Autocallable Coupon Notes in Canada

Autocallable coupon notes (sometimes called phoenix notes) pay a coupon each period only if the underlying index is above a specified payment threshold. Unlike snowball autocallables, missed coupons do not accumulate - each period stands alone. The note can be called early if the index exceeds the auto-call level, returning your principal plus that period's coupon.

Return Profile

Best Case

If: Underlier rises above autocall level (110%)

Then: Principal + coupons earned to date

Base Case

If: Underlier declines but stays above barrier (-25%) at maturity; coupons paid when above threshold

Then: Principal + partial/full coupons (up to 42.0% total)

Worst Case

If: Underlier falls below barrier (-25%) at maturity

Then: Principal × (1 + underlier return)

For illustrative purposes only. Actual returns depend on specific note terms.

How It Works

On each observation date, the index is checked against the coupon payment threshold (a level below which no coupon is paid).

If the index is above the threshold, you receive the coupon for that period. If below, no payment is made and it's forfeited.

If the index exceeds the auto-call level on any observation date, the note redeems early with your principal plus the current coupon.

Unlike snowball autocallables, missed coupons are gone - they don't carry forward to future periods.

At maturity, if the index is above the downside barrier, you get your principal back. If below, you suffer a loss proportional to the index decline.

Investor Suitability

Income-focused investors willing to accept some equity risk for higher yield
Range-bound to moderately bearish market outlook
Comfortable with variable income (some periods may pay nothing)
Short- to medium-term holding period
RRSP, RRIF, RESP, and TFSA eligible

Investment Considerations

Not suitable if you need guaranteed steady income or a fixed investment term
Barrier protection only applies if you hold to maturity
Missed coupons are permanently forfeited - no accumulation
Payments depend on the issuing bank's creditworthiness
Selling before maturity on the secondary market may result in a loss
Early trading fees may apply
Taxed as interest income outside registered accounts
Not covered by CDIC deposit insurance

Currently Available (10+)

TD NOW Equity-Linked Autocallable Coupon Notes

3.0y 19.56% -30%

Solactive United States Big Banks Index 3.25% AR Auto Callable Contingent Income (USD)

5y 9% -30%

Solactive United States Big Banks Hedged to CAD Index 3.25% AR Auto Callable Contingent Income, Class F

5y 9.24% -40%

Solactive United States Big Banks Hedged to CAD Index 3.25% AR Auto Callable Contingent Income

5y 9.12% -25%

Solactive Equal Weight Canada Banks 5% AR Index Auto Callable Contingent Income (USD)

7y 7.02% -30%

Solactive Equal Weight Canada Banks 5% AR Index Auto Callable Contingent Income, Class F

7y 7.50% -30%

BNS U.S. Large Cap (AR) Index Callable Contingent US$9.24 Coupon Notes

7y 9.24% -25%

BNS U.S. Large Cap (AR) Index Callable Contingent US$7.32 Coupon Notes

7y 7.32% -25%

BNS Healthcare (AR) Index Callable Contingent $9.48 Coupon Notes

7y 9.48% -25%

BNS U.S. Large Cap REITs (AR) Index Callable Contingent $9.00 Coupon Notes

7y 9% -25%

View all 154 notes →

Other Structure Types

Autocallable Notes Growth Notes Buffer Growth Notes Barrier Fixed Coupon Notes Barrier Coupon Notes Principal Protected Notes

For educational purposes only. Not investment advice. Information may contain errors or omissions. Consult a qualified financial advisor before making investment decisions.