a return based on the performance of a common stock with a more established record of performance.
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
The Basket
The Basket is designed to allow investors to participate in the percentage changes in the prices of the Basket Stocks from the Starting Value to the Ending Value of the Basket. The Basket Stocks
are described in the section “The Basket Stocks” below. Each Basket Stock will be assigned an initial weight on the pricing date, as set forth in the table below.
For more information on the calculation of the value of the Basket, please see the section entitled “Description of the Notes—Basket Market Measures” beginning on page PS-29 of product supplement
STOCK STR-1.
If April 15, 2024, were the pricing date, for each Basket Stock, the Initial Component Weight, the Closing Market Price, the hypothetical Component Ratio and the initial contribution to the
Basket value would be as follows:
|
Basket Stock
|
Bloomberg
Symbol
|
Initial
Component
Weight
|
Closing
Market
Price(1)(2)
|
Hypothetical
Component
Ratio(1)(3)
|
Initial Basket
Value
Contribution
|
|
ASML Holding N.V.
|
ASML
|
33.34%
|
$954.82
|
0.03491758
|
33.34
|
|
Eli Lilly and Company
|
LLY
|
33.33%
|
$750.77
|
0.04395487
|
33.33
|
|
Palantir Technologies Inc.
|
PLTR
|
33.33%
|
$21.90
|
1.50684932
|
33.33
|
|
Starting Value
|
100.00
|
| (1) |
The actual Closing Market Price of each Basket Stock and the resulting actual Component Ratios will be determined on the pricing date, subject to adjustment as more fully described in the section entitled “Description of the
Notes—Basket Market Measures—Determination of the Component Ratio for Each Basket Stock” beginning on page PS-29 of product supplement STOCK STR-1 if a Market Disruption Event occurs on the pricing date as to any Basket Stock.
|
| (2) |
These were the Closing Market Prices of the Basket Stocks on April 15, 2024.
|
| (3) |
Each hypothetical Component Ratio equals the Initial Component Weight of the relevant Basket Stock (as a percentage) multiplied by 100.00, and then divided by the Closing Market Price of that Basket Stock on April 15, 2024 and
rounded to eight decimal places.
|
The calculation agents will calculate the value of the Basket on each Observation Date by summing the products of (a) the Closing Market Price for each Basket Stock on such day (multiplied by its
Price Multiplier on such day) and (b) the Component Ratio applicable to such Basket Stock. The Price Multiplier for each Basket Stock will initially be 1, and is subject to adjustment as described in product
supplement STOCK STR-1. If (i) a Market Disruption Event occurs as to any Basket Stock on a scheduled Observation Date or (ii) the scheduled Observation Date is determined by the calculation agents not to be a trading day for any Basket Stock
by reason of an extraordinary event, occurrence, declaration or otherwise, the Closing Market Price of that Basket Stock will be determined as more fully described in the section entitled “Description of the Notes— Basket Market
Measures—Observation Level and Ending Value of the Basket” beginning on page PS-30 of product supplement STOCK STR-1.
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
While actual historical information on the Basket will not exist before the pricing date, the following graph sets forth the hypothetical historical performance of the
Basket from September 30, 2020 through April 15, 2024. The graph is based upon actual daily historical prices of the Basket Stocks, hypothetical Component Ratios based on the Closing Market Prices of the Basket Stocks as of September 29, 2020,
and a Basket value of 100.00 as of that date. This hypothetical historical data on the Basket is not necessarily indicative of the future performance of the Basket or what the value of the notes may be. Any hypothetical historical upward or
downward trend in the value of the Basket during any period set forth below is not an indication that the value of the Basket is more or less likely to increase or decrease at any time over the term of the notes.
Hypothetical Historical Performance of the Basket
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Autocallable Strategic Accelerated Redemption Securities®
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The Basket Stocks
We have derived the following information from publicly available documents. We have not independently verified the accuracy or completeness of the following information.
Because each Basket Stock is registered under the Securities Exchange Act of 1934, as amended, each Underlying Company is required to file periodically certain financial and other information
specified by the SEC. Information provided to or filed with the SEC by the Underlying Companies can be located through the SEC’s website at sec.gov by reference to the applicable CIK number set forth below.
This term sheet relates only to the notes and does not relate to the Basket Stocks or to any other securities of the Underlying Companies. None of us, MLPF&S, BofAS or any of our or their
respective affiliates has participated or will participate in the preparation of any Underlying Company’s publicly available documents. None of us, MLPF&S, BofAS or any of our or their respective affiliates has made any due diligence
inquiry with respect to any Underlying Company in connection with the offering of the notes. None of us, MLPF&S, BofAS or any of our or their respective affiliates makes any representation that the publicly available documents or any other
publicly available information regarding any Underlying Company are accurate or complete. Furthermore, there can be no assurance that all events occurring prior to the date of this term sheet, including events that would affect the accuracy or
completeness of these publicly available documents that would affect the trading price of a Basket Stock, have been or will be publicly disclosed. Subsequent disclosure of any events or the disclosure of or failure to disclose material future
events concerning an Underlying Company could affect the price of its Basket Stock and therefore could affect your return on the notes. The selection of the Basket Stocks is not a recommendation to buy or sell the Basket Stocks.
ASML Holding N.V.
ASML Holding N.V. (“ASML”) is a manufacturer of chip-making equipment. ASML trades on the Nasdaq Stock Market LLC under the ticker symbol “ASML”. ASML’s CIK number is 0000937966.
The following graph shows the daily historical performance of ASML on its primary exchange in the period from January 1, 2014 through April 15, 2024. We
obtained this historical data from Bloomberg L.P. We have not independently verified the accuracy or completeness of the information obtained from Bloomberg L.P. On April 15, 2024, the Closing Market Price of ASML was $954.82. The graph below
may have been adjusted to reflect certain corporate actions such as stock splits and reverse stock splits.
Historical Performance of ASML
This historical data on ASML is not necessarily indicative of the future performance of ASML or what the value of the notes may be. Any
historical upward or downward trend in the price per share of ASML during any period set forth above is not an indication that the price per share of ASML is more or less likely to increase or decrease at any time over the term of the notes.
Before investing in the notes, you should consult publicly available sources for the prices and trading patterns of ASML.
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Autocallable Strategic Accelerated Redemption Securities®
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Eli Lilly and Company
Eli Lilly and Company (“Eli Lilly”) is a drug manufacturer that discovers, develops, manufactures and markets human pharmaceutical products. Eli Lilly trades on the New York Stock Exchange under
the ticker symbol “LLY”. Eli Lilly’s CIK number is 0000059478.
The following graph shows the daily historical performance of Eli Lilly on its primary exchange in the period from January 1, 2014 through April 15, 2024.
We obtained this historical data from Bloomberg L.P. We have not independently verified the accuracy or completeness of the information obtained from Bloomberg L.P. On April 15, 2024, the Closing Market Price of Eli Lilly was $750.77. The
graph below may have been adjusted to reflect certain corporate actions such as stock splits and reverse stock splits.
Historical Performance of Eli Lilly
This historical data on Eli Lilly is not necessarily indicative of the future performance of Eli Lilly or what the value of the notes
may be. Any historical upward or downward trend in the price per share of Eli Lilly during any period set forth above is not an indication that the price per share of Eli Lilly is more or less likely to increase or decrease at any time over the
term of the notes.
Before investing in the notes, you should consult publicly available sources for the prices and trading patterns of Eli Lilly.
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
Palantir Technologies Inc.
Palantir Technologies Inc. (“Palantir”) builds software platforms for government and commercial institutions. Palantir trades on the New York Stock Exchange under the ticker symbol “PLTR” and
commenced trading on September 30, 2020. Accordingly, the common stock of Palantir has limited historical performance and an investment with a return based on its performance may be more risky than a comparable investment with a return based on
the performance of a common stock with a more established record of performance. The future performance of the common stock of Palantir cannot be predicted based on its historical performance and may bear little or no relation to its historical
performance. Palantir’s CIK number is 0001321655.
The following graph shows the daily historical performance of Palantir on its primary exchange in the period from September 30, 2020 through April 15, 2024.
We obtained this historical data from Bloomberg L.P. We have not independently verified the accuracy or completeness of the information obtained from Bloomberg L.P. On April 15, 2024, the Closing Market Price of Palantir was $21.90. The graph
below may have been adjusted to reflect certain corporate actions such as stock splits and reverse stock splits.
Historical Performance of Palantir
This historical data on Palantir is not necessarily indicative of the future performance of Palantir or what the value of the notes may
be. Any historical upward or downward trend in the price per share of Palantir during any period set forth above is not an indication that the price per share of Palantir is more or less likely to increase or decrease at any time over the term
of the notes.
Before investing in the notes, you should consult publicly available sources for the prices and trading patterns of Palantir.
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
Supplement to the Plan of Distribution (Conflicts of Interest)
Under our distribution agreement, we have appointed TDS, an affiliate of TD, and BofAS as agents for the sale of the notes. TDS will purchase the notes from us, and BofAS will purchase the notes
from TDS, each at the public offering price less the indicated underwriting discount indicated on the cover hereof MLPF&S will purchase the notes from BofAS for resale, and will receive a selling concession in connection with the sale of
the notes in an amount up to the full amount of the underwriting discount indicated on the cover of this term sheet. Except as described below, BofAS and MLPF&S will offer the notes at the public offering price set forth on the cover page
hereof. We or one of our affiliates will also pay a fee to LFT Securities, LLC for providing certain electronic platform services with respect to this offering, which will have an adverse effect on the economic terms of the notes. An affiliate
of each of TD and BofAS has an ownership interest in LFT Securities, LLC. TD will reimburse TDS for certain expenses in connection with its role in the offer and sale of the notes, and TD will pay TDS a fee in connection with its role in the
offer and sale of the notes...
We may deliver the notes against payment therefor in New York, New York on a date that is greater than two business days following the pricing date. Under Rule 15c6-1 of the Securities Exchange
Act of 1934, as amended, trades in the secondary market generally are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, if the initial settlement of the notes occurs more than
two business days from the pricing date, purchasers who wish to trade the notes more than two business days prior to the settlement date will be required to specify alternative settlement arrangements to prevent a failed settlement.
The notes will not be listed on any securities exchange. In the original offering of the notes, the notes will be sold in minimum investment amounts of 100 units. If you place an order to
purchase the notes, you are consenting to MLPF&S and/or one of its affiliates acting as a principal in effecting the transaction for your account.
MLPF&S, BofAS or our or their affiliates may repurchase and resell the notes, with repurchases and resales being made at prices related to then-prevailing market prices or at negotiated
prices, and these prices will include MLPF&S’ and BofAS’ (or such other entity’s) trading commissions and mark-ups or mark-downs. MLPF&S and BofAS (or such other entity) may act as principal or agent in these market-making transactions,
but is not obligated to engage in any such transactions. At MLPF&S’ and BofAS’ discretion, MLPF&S and BofAS may offer to buy the notes in the secondary market at a price that may exceed TD’s initial estimated value of the notes for a
short, undetermined initial period after the issuance of the notes. Notwithstanding the foregoing, any price offered by us, MLPF&S, BofAS or our or their affiliates for the notes will be based on then-prevailing market conditions and other
considerations, including the performance of the Basket and the remaining term of the notes. However, none of us, MLPF&S, BofAS or any of our or their respective affiliates is obligated to purchase your notes at any price or at any time,
and we cannot assure you that we, MLPF&S, BofAS or any of our or their respective affiliates will purchase your notes at a price that equals or exceeds the initial estimated value of the notes.
BofAS has informed us that, as of the date hereof, it expects that if you hold your notes in a BofAS account, the value of the notes shown on your account statement will be based on BofAS’
estimate of the value of the notes if BofAS or another of its affiliates were to make a market in the notes, which it is not obligated to do. That estimate will be based upon the price that BofAS may pay for the notes in light of
then-prevailing market conditions, and other considerations, as mentioned above, and will include transaction costs. At certain times, this price may be higher than or lower than our initial estimated value of the notes.
TDS is an affiliate of TD and, as such, has a “conflict of interest” in this offering within the meaning of Financial Industry Regulatory Authority, Inc. (“FINRA”) Rule 5121. Additionally, TD
will receive the net proceeds from the initial public offering of the notes, thus creating an additional conflict of interest within the meaning of FINRA Rule 5121. Consequently, this offering of the notes will be conducted in compliance with
the provisions of FINRA Rule 5121 and TDS is not permitted to sell the notes to an account over which it exercises discretionary authority without the prior specific written approval of the account holder.
The distribution of the Note Prospectus in connection with these offers or sales will be solely for the purpose of providing investors with the description of the terms of the notes that was made
available to investors in connection with their initial offering. Secondary market investors should not, and will not be authorized to, rely on the Note Prospectus for information regarding TD or for any purpose other than that described in the
immediately preceding sentence.
An investor’s household, as referenced on the cover of this term sheet, will generally include accounts held by any of the following, as determined by MLPF&S in its
discretion and acting in good faith based upon information then available to MLPF&S:
| • |
the investor’s spouse (including a domestic partner), siblings, parents, grandparents, spouse’s parents, children and grandchildren, but excluding accounts held by aunts, uncles, cousins, nieces, nephews
or any other family relationship not directly above or below the individual investor;
|
| • |
a family investment vehicle, including foundations, limited partnerships and personal holding companies, but only if the beneficial owners of the vehicle consist solely of the investor or members of the
investor’s household as described above; and
|
| • |
a trust where the grantors and/or beneficiaries of the trust consist solely of the investor or members of the investor’s household as described above; provided that, purchases of the notes by a trust
generally cannot be aggregated together with any purchases made by a trustee’s personal account.
|
Purchases in retirement accounts will not be considered part of the same household as an individual investor’s personal or other non-retirement account, except for individual
retirement accounts, simplified employee pension plans, savings incentive match plan for employees and single-participant or owners only accounts (i.e., retirement accounts held by self-employed individuals, business owners or partners with no
employees other than their spouses).
Please contact your MLPF&S financial advisor if you have any questions about the application of these provisions to your specific circumstances or think you are eligible.
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
Structuring the Notes
The notes are our senior unsecured debt securities, Series E, the return on which is linked to the performance of the Basket. As is the case for all of our debt securities, including our
market-linked notes, the economic terms of the notes reflect our actual or perceived creditworthiness at the time of pricing. Our internal funding rate generally represents a discount from the credit spreads for our conventional fixed-rate debt
securities and the borrowing rate we would pay for our conventional fixed-rate debt securities. If the interest rate implied by the credit spreads for our conventional fixed-rate debt securities, or the borrowing rate we would pay for our
conventional fixed-rate debt securities were to be used, we would expect the economic terms of the notes to be more favorable to you. Therefore, due to these factors, the public offering price you pay to purchase the notes will be greater than
the initial estimated value of the notes.
Payment on the notes, including the amount you receive at maturity or upon an automatic call, will be calculated based on the performance of the Basket and the $10 per unit principal amount. In
order to meet these payment obligations, at the time we issue the notes, we may choose to enter into certain hedging arrangements (which may include call options, put options or other derivatives) with BofAS, MLPF&S or one of their
affiliates. The terms of these hedging arrangements are determined by seeking bids from market participants, which may include MLPF&S, BofAS and one or more of our or their affiliates, and take into account a number of factors, including
our creditworthiness, interest rate movements, the volatility of the Basket Stocks, the tenor of the notes and the tenor of the hedging arrangements. The economic terms and initial estimated value of the notes depend, in part, on the terms of
these hedging arrangements.
BofAS has advised us that the hedging arrangements will include a hedging related charge of approximately $0.05 per unit, reflecting an estimated profit to be credited to BofAS from these
transactions. Since hedging entails risk and may be influenced by unpredictable market forces, additional profits and losses from these hedging arrangements may be realized by BofAS or any third party hedge providers.
For further information, see “Risk Factors - Conflict-Related Risks” beginning on page PS-14 and “Use of Proceeds and Hedging” on page PS-18 of product supplement STOCK STR-1.
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
Summary of Canadian Federal Income Tax Consequences
For a discussion of the Canadian federal income tax consequences of investing in the notes, please see the discussion in product supplement STOCK STR-1 under “Supplemental Discussion of Canadian
Tax Consequences” and under “Tax Consequences – Canadian Taxation” in the accompanying prospectus. If you are not a Non-resident Holder (as that term is defined in the prospectus) for Canadian federal income tax purposes or if you acquire the
notes in the secondary market, you should consult your tax advisors as to the consequences of acquiring, holding and disposing of the notes and receiving the payments that might be due under the notes. We will not pay any additional amounts as
a result of any withholding required by reason of the Hybrid Mismatch Proposals (as defined in product supplement STOCK STR-1).
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
Supplemental Discussion of U.S. Federal Income Tax Consequences
The U.S. federal income tax consequences of your investment in the notes are uncertain. No statutory, regulatory, judicial or administrative authority directly discusses how
the notes should be treated for U.S. federal income tax purposes. Some of these tax consequences are summarized below, but we urge you to read the more detailed discussion under “Material U.S. Federal Income Tax Consequences” beginning on page
PS-35 of product supplement STOCK STR-1 and to discuss the tax consequences of your particular situation with your tax advisor. This discussion is based upon the U.S. Internal Revenue Code of 1986, as amended (the “Code”), final, temporary and
proposed U.S. Department of the Treasury (the “Treasury”) regulations, rulings and decisions, in each case, as available and in effect as of the date hereof, all of which are subject to change, possibly with retroactive effect. Tax consequences
under state, local and non-U.S. laws are not addressed herein. No ruling from the U.S. Internal Revenue Service (the “IRS”) has been sought as to the U.S. federal income tax consequences of your investment in the notes, and the following
discussion is not binding on the IRS. Except as discussed under the heading “Non-U.S. Holders”, this discussion is applicable only to a U.S. holder that acquires notes upon initial issuance and holds its notes as a capital asset for U.S.
federal income tax purposes.
U.S. Tax Treatment. Pursuant to the terms of the notes, TD and you agree, in the absence of a statutory or regulatory change or an administrative
determination or judicial ruling to the contrary, to characterize your notes as prepaid derivative contracts with respect to the Market Measure. Holders are urged to consult their tax advisors concerning the significance, and the potential
impact, of the above characterization. If your notes are so treated, upon the taxable disposition (including cash settlement) of a note, you generally should recognize gain or loss in an amount equal to the difference between the amount
realized on such taxable disposition and your tax basis in the note. Your tax basis in a note generally should equal your cost for the note. Such gain or loss should generally be long-term capital gain or loss if you have held your notes for
more than one year (otherwise such gain or loss should be short-term capital gain or loss if held for one year or less). The deductibility of capital losses is subject to limitations.
However, it is possible that the IRS could assert that your holding period in respect of your notes should end on the date on which the amount you are entitled to receive upon maturity or
automatic call of your notes is determined, even though you will not receive any amounts from TD in respect of your notes prior to the maturity or automatic call of your notes. In such case, you may be treated as having a holding period in
respect of your notes prior to the maturity or automatic call of your notes, and such holding period may be treated as less than one year even if you receive cash upon the maturity or automatic call of your notes at a time that is more than one
year after the beginning of your holding period.
Although uncertain, it is possible that the Call Premium, or proceeds received from the taxable disposition of your notes prior to the Call Settlement Date that could be attributed to the
expected Call Premium, could be treated as ordinary income. You should consult your tax advisor regarding this risk.
Based on certain factual representations received from us, our special U.S. tax counsel, Fried, Frank, Harris, Shriver & Jacobson LLP, is of the opinion that it would be
reasonable to treat your notes in the manner described above. However, because there is no authority that specifically addresses the tax treatment of the notes, it is possible that your notes could alternatively be treated for tax purposes as a
single contingent payment debt instrument or pursuant to some other characterization, such that the timing and character of your income from the notes could differ materially and adversely from the treatment described above, as described
further under “Material U.S. Federal Income Tax Consequences — Alternative Treatments” on page PS-37 of product supplement STOCK STR-1.
Except to the extent otherwise required by law, TD intends to treat your notes for U.S. federal income tax purposes in accordance with the treatment described above and under “Material U.S.
Federal Income Tax Consequences” of the product supplement STOCK STR-1, unless and until such time as the Treasury and the IRS determine that some other treatment is more appropriate.
Section 1297. We will not attempt to ascertain whether any Basket Stock would be treated as a “passive foreign investment company” (a “PFIC”) within the meaning of Section 1297 of the U.S.
Internal Revenue Code of 1986, as amended (the “Code”). If any such entity were so treated, certain adverse U.S. federal income tax consequences might apply to U.S. holders upon the taxable disposition (including cash settlement) of the notes.
You should refer to information filed with the SEC or an equivalent governmental authority by such entities and consult your tax advisor regarding the possible consequences to you if such entity is or becomes a PFIC.
Notice 2008-2. In 2007, the IRS released a notice that may affect the taxation of holders of the notes. According to Notice 2008-2, the IRS and the
Treasury are actively considering whether a holder of an instrument such as the notes should be required to accrue ordinary income on a current basis. It is not possible to determine what guidance they will ultimately issue, if any. It is
possible, however, that under such guidance, holders of the notes will ultimately be required to accrue income currently and this could be applied on a retroactive basis. The IRS and the Treasury are also considering other relevant issues,
including whether additional gain or loss from such instruments should be treated as ordinary or capital, whether non-U.S. holders of such instruments should be subject to withholding tax on any deemed income accruals, and whether the special
“constructive ownership rules” of Section 1260 of the Code should be applied to such instruments. Both U.S. and non-U.S. holders are urged to consult their tax advisors concerning the significance, and the potential impact, of the above
considerations on their investments in the notes.
Medicare Tax on Net Investment Income. U.S. holders that are individuals, estates or certain trusts are subject to an additional 3.8% tax on all or a
portion of their “net investment income,” or “undistributed net investment income” in the case of an estate or trust, which may
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Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
include any income or gain realized with respect to the notes, to the extent of their net investment income or undistributed net investment income (as the case may be) that, when added to their other modified
adjusted gross income, exceeds $200,000 for an unmarried individual, $250,000 for a married taxpayer filing a joint return (or a surviving spouse), $125,000 for a married individual filing a separate return or the dollar amount at which the
highest tax bracket begins for an estate or trust. The 3.8% Medicare tax is determined in a different manner than the regular income tax. U.S. holders should consult their tax advisors as to the consequences of the 3.8% Medicare tax.
Specified Foreign Financial Assets. Certain U.S. holders that own “specified foreign financial assets” in excess
of an applicable threshold may be subject to reporting obligations with respect to such assets with their tax returns, especially if such assets are held outside the custody of a U.S. financial institution. Significant penalties can apply if a
U.S. holder is required to disclose its notes and fails to do so.
Backup Withholding and Information Reporting. The proceeds received from a taxable disposition of the notes will be subject to information reporting
unless you are an “exempt recipient” and may also be subject to backup withholding at the rate specified in the Code if you fail to provide certain identifying information (such as an accurate taxpayer number, if you are a U.S. holder) or meet
certain other conditions.
Amounts withheld under the backup withholding rules are not additional taxes and may be refunded or credited against your U.S. federal income tax liability, provided the required information is
furnished to the IRS.
Non-U.S. Holders. If you are a non-U.S. holder, subject to Section 871(m) of the Code and FATCA, discussed below, you should generally not be subject to
generally applicable information reporting and backup withholding requirements with respect to payments on your notes if you comply with certain certification and identification requirements as to your non-U.S. status, including providing us
(and/or the applicable withholding agent) a properly executed and fully completed applicable IRS Form W-8. Subject to Section 897 of the Code, and Section 871(m) of the Code, discussed herein, gain realized from the taxable disposition of a
note generally will not be subject to U.S. tax unless (i) such gain is effectively connected with a trade or business conducted by you in the U.S., (ii) you are a non-resident alien individual and are present in the U.S. for 183 days or more
during the taxable year of such taxable disposition and certain other conditions are satisfied or (iii) you have certain other present or former connections with the U.S.
Section 897. We will not attempt to ascertain whether any Underlying Company would be treated as a “United States real property holding corporation”
(“USRPHC”) within the meaning of Section 897 of the Code. We also have not attempted to determine whether the notes should be treated as “United States real property interests” (“USRPI”) as defined in Section 897 of the Code. If any Underlying
Company and/or the notes were so treated, certain adverse U.S. federal income tax consequences could possibly apply, including subjecting any gain realized by a non-U.S. holder in respect of a note upon a sale, exchange or other taxable
disposition of the note to U.S. federal income tax on a net basis, and the proceeds from such a taxable disposition to a withholding tax. Non-U.S. holders should consult their tax advisors regarding the potential treatment of an Underlying
Company for their notes as a USRPHC and/or the notes as USRPI.
Section 871(m). A 30% withholding tax (which may be reduced by an applicable income tax treaty) is imposed under Section 871(m) of the Code on certain
“dividend equivalents” paid or deemed paid to a non-U.S. holder with respect to a “specified equity-linked instrument” that references one or more dividend-paying U.S. equity securities or indices containing U.S. equity securities. The
withholding tax can apply even if the instrument does not provide for payments that reference dividends. Treasury regulations provide that the withholding tax applies to all dividend equivalents paid or deemed paid on specified equity-linked
instruments that have a delta of one (“delta-one specified equity-linked instruments”) issued after 2016 and to all dividend equivalents paid or deemed paid on all other specified equity-linked instruments issued after 2017. However, the IRS
has issued guidance that states that the Treasury and the IRS intend to amend the effective dates of the Treasury regulations to provide that withholding on dividend equivalents paid or deemed paid will not apply to specified equity-linked
instruments that are not delta-one specified equity-linked instruments and are issued before January 1, 2025.
Based on our determination that the notes are not “delta-one” with respect to the Market Measure or any Basket Stock, our special U.S. tax counsel is of the opinion that the notes should not be
delta-one specified equity-linked instruments and thus should not be subject to withholding on dividend equivalents. Our determination is not binding on the IRS, and the IRS may disagree with this determination. Furthermore, the application of
Section 871(m) of the Code will depend on our determinations made when the terms of the notes are set. If withholding is required, we will not make payments of any additional amounts.
Nevertheless, after the date the terms are set, it is possible that your notes could be deemed to be reissued for tax purposes upon the occurrence of certain events affecting the Market Measure,
any Basket Stocks or your notes, and following such occurrence your notes could be treated as delta-one specified equity-linked instruments that are subject to withholding on dividend equivalents. It is also possible that withholding tax or
other tax under Section 871(m) of the Code could apply to the notes under these rules if a non-U.S. holder enters, or has entered, into certain other transactions in respect of Market Measure, any Basket Stocks or the notes. A non-U.S. holder
that enters, or has entered, into other transactions in respect of the Market Measure, any Basket Stocks or the notes should consult its tax advisor regarding the application of Section 871(m) of the Code to its notes in the context of its
other transactions.
Because of the uncertainty regarding the application of the 30% withholding tax on dividend equivalents to the notes, you are urged to consult your tax
advisor regarding the potential application of Section 871(m) of the Code and the 30% withholding tax to an investment in the notes.
U.S. Federal Estate Tax Treatment of Non-U.S. Holders. A note may be subject to U.S. federal estate tax if an individual non-U.S. holder holds the note at
the time of his or her death. The gross estate of a non-U.S. holder domiciled outside the U.S. includes only property situated in the U.S. Individual non-U.S. holders should consult their tax advisors regarding the U.S. federal estate tax
consequences of holding the notes at death.
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to a Basket of Three Stocks, due May , 2027 |
FATCA. The Foreign Account Tax Compliance Act (“FATCA”) was enacted on March 18, 2010, and imposes a 30% U.S. withholding tax on “withholdable payments” (i.e., certain
U.S.-source payments, including interest (and original issue discount), dividends or other fixed or determinable annual or periodical gain, profits, and income, and on the gross proceeds from a disposition of property of a type which can
produce U.S.-source interest or dividends) and “passthru payments” (i.e., certain payments attributable to withholdable payments) made to certain foreign financial institutions (and certain of their affiliates) unless the payee foreign
financial institution agrees (or is required), among other things, to disclose the identity of any U.S. individual with an account at the institution (or the relevant affiliate) and to annually report certain information about such account.
FATCA also requires withholding agents making withholdable payments to certain foreign entities that do not disclose the name, address, and taxpayer identification number of any substantial U.S. owners (or do not certify that they do not have
any substantial U.S. owners) to withhold tax at a rate of 30%. Under certain circumstances, a holder may be eligible for refunds or credits of such taxes.
Pursuant to final and temporary Treasury regulations and other IRS guidance, the withholding and reporting requirements under FATCA will generally apply to certain “withholdable payments”, will
not apply to gross proceeds on a sale or disposition and will apply to certain foreign passthru payments only to the extent that such payments are made after the date that is two years after final regulations defining the term “foreign passthru
payment” are published. If withholding is required, we (or the applicable paying agent) will not be required to pay additional amounts with respect to the amounts so withheld. Foreign financial institutions and non-financial foreign entities
located in jurisdictions that have an intergovernmental agreement with the U.S. governing FATCA may be subject to different rules.
Investors should consult their own advisors about the application of FATCA, in particular if they may be classified as financial institutions (or if they hold their notes
through a foreign entity) under the FATCA rules.
Proposed Legislation. In 2007, legislation was introduced in Congress that, if it had been enacted, would have required holders of notes purchased after
the bill was enacted to accrue interest income over the term of the notes despite the fact that there will be no interest payments over the term of the notes.
Furthermore, in 2013 the House Ways and Means Committee released in draft form certain proposed legislation relating to financial instruments. If it had been enacted, the effect of this
legislation generally would have been to require instruments such as the notes to be marked to market on an annual basis with all gains and losses to be treated as ordinary, subject to certain exceptions.
It is impossible to predict what any such legislation or administrative or regulatory guidance might provide, and whether the effective date of any legislation or guidance will affect securities
that were issued before the date that such legislation or guidance is issued. You are urged to consult your tax advisor as to the possibility that any legislative or administrative action may adversely affect the tax treatment of your notes.
Both U.S. and non-U.S. holders should consult their tax advisors regarding the U.S. federal income tax consequences of an investment in the notes, as well as any tax
consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction (including that of TD and those of the Basket Stocks).
Where You Can Find More Information
We have filed a registration statement (including a product supplement and a prospectus) with the SEC for the offering to which this term sheet relates. Before you invest, you should read the
Note Prospectus, including this term sheet, and the other documents that we have filed with the SEC, for more complete information about us and this offering. You may get these documents without cost by visiting EDGAR on the SEC website at
www.sec.gov. Alternatively, we, any agent, or any dealer participating in this offering will arrange to send you these documents if you so request by calling MLPF&S or BofAS toll-free at 1-800-294-1322.
“Strategic Accelerated Redemption Securities®” are registered service marks of Bank of America Corporation, the parent company of MLPF&S and BofAS.