NBC Global Blue Chip III Deposit Notes

Transcription

1 NBC Deposit Notes NBC Global Blue Chip III Deposit Notes Series 13 SALES PERIOD: October 9, 2014 to October 24, 2014 at 4 p.m. ISSUANCE DATE: On or about October 31, 2014 BANK EARLY REDEMPTION: On or about October 31, 2018 MATURITY DATE: On or about October 31, 2022 INVESTMENT HIGHLIGHTS 8-year term Principal Protection Principal fully protected at maturity by National Bank of Canada. Variable Return The return at maturity, if any, is linked to the price performance, converted into Canadian dollars, of a Reference Portfolio composed of the common shares of 20 international companies. The return at maturity, if any, is calculated based on the average of 13 monthly portfolio levels calculated on each of the Issuance Date and the 12 subsequent monthly anniversary dates following the Issuance Date. May be called for redemption by National Bank of Canada 4 years after the Issuance Date at$ per Deposit Note for an annual compounded rate of return of approximately 8.00% on the Bank Early Redemption Day. The Return is a price return, and will not take into account dividends (approximately 3.55% as of September 30, 2014). Liquidity A daily secondary market is maintained subject to availability and to early trading charges within the first 720 days including and following the Issuance Date, up to $6.00 per Deposit Note. A Holder who sells Deposit Notes prior to maturity may receive less than the Initial Deposit Amount per Deposit Note. Eligibility Eligible for all types of accounts (RRSP, RRIF, DPSP, RESP, RDSP and TFSA). $1,000 minimum subscription (10 Deposit Notes). The Deposit Notes are not conventional fixed income investments. There are risks associated with this investment. Investors should read the Information Statement dated October 9, 2014 for more detailed risk disclosure and complete information on the Deposit Notes. Please refer to our website for the list of the different terms and conditions, if any, of previous series issued by the Bank. Where an investor purchases Deposit Notes, by phone or in person, the advisor must at the time verbally highlight certain information in respect of the Deposit Notes contained under the heading Oral Disclosure for Sales in Person or by Telephone. FUNDSERV CODE: NBC1469 l Should you have any questions, do not hesitate to contact us.

2 2 Target Investors Investors looking to diversify their portfolio across different sectors of the global equity markets through companies with a large market capitalization and located in developed countries within North America, Europe and the Asian-Pacific region; Investors who believe the Canadian dollar will not appreciate against the other foreign currencies into which the foreign securities are denominated during the term of the Deposit Notes or who are ready to assume the risk of currency fluctuations which may reduce any Variable Return, if any; Investors who are uncertain about short term equity market direction; Investors seeking protection of their capital at maturity; Investors who, in order to benefit from the Deposit Notes structure and capital protection, are prepared to waive the aggregate dividend yield provided by each, representing approximately 28.40% over the term on the assumption that the dividend yield remains constant (which represents an annual return of approximately 3.55%) and that the dividends are not reinvested; Investors seeking the potential for higher returns in a low interest rate environment; Investors with a long-term investment horizon who are prepared to hold the Deposit Notes to maturity; Investors who do not need or do not expect certainty of return and can accept seeing the value of their investment in the Deposit Notes diminish over time due to inflation; and Investors who are prepared to assume the risks as described in the Risk Factors section of the Information Statement. Product Description The Deposit Notes provide a return at the 8-year term maturity that is linked to the price performance, converted into Canadian dollars, of a notional reference portfolio composed of the common shares of 20 international companies. The Deposit Notes are callable for redemption 4 years after the Issuance Date at$ per Deposit Note representing an annual compounded rate of return of approximately 8.00%. If the Bank does not exercise its right to call the Deposit Notes, the Variable Return at maturity is unlimited. The Return is a price return, and will not take into account dividends paid in respect of each of the s (which represented an annual return of approximately 3.55% as of September 30, 2014). Foreign currency fluctuations will impact the Reference Portfolio Return, as the Prices used to calculate the Reference Share Return will be converted into Canadian dollars at the FX Rate. Reference Portfolio Exposure to 20 International Companies The Bank of Nova Scotia Novartis AG The Toronto-Dominion Bank Total S.A. TransCanada Corporation Orange S.A. General Mills, Inc. GDF Suez Johnson & Johnson Royal Dutch Shell PLC McDonald s Corporation BHP Billiton Limited 3M Company HSBC Holdings PLC Altria Group, Inc. SAB Miller PLC Pfizer Inc. Sony Corporation The Southern Company Nintendo Co., Ltd. Geographic and Sector Diversification United States 35% Canada 15% France 15% Great Britain 10% Japan 10% Australia 5% Netherlands 5% Switzerland 5% Consumer Staples 15% Energy 15% Financial Services 15% Health Care 15% Consumer Discretionary 10% Utilities 10% Industrials 5% Information Technology 5% Materials 5% Telecommunication Services 5%

3 3 Scenario Analysis The following are examples meant to illustrate the application of the aforementioned calculations and formula. These examples are included for illustration purposes only. The amounts used are hypothetical and are not forecasts or projections of the performance of the Reference Portfolio or the Deposit Notes. No assurance can be given that the results shown in these examples will be achieved. Hypothetical Example of a Positive Variable Return The following tables are based on the assumption that most of the price returns for the s will increase during the 8-year term and the FX Rate fluctuation will positively impact the Returns. Price Issuance Date FX Rate (A) Price FX Rate Final Valuation Date (B) Return (B - A) / A Weighted Return (Return x 5%) Common shares of The Bank of Nova Scotia CAD$ CAD$ % 0.80% Common shares of The Toronto-Dominion Bank CAD$ CAD$ % 6.55% Common shares of TransCanada Corporation CAD$ CAD$ % 8.35% Common shares of General Mills, Inc. US$ US$ % 5.90% Common shares of Johnson & Johnson US$ US$ % 2.50% Common shares of McDonald s Corporation US$ US$ % 3.55% Common shares of 3M Company US$ US$ % 7.30% Common shares of Altria Group, Inc. US$ US$ % 5.90% Common shares of Pfizer Inc. US$ US$ % 7.55% Common shares of The Southern Company US$ US$ % 4.95% Common shares of Novartis AG CHF CHF % 7.50% Common shares of Total SA % 4.75% Common shares of Orange SA % -2.60% Common shares of GDF Suez % 3.90% Common shares of BHP Billiton Ltd % 1.95% Common shares of HSBC Holdings PLC AU$ AU$ 1, , % 6.55% Common shares of SAB Miller PLC 3, , , , % 4.70% Common shares of Royal Dutch Shell PLC % -0.75% Common shares of Sony Corporation 1, , % 4.75% Common shares of Nintendo Co., Ltd. 11, , % 5.35% Total Return 89.45% Reference Portfolio Level 1, Average Valuation Dates Price (CAD$) on the Issuance Date* Weighted Return (equal to the Return multiplied by 5%) Common shares of The Bank of Nova Scotia % -1.83% -0.61% -2.11% -1.28% -0.18% -0.66% -1.48% -0.71% 0.00% 0.06% 0.14% Common shares of The Toronto-Dominion Bank % 0.41% 0.48% 0.39% 0.22% 0.32% 0.24% 0.41% 0.38% 0.49% 0.55% 0.89% Common shares of TransCanada Corporation % -0.53% -0.46% -0.56% -0.73% -0.63% -0.71% -0.53% -0.56% -0.45% -0.39% -0.31% Common shares of General Mills, Inc % 0.03% 0.10% 0.00% -2.17% -0.07% -0.65% 0.03% 0.00% 0.11% 0.17% 0.25% Common shares of Johnson & Johnson % -0.35% -0.28% -0.38% -0.55% -0.45% -0.53% -0.35% -0.38% -0.27% -0.21% -0.13% Common shares of McDonald s Corporation % -0.30% -0.23% -2.33% -0.49% -0.39% -1.48% -0.30% -0.33% -0.22% -1.16% -0.08% Common shares of 3M Company % -1.58% -1.51% -1.61% -1.78% -1.68% -1.76% -1.58% -0.61% -0.50% -0.44% -0.36% Common shares of Altria Group, Inc % -0.81% -0.74% -0.83% -1.00% -0.91% -1.00% -0.94% -1.97% -1.86% -1.80% -1.72% Common shares of Pfizer Inc % -1.29% -0.22% -0.32% -0.49% -0.39% -0.47% -0.29% -0.32% -0.21% -0.15% -0.07% Common shares of The Southern Company % 0.10% 0.17% 0.07% -0.10% 0.00% -0.08% 0.10% 0.07% 0.18% 0.24% 0.32% Common shares of Novartis AG % -0.36% -0.29% -0.39% -0.56% -0.46% -0.54% -0.36% -0.39% -0.28% -0.22% -0.14% Common shares of Total SA % -0.13% -0.06% -0.16% -0.33% -0.23% -0.31% -0.13% -0.16% -0.05% 0.01% 0.09% Common shares of Orange SA % 0.41% 0.48% 0.39% 0.22% 0.32% 0.24% 0.41% 0.38% 0.49% 0.55% 0.69% Common shares of GDF Suez % 0.03% 0.10% 0.00% -0.17% -0.07% -0.15% 0.03% 0.00% 0.11% 0.17% 0.25% Common shares of BHP Billiton Ltd % 0.41% 0.48% 0.39% 0.22% 0.32% 0.24% 0.41% 0.38% 0.49% 0.55% 0.95% Common shares of HSBC Holdings PLC % -1.30% -0.23% -0.33% -0.50% -0.40% -1.48% -0.30% -0.33% -0.22% -0.16% -0.08% Common shares of SAB Miller PLC 5, % -0.18% -0.11% -0.21% -0.38% -0.28% -0.36% -0.18% -0.21% -0.10% -0.04% 2.04% Common shares of Royal Dutch Shell PLC % -2.68% -1.61% -0.71% -0.88% -0.77% -0.86% -0.68% -0.71% -0.60% -0.54% -0.46% Common shares of Sony Corporation % -0.13% -0.06% -0.16% -0.33% -0.22% -0.31% -0.13% -0.16% -0.05% 0.01% 0.09% Common shares of Nintendo Co., Ltd % -0.53% -0.45% -0.55% -0.72% -0.62% -0.70% -0.52% -0.55% -0.44% -0.38% -0.30% Total Reference Share Return -2.65% % -5.05% -9.41% % -6.79% % -6.38% -6.18% -3.38% -3.18% 2.06% Reference Portfolio Level 1, , Reference Portfolio Average Level** Reference Portfolio Level on the Final Valuation Date 1, Reference Portfolio Return: (1, ) / % Variable Return: MAX [$0, $100 x %] = $ Maturity Redemption Amount: $100 + $ = $ Annualized Compounded Return over the 8-year term 9.12% In this example, the Total Return on the Final Valuation Date is 89.45% resulting in a Reference Portfolio Level on the Final Valuation Date of 1, If the Bank does not exercise its right to call the Deposit Notes prior to maturity, as the Reference Portfolio Average Level is the Reference Portfolio Return will be %, the Variable Return will be $ and the Maturity Redemption Amount payable on the Maturity Payment Date will be $ (approximately 9.12% compounded annually over 8 years). Please see the Information Statement dated October 9, 2014 for complete details with respect to the examples.

4 4 Hypothetical Example of Nil Variable Return The following tables are based on the assumption that most of the price returns for the s will decrease during the 8-year term and the FX Rate fluctuation will negatively impact the Returns. Price Issuance Date FX Rate (A) Price FX Rate Final Valuation Date Price ($CAD)* (B) Return (B - A) / A Weighted Return (Return x 5%) Common shares of The Bank of Nova Scotia CAD$ CAD$ % -1.60% Common shares of The Toronto-Dominion Bank CAD$ CAD$ % 3.11% Common shares of TransCanada Corporation CAD$ CAD$ % -1.91% Common shares of General Mills, Inc. US$ US$ % -0.86% Common shares of Johnson & Johnson US$ US$ % -1.09% Common shares of McDonald s Corporation US$ US$ % -1.53% Common shares of 3M Company US$ US$ % -1.14% Common shares of Altria Group, Inc. US$ US$ % -2.54% Common shares of Pfizer Inc. US$ US$ % -0.85% Common shares of The Southern Company US$ US$ % -2.46% Common shares of Novartis AG CHF CHF % -0.92% Common shares of Total SA % 1.31% Common shares of Orange SA % 0.91% Common shares of GDF Suez % -1.53% Common shares of BHP Billiton Ltd % -1.05% Common shares of HSBC Holdings PLC AU$ AU$ % 3.14% Common shares of SAB Miller PLC 3, , , , % -0.74% Common shares of Royal Dutch Shell PLC % -2.24% Common shares of Sony Corporation 1, , % -0.69% Common shares of Nintendo Co., Ltd. 11, , % -1.08% Total Return % Reference Portfolio Level Average Valuation Dates Price (CAD$) on the Issuance Date* Weighted Return (equal to the Return multiplied by 5%) Common shares of The Bank of Nova Scotia % -0.08% -0.01% -0.11% -0.28% -0.18% -0.26% -0.08% -0.11% 0.00% 0.06% 0.14% Common shares of The Toronto-Dominion Bank % 0.41% 0.48% 0.39% 0.22% 0.32% 0.24% 0.41% 0.38% 0.49% 0.55% 0.89% Common shares of TransCanada Corporation % -0.35% -0.28% -0.38% -0.55% -0.45% -0.53% -0.35% -0.38% -0.27% -0.21% -0.13% Common shares of General Mills, Inc % -0.30% -0.23% -0.33% -0.49% -0.39% -0.48% -0.30% -0.33% -0.22% -0.16% -0.08% Common shares of Johnson & Johnson % -0.53% -0.46% -0.56% -0.73% -0.63% -0.71% -0.53% -0.56% -0.45% -0.39% -0.31% Common shares of McDonald s Corporation % 0.03% 0.10% 0.00% -0.17% -0.07% -0.15% 0.03% 0.00% 0.11% 0.17% 0.25% Common shares of 3M Company % -0.58% -0.51% -0.61% -0.78% -0.68% -0.76% -0.58% -0.61% -0.50% -0.44% -0.36% Common shares of Altria Group, Inc % -0.81% -0.74% -0.83% -1.00% -0.91% -1.00% -0.94% -0.97% -0.86% -0.80% -0.72% Common shares of Pfizer Inc % -0.29% -0.22% -0.32% -0.49% -0.39% -0.47% -0.29% -0.32% -0.21% -0.15% -0.07% Common shares of The Southern Company % 0.10% 0.17% 0.07% -0.10% 0.00% -0.08% 0.10% 0.07% 0.18% 0.24% 0.32% Common shares of Novartis AG % -0.36% -0.29% -0.39% -0.56% -0.46% -0.54% -0.36% -0.39% -0.28% -0.22% -0.14% Common shares of Total SA % -0.13% -0.06% -0.16% -0.33% -0.23% -0.31% -0.13% -0.16% -0.05% 0.01% 0.09% Common shares of Orange SA % 0.41% 0.48% 0.39% 0.22% 0.32% 0.24% 0.41% 0.38% 0.49% 0.55% 0.69% Common shares of GDF Suez % 0.03% 0.10% 0.00% -0.17% -0.07% -0.15% 0.03% 0.00% 0.11% 0.17% 0.25% Common shares of BHP Billiton Ltd % 0.41% 0.48% 0.39% 0.22% 0.32% 0.24% 0.41% 0.38% 0.49% 0.55% 0.95% Common shares of HSBC Holdings PLC % -0.30% -0.23% -0.33% -0.50% -0.40% -0.48% -0.30% -0.33% -0.22% -0.16% -0.08% Common shares of SAB Miller PLC 5, % -0.18% -0.11% -0.21% -0.38% -0.28% -0.36% -0.18% -0.21% -0.10% -0.04% 0.04% Common shares of Royal Dutch Shell PLC % -0.68% -0.61% -0.71% -0.88% -0.77% -0.86% -0.68% -0.71% -0.60% -0.54% -0.46% Common shares of Sony Corporation % -0.13% -0.06% -0.16% -0.33% -0.22% -0.31% -0.13% -0.16% -0.05% 0.01% 0.09% Common shares of Nintendo Co., Ltd % -0.53% -0.45% -0.55% -0.72% -0.62% -0.70% -0.52% -0.55% -0.44% -0.38% -0.30% Total Reference Share Return -1.65% -3.86% -2.45% -4.41% -7.80% -5.79% -7.43% -3.98% -4.58% -2.38% -1.18% 1.06% Reference Portfolio Level 1, , Reference Portfolio Average Level** Reference Portfolio Level on the Final Valuation Date Reference Portfolio Return: ( ) / % Variable Return: MAX [$0, $100 x %] = $0.00 Maturity Redemption Amount: $100 + $0 = $ Annualized Compounded Return over the 8-year term 0.00% * Converted into Canadian dollars ** The Reference Portfolio Average Level will be equal to the average of the Reference Portfolio Levels calculated on each Average Valuation Dates In this example, the Total Return on the Final Valuation Date is % resulting in a Reference Portfolio Level on the Final Valuation Date of If the Bank does not exercise its right to call the Deposit Notes prior to maturity, as the Reference Portfolio Average Level is , the Reference Portfolio Return will be %, the Variable Return will be $0.00 and the Maturity Redemption Amount payable on the Maturity Payment Date will be $ Please see the Information Statement dated October 9, 2014 for complete details with respect to the examples.

5 5 Risk Factors Prospective investors should carefully consider all of the information set forth in the Information Statement dated October 9, 2014 and, in particular, should evaluate the specific risk factors set forth under Risk Factors for a discussion of certain risks involved in evaluating an investment in the Deposit Notes. Prospective investors that are not prepared to accept the following risks should not invest in the NBC Global Blue Chip III Deposit Notes. Such risk factors include, without limitation, the following: Risk factors. Such risk factors include, without limitation, the following: Suitability for investment; Deposit Notes may not be a suitable investment for some investors; Uncertain return until maturity; No assurance that the Deposit Notes will show any return; Deposit Notes are linked only to the Canadian dollar price performance of the Reference Portfolio; Currency risks; Return will not reflect the full appreciation of the s when including dividends; Holders have no ownership interest in the s; No guarantee of a secondary market and possible illiquidity of any developing secondary market; Return on the Deposit Notes will be limited upon a Bank Early Redemption; Deposit Notes could be redeemed prior to maturity under a Reimbursement Under Special Circumstances; Postponement of the Final Valuation Date or any Average Valuation Date may affect the payment at maturity; Payments at maturity of the Initial Deposit Amount and of the Variable Return (if any) are unsubordinated and unsecured obligations of the Bank and are dependent upon creditworthiness of the Bank; Deferred payment; Deposit Notes will not be insured under the Canada Deposit Insurance Corporation Act; Deposit Notes may not be eligible for protection under the Canadian Investor Protection Fund or any other deposit insurance regime; Conflict of interest may affect the Calculation Agent, the Agent and the Market Maker; Hedging transactions may affect the s; Deposit Notes are not qualified by prospectus; and Taxation. Canada Revenue Agency is currently reviewing its administrative policies and assessing practices with regard to instruments such as the Deposit Notes. Risks relating to the s, including: Trading prices; Exposure to equities; Potential replacement of the s; Exposure to foreign investments; and Neither the Bank nor the Agent make any representation or warranty as to the accuracy or completeness of the information regarding the s. Investors should read the Information Statement for complete details of risk factors. Suitability Considerations and Guidelines An investment in the is not suitable for all investors and even if suitable, investors should consider what part the Global Blue Chip III Deposit Notes, Series 13 should serve in an overall investment plan. The Information Statement includes a summary of various suitability considerations and guidelines. You are encouraged to read the Information Statement carefully. The statements contained herein are based upon information which we believe to be reliable but we cannot represent that they are complete or accurate. The complete information related to this issue of the Deposit Notes will be contained in an Information Statement which will be sent to investors prior to the closing date. Capitalized terms used herein and not otherwise defined have the meaning ascribed thereto in the Information Statement of the Deposit Notes. This memorandum is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy the Deposit Notes referred to herein. The NBC Global Blue Chip III Deposit Notes are principal protected at maturity. Variation in the Reference Portfolio Return will have a direct impact on the return payable. It is possible that no return will be paid. Deposit Notes are not suitable for all types of investors. An investment in the Deposit Notes is subject to a number of risk factors. Potential purchasers should consult the Information Statement before investing in the Deposit Notes. The Deposit Notes will not be insured under the Canada Deposit Insurance Corporation Act. Trademark of National Bank of Canada