Debt Information

Issue Date	Currency / Amount Issued (millions)	Maturity Date	Interest Rate	TLAC Eligibility	*Terms	CUSIP / ISIN
4/17/2019	USD 0.326	4/19/2027	Y1-5: 3.00% Y5-Y8: 4.00%	Yes		89114QM88 / US89114QM889
7/22/2019	USD 175	7/22/2022	Y1: 2.70% Y2-Y3: 3M Libor + 0.35%	Yes		89114Q3J5 / US89114Q3J55
7/16/2019	USD 10	7/16/2031	Y1-Y9: 3.10% Y9-Y12: 3.50%	Yes		89114Q3K2 / US89114Q3K29
7/19/2019	USD 8	7/19/2030	3%	Yes		89114Q3M8 / US89114Q3M84
7/24/2019	USD 5	7/24/2030	3.00%	Yes		89114Q3U0 / US89114Q3U01
8/14/2019	USD 13	8/14/2024	Y1-Y4: 2.45% Y5: 2.75%	Yes		89114Q5A2 / US89114Q5A29
10/18/2019	USD 50	10/18/2024	Y1-Y2: 2.25% Y2-Y4: 2.50% Y5: 3.25%	Yes		89114R2U9 / US89114R2U91
11/8/2019	USD 33	11/8/2027	2.375%	Yes		89114R5B8 / US89114R5B83
2/10/2020	USD 200	2/10/2023	Y1: 1.85% Y2: 3M Libor + 0.27%	Yes		89114RDK9 / US89114RDK95
4/8/2020	USD 50	4/8/2022	3m: 1.35% 3m-Y2: SOFR +2.40%	No		89117BAS7 / US89117BAS79
5/5/2020	USD 20	5/5/2022	Y1: 1.35% Y2: SOFR + 1.15%	No		89114RKA3 / US89114RKA31
5/22/2020	USD 60	5/22/2022	Y2: SOFR + 0.7%	No		89114RLC8 / US89114RLC87
11/20/2020	USD 25	5/20/2024	0.5%	Yes		89114RXN1 / US89114RXN15
11/20/2020	USD 25	11/20/2025	0.8%	Yes		89114RXP6 / US89114RXP62
1/22/2021	USD 1	1/24/2028	1%	Yes		89114T5T5 / US89114T5T55
1/29/2021	USD 1	1/29/2026	Y1-Y2: 0.65% Y2-Y4: 0.75% Y5: 1.00%	Yes		89114T6J6 / US89114T6J64
2/26/2021	USD 2	2/26/2027	1%	Yes		89114TAL6 / US89114TAL61
3/2/2021	USD 50	3/2/2024	0.5%	Yes		89114TCN0 / US89114TCN00
3/11/2021	USD 13.65	9/11/2024	0.7%	Yes		89114TDD1 / US89114TDD19
3/17/2021	USD 3.26	12/17/2025	1%	Yes		89114TCR1 / US89114TCR14
3/31/2021	USD 2	9/30/2030	2%	Yes		89114TDQ2 / US89114TDQ22
3/31/2021	USD 7.673	6/30/2025	1%	Yes		89114TDX7 / US89114TDX72
3/19/2021	USD 10	3/19/2025	1%	Yes		89114TE40 / US89114TE401
3/22/2021	USD 15	3/22/2036	2.64%	Yes		89114TE57 / US89114TE575
4/16/2021	USD 2	9/16/2025	1%	Yes		89114TEV0 / US89114TEV08
4/16/2021	USD 1	4/16/2030	2%	Yes		89114TEW8 / US89114TEW80
4/1/2021	USD 8.1	4/1/2025	1%	Yes		89114TF49 / US89114TF499
4/20/2021	USD 7.185	4/20/2026	1.3%	Yes		89114TFS6 / US89114TFS69
4/30/2021	USD 4.4	4/30/2026	1.3%	Yes		89114TG71 / US89114TG711
5/14/2021	USD 1	8/14/2025	1%	Yes		89114TH54 / US89114TH545
5/14/2021	USD 1	5/14/2026	1.25%	Yes		89114TH62 / US89114TH628
5/14/2021	USD 4	5/14/2027	1.4%	Yes		89114THK1 / US89114THK16
5/28/2021	USD 3.81	11/28/2025	1%	Yes		89114TJD5 / US89114TJD54
5/28/2021	USD 3	11/30/2024	0.7%	Yes		89114TJW3 / US89114TJW36

† As of May 31, 2021

* Related offering documents for U.S. Medium Term Notes can be viewed at Program & Offering Documents.

Bail-inable structured note transactions that are not otherwise exempted from the bail-in regime will be posted periodically. The above table relates to such bail-inable structured note transactions issued in the U.S.; structured note transactions issued in Canada may be reviewed at TD Structured Notes.

U.S. Medium Term and Structured Notes Program

• Prospectus
  • dated 4-Mar-2022
  • dated 18-Jun-2019


• Prospectus Supplement
  • dated 4-Mar-2022
  • dated 18-Jun-2019

Euro Medium Term Notes Program

• Prospectus
  • dated 30-Jun-2022
  • dated 30-Jun-2021
  • dated 30-Jun-2020
  • dated 9-Jul-2019
  • dated 30-Oct-2018


• Prospectus Supplement
  • dated 26-Aug-2022
  • dated 27-May-2022
  • dated 4-Mar-2022
  • dated 7-Dec-2021
  • dated 27-Aug-2021
  • dated 1-Jun-2021
  • dated 1-Mar-2021
  • dated 7-Dec-2020
  • dated 28-Aug-2020

Australian Dollar Medium Term Notes Program

• Information Memorandum
  • dated 28-Jun- 2019

Under Canadian bank resolution powers, the Canada Deposit Insurance Corporation (“CDIC”) may, in circumstances where the Bank has ceased, or is about to cease, to be viable, assume temporary control or ownership of the Bank and may be granted broad powers by one or more orders of the Governor in Council (Canada), each of which we refer to as an “Order,” including the power to sell or dispose of all or a part of the assets of the Bank, and the power to carry out or cause the Bank to carry out a transaction or a series of transactions the purpose of which is to restructure the business of the Bank. As part of the Canadian bank resolution powers, certain provisions of, and regulations under the Bank Act (Canada) (the “Bank Act”), the Canada Deposit Insurance Corporation Act (the “CDIC Act”) and certain other Canadian federal statutes pertaining to banks, which we refer to collectively as the “bail-in regime,” provide for a bank recapitalization regime for banks designated by the Superintendent of Financial Institutions (Canada) (the “Superintendent”) as domestic systemically important banks, which include the Bank. We refer to those domestic systemically important banks as “D-SIBs”.

The expressed objectives of the bail-in regime include reducing government and taxpayer exposure in the unlikely event of a failure of a D-SIB, reducing the likelihood of such a failure by increasing market discipline and reinforcing that bank shareholders and creditors are responsible for the D-SIBs’ risks and not taxpayers, and preserving financial stability by empowering the CDIC to quickly restore a failed D-SIB to viability and allow it to remain open and operating, even where the D-SIB has experienced severe losses.

Under the CDIC Act, in circumstances where the Superintendent is of the opinion that the Bank has ceased, or is about to cease, to be viable and viability cannot be restored or preserved by exercise of the Superintendent’s powers under the Bank Act, the Superintendent, after providing the Bank with a reasonable opportunity to make representations, is required to provide a report to CDIC. Following receipt of the Superintendent’s report, CDIC may request the Minister of Finance for Canada (the “Minister of Finance”) to recommend that the Governor in Council (Canada) make an Order and, if the Minister of Finance is of the opinion that it is in the public interest to do so, the Minister of Finance may recommend that the Governor in Council (Canada) make, and on that recommendation, the Governor in Council (Canada) may make, one or more of the following Orders:

• vesting in CDIC, the shares and subordinated debt of the Bank specified in the Order, which we refer to as a “vesting order”;
• appointing CDIC as receiver in respect of the Bank, which we refer to as a “receivership order”;
• if a receivership order has been made, directing the Minister of Finance to incorporate a federal institution designated in the Order as a bridge institution wholly-owned by CDIC and specifying the date and time as of which the Bank’s deposit liabilities are assumed, which we refer to as a “bridge bank order”; or
• if a vesting order or receivership order has been made, directing CDIC to carry out a conversion, by converting or causing the Bank to convert, in whole or in part – by means of a transaction or series of transactions and in one or more steps – the shares and liabilities of the Bank that are subject to the bail-in regime into common shares of the Bank or any of its affiliates, which we refer to as a “conversion order”.

Following a vesting order or receivership order, CDIC will assume temporary control or ownership of the Bank and will be granted broad powers under that Order, including the power to sell or dispose of all or a part of the assets of the Bank, and the power to carry out or cause the Bank to carry out a transaction or a series of transactions the purpose of which is to restructure the business of the Bank.

Under a bridge bank order, CDIC has the power to transfer the Bank’s insured deposit liabilities and certain assets and other liabilities of the Bank to a bridge institution. Upon the exercise of that power, any assets and liabilities of the Bank that are not transferred to the bridge institution would remain with the Bank, which would then be wound up. In such a scenario, any liabilities of the Bank, including any outstanding notes (whether or not such notes are bail-inable notes), that are not assumed by the bridge institution could receive only partial or no repayment in the ensuing wind-up of the Bank.

Upon the making of a conversion order, prescribed shares and liabilities under the bail-in regime that are subject to that conversion order will, to the extent converted, be converted into common shares of the Bank or any of its affiliates, as determined by CDIC which we will refer to as a “bail-in conversion”.

Subject to certain exceptions discussed below, senior debt issued on or after September 23, 2018, with an initial or amended term to maturity (including explicit or embedded options) greater than 400 days, that is unsecured or partially secured and that has been assigned a CUSIP or ISIN or similar identification number are subject to a bail-in conversion. We refer to notes and other senior debt instruments that are subject to bail-in conversion as “bail-inable notes.” Shares, other than common shares, and subordinated debt of the Bank are also subject to a bail-in conversion, unless they are non-viability contingent capital.

Shares and liabilities which would otherwise be bail-inable but were issued before September 23, 2018 are not subject to a bail-in conversion unless, in the case of any such liability, including any notes, the terms of such liability are amended to increase their principal amount or to extend their term to maturity on or after September 23, 2018, and that liability, as amended, meets the requirements to be subject to a bail-in conversion. Covered bonds, certain derivatives and certain structured notes (as such term is used under the bail-in regime) are expressly excluded from a bail-in conversion. To the extent that any notes constitute structured notes (as such term is used under the bail-in regime) they will not be bail-inable notes. As a result, claims of some creditors whose claims would otherwise rank equally with those of the holders holding bail-inable notes would be excluded from a bail-in conversion and thus the holders and beneficial owners of bail-inable notes will have to absorb losses ahead of these other creditors as a result of the bail-in conversion. The terms and conditions of the bail-in conversion will be determined by CDIC in accordance with and subject to certain requirements discussed below.

Bail-in Conversion

Under the bail-in regime there is no fixed and pre-determined contractual conversion ratio for the conversion of the bail-inable notes, or other shares or liabilities of the Bank that are subject to a bail-in conversion, into common shares of the Bank or any of its affiliates nor are there specific requirements regarding whether liabilities subject to a bail-in conversion are converted into common shares of the Bank or any of its affiliates. CDIC determines the timing of the bail-in conversion, the portion of bail-inable shares and liabilities to be converted and the terms and conditions of the conversion, subject to parameters set out in the bail-in regime. Those parameters include that:

• in carrying out a bail-in conversion, CDIC must take into consideration the requirement in the Bank Act for banks to maintain adequate capital;
• CDIC must use its best efforts to ensure that shares and liabilities subject to a bail-in conversion are only converted after all subordinate ranking shares and liabilities that are subject to a bail-in conversion and any subordinate non-viability contingent capital instruments have been previously converted or are converted at the same time;
• CDIC must use its best efforts to ensure that the converted part of the liquidation entitlement of a share subject to a bail-in conversion, or the converted part of the principal amount and accrued and unpaid interest of a liability subject to a bail-in conversion, is converted on a pro rata basis for all shares or liabilities subject to a bail-in conversion of equal rank that are converted during the same restructuring period;
• holders of shares and liabilities that are subject to a bail-in conversion must receive a greater number of common shares per dollar of the converted part of the liquidation entitlement of their shares, or the converted part of the principal amount and accrued and unpaid interest of their liabilities, than holders of any subordinate shares or liabilities subject to a bail-in conversion that are converted during the same restructuring period or of any subordinate non-viability contingent capital that is converted during the same restructuring period;
• holders of shares or liabilities subject to a bail-in conversion of equal rank that are converted during the same restructuring period must receive the same number of common shares per dollar of the converted part of the liquidation entitlement of their shares or the converted part of the principal amount and accrued and unpaid interest of their liabilities; and
• holders of shares or liabilities subject to a bail-in conversion must receive, if any non-viability contingent capital of equal rank to the shares or liabilities is converted during the same restructuring period, a number of common shares per dollar of the converted part of the liquidation entitlement of their shares, or the converted part of the principal amount and accrued and unpaid interest of their liabilities, that is equal to the largest number of common shares received by any holder of the non-viability contingent capital per dollar of that capital.

Compensation Regime

The CDIC Act provides for a compensation process for holders of bail-inable notes who immediately prior to the making of an Order, directly or through an intermediary, own bail-inable notes that are converted in a bail-in conversion. While this process applies to successors of those holders it does not apply to assignees or transferees of the holder following the making of the Order and does not apply if the amounts owing under the relevant bail-inable notes are paid in full.

Under the compensation process, the compensation to which such holders are entitled is the difference, to the extent it is positive, between the estimated liquidation value and the estimated resolution value of the relevant bail-inable notes. The liquidation value is the estimated value the bail-inable noteholders would have received if an order under the Winding-up and Restructuring Act (Canada) had been made in respect of the Bank, as if no Order had been made and without taking into consideration any assistance, financial or otherwise, that is or may be provided to the Bank, directly or indirectly, by CDIC, the Bank of Canada, the Government of Canada or a province of Canada, after any order to wind up the Bank has been made.

The resolution value in respect of relevant bail-inable notes is the aggregate estimated value of the following: (a) the relevant bail-inable notes, if they are not held by CDIC and they are not converted, after the making of an Order, into common shares under a bail-in conversion; (b) common shares that are the result of a bail-in conversion after the making of an Order; (c) any dividend or interest payments made, after the making of the Order, with respect to the relevant bail-inable notes to any person other than CDIC; and (d) any other cash, securities or other rights or interests that are received or to be received with respect to the relevant bail-inable notes as a direct or indirect result of the making of the Order and any actions taken in furtherance of the Order, including from CDIC, the Bank, the liquidator of the Bank, if the Bank is wound up, the liquidator of a CDIC subsidiary incorporated or acquired by order of the Governor in Council for the purposes of facilitating the acquisition, management or disposal of real property or other assets of the Bank that CDIC may acquire as the result of its operations that is liquidated or the liquidator of a bridge institution if the bridge institution is wound up.

In connection with the compensation process, CDIC is required to estimate the liquidation value and the resolution value in respect of the portion of converted bail-inable notes and is required to consider the difference between the estimated day on which the liquidation value would be received and the estimated day on which the resolution value is, or would be, received.

CDIC must, within a reasonable period following a bail-in conversion, make an offer of compensation by notice to the relevant holders that held bail-inable notes equal to, or in value estimated to be equal to, the amount of compensation to which such holders are entitled or provide a notice stating that such holders are not entitled to any compensation. In either case such notice is required to include certain prescribed information, including important information regarding the rights of such holders to seek to object and have the compensation to which they are entitled determined by an assessor (a Canadian Federal Court judge) where holders of liabilities representing at least 10% of the principal amount and accrued and unpaid interest of the liabilities of the same class object to the offer or absence of compensation. The period for objecting is limited (45 days following the day on which a summary of the notice is published in the Canada Gazette) and failure by holders holding a sufficient principal amount plus accrued and unpaid interest of affected bail-inable notes to object within the prescribed period will result in the loss of any ability to object to the offered compensation or absence of compensation, as applicable. CDIC will pay the relevant holders the offered compensation within 135 days after the date on which a summary of the notice is published in the Canada Gazette if the offer of compensation is accepted, the holder does not notify CDIC of acceptance or objection to the offer or if the holder objects to the offer but the 10% threshold described above is not met within the aforementioned 45-day period.

Where an assessor is appointed, the assessor could determine a different amount of compensation payable, which could either be higher or lower than the original amount. The assessor is required to provide holders, whose compensation it determines, notice of its determination. The assessor’s determination is final and there are no further opportunities for review or appeal. CDIC will pay the relevant holders the compensation amount determined by the assessor within 90 days of the assessor’s notice.

By its acquisition of an interest in any bail-inable note, each holder or beneficial owner of that note is deemed to be bound by a bail-in conversion and so will have no further rights in respect of its bail-inable notes to the extent those bail-inable notes are converted in a bail-in conversion, other than those provided under the bail-in regime.

A similar compensation process to the one set out above applies, in certain circumstances, where as a result of CDIC’s exercise of bank resolution powers, notes are assigned to an entity which is then wound-up.

TLAC Guideline

In connection with the bail-in regime, the Office of the Superintendent of Financial Institutions’ (“OSFI”) guideline (the “TLAC Guideline”) on Total Loss Absorbing Capacity (“TLAC”) applies to and establishes standards for D-SIBs, including the Bank. Under the TLAC Guideline, beginning November 1, 2021, the Bank is required to maintain a minimum capacity to absorb losses composed of unsecured external long-term debt that meets the prescribed criteria or regulatory capital instruments to support recapitalization in the event of a failure. Bail-inable notes and regulatory capital instruments that meet the prescribed criteria will constitute TLAC of the Bank.

In order to comply with the TLAC Guideline, the note must provide for terms and conditions for the bail-inable notes necessary to meet the prescribed criteria and qualify at their issuance as TLAC instruments of the Bank under the TLAC Guideline. Those criteria include the following:

• the Bank cannot directly or indirectly have provided financing to any person for the express purpose of investing in the bail-inable notes;
• the bail-inable note is not subject to set-off or netting rights;
• the bail-inable note must not provide rights to accelerate repayment of principal or interest payments outside of bankruptcy, insolvency, wind-up or liquidation, except that events of default relating to the non-payment of scheduled principal and/or interest payments will be permitted where they are subject to a cure period of no less than 30 business days and clearly disclose to investors that: (i) acceleration is only permitted where an Order has not been made in respect of the Bank; and (ii) notwithstanding any acceleration, the instrument continues to be subject to a bail-in conversion prior to its repayment;
• the bail-inable note may be redeemed or purchased for cancellation only at the initiative of the Bank and, where the redemption or purchase would lead to a breach of the Bank’s TLAC requirements, that redemption or purchase would be subject to the prior approval of the Superintendent;
• the bail-inable note does not have credit-sensitive dividend or coupon features that are reset periodically based in whole or in part on the Bank’s credit standing; and
• where an amendment or variance of the bail-inable note’s terms and conditions would affect its recognition as TLAC, that amendment or variance will only be permitted with the prior approval of the Superintendent.

Risk Factors relating to the Notes as a result of Canadian bank resolution powers

Bail-inable notes will be subject to risks, including non-payment in full or conversion in whole or in part – by means of a transaction or series of transactions and in one or more steps – into common shares of the Bank or any of its affiliates, under Canadian bank resolution powers.

If the CDIC were to take action under the Canadian bank resolution powers with respect to the Bank, this could result in holders or beneficial owners of notes being exposed to losses and, in the case of bail-inable notes conversion of the notes in whole or in part. Upon a bail-in conversion, holders of bail-inable notes that are converted will be obligated to accept the common shares of the Bank or any of its affiliates into which such bail-inable notes, or any portion thereof, are converted, even if such holders or beneficial owners do not at the time consider such common shares to be an appropriate investment for them, and despite any change in the Bank or any of its affiliates, or the fact that such common shares are issued by an affiliate of the Bank, or any disruption to or lack of a market for such common shares or disruption to capital markets generally.

As a result, holders of bail-inable notes should consider the risk that they may lose all of their investment, including the principal amount plus any accrued interest, if CDIC were to take action under the Canadian bank resolution powers, including the bail-in regime, and that any remaining outstanding notes, or common shares of the Bank or any of its affiliates into which bail-inable notes are converted, may be of little value at the time of a bail-in conversion and thereafter.

Bail-inable notes will provide only limited acceleration and enforcement rights for the notes and will include other provisions intended to qualify such notes as TLAC.

In order to comply with the TLAC Guideline, where the bail-inable notes contain events of default, the terms of the bail-inable notes provide that acceleration will only be permitted (i) if the Bank defaults in the payment of the principal of, or interest on, such bail-inable notes and, in each case, the default continues for a period of 30 business days, or (ii) certain bankruptcy, insolvency or reorganization events occur.

Holders and beneficial owners of bail-inable notes may only exercise, or direct the exercise of, such rights in respect of bail-inable notes where an Order has not been made under Canadian bank resolution powers pursuant to subsection 39.13(1) of the CDIC Act in respect of the Bank. Notwithstanding the exercise of those rights, bail-inable notes will continue to be subject to bail-in conversion until repaid in full.

The terms of the bail-inable notes also provide that holders or beneficial owners of bail-inable notes will not be entitled to exercise, or direct the exercise of, any set-off or netting rights with respect to bail-inable notes. In addition, where an amendment, modification or other variance that can be made to the bail- inable notes would affect the recognition of the bail-inable notes by the Superintendent as TLAC, that amendment, modification or variance will require the prior approval of the Superintendent.

The circumstances surrounding a bail-in conversion are unpredictable and can be expected to have an adverse effect on the market price of bail-inable notes.

The decision as to whether the Bank has ceased, or is about to cease, to be viable is a subjective determination by the Superintendent that is outside the control of the Bank. Upon a bail-in conversion, the interests of depositors and holders of liabilities and securities of the Bank that are not converted will effectively all rank in priority to the portion of bail-inable notes that are converted. In addition, except as provided for under the compensation process, the rights of holders in respect of the bail-inable notes that have been converted will rank on parity with other holders of common shares of the Bank (or, as applicable, common shares of the affiliate whose common shares are issued on the bail-in conversion).

There is no limitation on the type of Order that may be made where it has been determined that the Bank has ceased, or is about to cease, to be viable. As a result, holders of bail-inable notes may be exposed to losses through the use of Canadian bank resolution powers other than bail-in conversion or in liquidation. See “Bail-inable notes will be subject to risks, including non-payment in full or conversion in whole or in part – by means of a transaction or series of transactions and in one or more steps – into common shares of the Bank or any of its affiliates, under Canadian bank resolution powers.” above.

Because of the uncertainty regarding when and whether an Order will be made and the type of Order that may be made, it will be difficult to predict when, if at all, bail-inable notes could be converted into common shares of the Bank or any of its affiliates, and there is not likely to be any advance notice of an Order. As a result of this uncertainty, trading behaviour in respect of the bail-inable notes may not follow trading behaviour associated with convertible or exchangeable securities or, in circumstances where the Bank is trending towards ceasing to be viable, other senior debt. Any indication, whether real or perceived, that the Bank is trending towards ceasing to be viable can be expected to have an adverse effect on the market price of the bail-inable notes, whether or not the Bank has ceased, or is about to cease, to be viable. Therefore, in those circumstances, holders of bail-inable notes may not be able to sell their bail-inable notes easily or at prices comparable to those of senior debt securities not subject to bail-in conversion.

The number of common shares to be issued in connection with, and the number of common shares that will be outstanding following, a bail-in conversion are unknown. It is also unknown whether the shares to be issued will be those of the Bank or one of its affiliates.

Under the bail-in regime there is no fixed and pre-determined contractual conversion ratio for the conversion of the bail-inable notes, or other shares or liabilities of the Bank that are subject to a bail-in conversion, into common shares of the Bank or any of its affiliates, nor are there specific requirements regarding whether liabilities subject to a bail-in conversion are converted into common shares of the Bank or any of its affiliates. CDIC determines the timing of the bail-in conversion, the portion of bail-inable shares and liabilities to be converted and the terms and conditions of the conversion, subject to parameters set out in the bail-in regime set out above under “Bail-in Conversion”.

As a result, it is not possible to anticipate the potential number of common shares of the Bank or its affiliates that would be issued in respect of any bail- inable note converted in a bail-in conversion, the aggregate number of such common shares that will be outstanding following the bail-in conversion, the effect of dilution on the common shares received from other issuances under or in connection with an Order or related actions in respect of the Bank or its affiliates or the value of any common shares received by the holder or beneficial owner, which could be significantly less than the principal amount of the converted bail-inable notes. It is also not possible to anticipate whether shares of the Bank or shares of its affiliates would be issued in a bail-in conversion. There may be an illiquid market, or no market at all, in the common shares issued upon a bail-in conversion and such holders or beneficial owners may not be able to sell those common shares at a price equal to the value of the converted bail-inable notes and as a result may suffer significant losses that may not be offset by compensation, if any, received as part of the compensation process.

By acquiring bail-inable notes, each holder or beneficial owner is deemed to agree to be bound by a bail-in conversion and so will have no further rights in respect of bail-inable notes that are converted in a bail-in conversion other than those provided under the bail-in regime. Any potential compensation to be provided through the compensation process under the CDIC Act is unknown.

The CDIC Act provides for a compensation process for holders of bail-inable notes who immediately prior to the making of an Order, directly or through an intermediary, own bail-inable notes that are converted in a bail-in conversion. Given the considerations involved in determining the amount of compensation, if any, that a holder that held bail-inable notes may be entitled to following an Order, it is not possible to anticipate what, if any, compensation would be payable in such circumstances. By its acquisition of an interest in any bail-inable note, each holder or beneficial owner of that note is deemed to agree to be bound by a bail-in conversion and so will have no further rights in respect of bail-inable notes to the extent those bail-inable notes are converted in a bail-in conversion, other than those provided under the bail-in regime.

Following a bail-in conversion, holders or beneficial owners that held bail-inable notes that have been converted will no longer have rights against the Bank as creditors.

Upon a bail-in conversion, the rights, terms and conditions of the portion of bail-inable notes that are converted, including with respect to priority and rights on liquidation, will no longer apply as the portion of converted bail-inable notes will have been converted on a full and permanent basis into common shares of the Bank or any of its affiliates ranking on parity with all other outstanding common shares of that entity. If a bail-in conversion occurs, then the interest of the depositors, other creditors and holders of liabilities of the Bank not bailed-in as a result of the bail-in conversion will all rank in priority to those common shares.

Given the nature of the bail-in conversion, holders or beneficial owners of bail-inable notes that are converted will become holders or beneficial owners of common shares at a time when the Bank’s and potentially its affiliates’ financial condition has deteriorated. They may also become holders or beneficial owners of common shares at a time when the relevant entity may have received or may receive a capital injection or equivalent support with terms that may rank in priority to the common shares issued in a bail-in conversion with respect to payment of dividends, rights on liquidation or other terms although there is no certainty that any such capital injection or support will be forthcoming.

Bail-inable notes may be redeemed after the occurrence of a TLAC Disqualification Event.

If a TLAC Disqualification Event (as defined in a bail-inable note) is specified in the bail-inable note, the Bank may, at its option, with the prior approval of the Superintendent, redeem all but not less than all of the particular bail-inable notes prior to their stated maturity date after the occurrence of the TLAC Disqualification Event, at the time and at the redemption price or prices specified in the bail-inable note, together with unpaid interest accrued thereon to, but excluding, the date fixed for redemption. If bail-inable notes are redeemed, the holder or beneficial owner of the bail-inable note may not be able to reinvest the redemption proceeds in securities offering a comparable anticipated rate of return. Additionally, although the terms of the bail-inable notes are anticipated to be established to satisfy the TLAC criteria within the meaning of the TLAC Guideline to which the Bank is subject, it is possible that any bail-inable notes may not satisfy the criteria in future rulemakings or interpretations.

SPECIAL NOTICE FOR INVESTORS IN BAIL-INABLE YANKEE CDs

Yankee CDs that are bail-inable CDs (the “CDs”) will be subject to conversion in whole or in part – by means of a transaction or series of transactions and in one or more steps – into common shares of the Bank or any of its affiliates under subsection 39.2(2.3) of the CDIC Act and to variation or extinguishment in consequence, and subject to the application of the laws of the Province of Ontario and the federal laws of Canada applicable therein in respect of the operation of the CDIC Act with respect to the CDs.

The CDs include waivers of the branch-creditor provisions (which are sometimes referred to as “marshalling” or “ring fencing” provisions) of the U.S. Federal and New York State banking laws applicable in the case of certain bankruptcy, insolvency, liquidation, winding-up or dissolution events involving the Bank.

The following information describes the Canadian bank resolution powers applicable to the CDs, including the bail-in regime (as defined below), and the branch- creditor provisions under U.S. Federal and New York State banking laws.  Capitalized terms used but not defined in this Special Notice have the meanings ascribed to them in the applicable term sheet for the CDs.

Risk Factors Relating to the CDs as a Result of Canadian Bank Resolution Powers

An investment in the CDs is subject to the risks described under “Risk Factors” in the management’s discussion and analysis of financial condition and results of operations included in the Bank’s Annual Report on Form 40-F for the fiscal year ended October 31, 2018, and in subsequent quarterly reports to shareholders that the Bank has filed on Form 6-K, which are incorporated by reference herein, as the same may be modified or superseded by subsequent filings with the Securities Exchange Commission. You should carefully consider whether the CDs are suited to your particular circumstances. The risks described below result from the Canadian bank resolution powers applicable to the CDs.

The CDs will be subject to risks, including non-payment in full or conversion in whole or in part – by means of a transaction or series of transactions and in one or more steps – into common shares of the Bank or any of its affiliates, under Canadian bank resolution powers.

Under Canadian bank resolution powers, the Canada Deposit Insurance Corporation (the “CDIC”) may, in circumstances where the Bank has ceased, or is about to cease, to be viable, assume temporary control or ownership of the Bank and may be granted broad powers by one or more orders of the Governor in Council (Canada), each of which we refer to as an “Order,” including the power to sell or dispose of all or a part of the assets of the Bank, and the power to carry out or cause the Bank to carry out a transaction or a series of transactions the purpose of which is to restructure the business of the Bank. As part of the Canadian bank resolution powers, certain provisions of and regulations under the Bank Act, the CDIC Act and certain other Canadian federal statutes pertaining to banks, which we refer to collectively as the “bail-in regime,” provide for a bank recapitalization regime for banks designated by the Superintendent (Canada) as domestic systemically important banks, which include the Bank. We refer to those domestic systemically important banks as “D-SIBs.” See “Canadian Bank Resolution Powers Including Bail-in” below.

If the CDIC were to take action under the Canadian bank resolution powers with respect to the Bank, this could result in holders or beneficial owners of the CDs being exposed to losses and conversion of the CDs in whole or in part – by means of a transaction or series of transactions and in one or more steps – into common shares of the Bank or any of its affiliates, which we refer to as a “bail-in conversion.”

Upon a bail-in conversion, if your CDs or any portion thereof are converted into common shares of the Bank or any of its affiliates, you will be obligated to accept those common shares, even if you do not at the time consider the common shares to be an appropriate investment for you, and despite any change in the Bank or any of its affiliates, or the fact that the common shares may be issued by an affiliate of the Bank, or any disruption to or lack of a market for the common shares or disruption to capital markets generally.

As a result, holders of CDs should consider the risk that they may lose all of their investment, including the principal amount plus any accrued interest, if CDIC were to take action under the Canadian bank resolution powers, including the bail-in regime, and that any remaining outstanding CDs, or common shares of the Bank or any of its affiliates into which CDs are converted, may be of little value at the time of a bail-in conversion and thereafter.

The CDs will provide only limited acceleration and enforcement rights for the CDs and will include other provisions intended to qualify the CDs as TLAC.

The terms of the CDs provide that acceleration will occur only if certain bankruptcy, insolvency or reorganization events occur with respect to the Bank or the Branch.

Acceleration will occur only if an Order has not been made pursuant to subsection 39.13(1) of the CDIC Act in respect of the Bank. Notwithstanding acceleration of the CDs, the CDs will continue to be subject to bail-in conversion until repaid in full. If less than all of the CDs are converted in a bail-in conversion, the portion of the CDs that is not converted will remain outstanding in accordance with their terms.

The terms of the CDs also provide that holders or beneficial owners of CDs will not be entitled to exercise, or direct the exercise of, any set-off or netting rights with respect to the CDs. In addition, where an amendment, modification or other variance that can be made to the CDs would affect the recognition of the CDs by the Superintendent (Canada) as TLAC, that amendment, modification or variance will require the prior approval of the Superintendent (Canada).

The circumstances surrounding a bail-in conversion are unpredictable and can be expected to have an adverse effect on the market price of the CDs.

The decision as to whether the Bank has ceased, or is about to cease, to be viable is a subjective determination by the Superintendent (Canada) that is outside the control of the Bank. Upon a bail-in conversion, the interests of depositors and holders of liabilities and securities of the Bank that are not converted will effectively all rank in priority to the portion of CDs that are converted. In addition, except as provided for under the compensation regime under the CDIC Act, the rights of holders in respect of the CDs that have been converted will rank on parity with other holders of common shares of the Bank (or, as applicable, common shares of the affiliate whose common shares are issued on the bail-in conversion).

There is no limitation on the type of Order that may be made where it has been determined that the Bank has ceased, or is about to cease, to be viable. As a result, holders of CDs may be exposed to losses through the use of Canadian bank resolution powers other than bail-in conversion or in liquidation. See “The CDs will be subject to risks, including non-payment in full or conversion in whole or in part – by means of a transaction or series of transactions and in one or more steps – into common shares of the Bank or any of its affiliates, under Canadian bank resolution powers.” above.

Because of the uncertainty regarding when and whether an Order will be made and the type of Order that may be made, it will be difficult to predict when, if at all, CDs could be converted into common shares of the Bank or any of its affiliates, and there is not likely to be any advance notice of an Order. As a result of this uncertainty, trading behavior in respect of the CDs may not follow trading behavior associated with convertible or exchangeable securities or, in circumstances where the Bank is trending towards ceasing to be viable, other senior debt. Any indication, whether real or perceived, that the Bank is trending towards ceasing to be viable can be expected to have an adverse effect on the market price of the CDs, whether or not the Bank has ceased, or is about to cease, to be viable. Therefore, in those circumstances, holders of CDs may not be able to sell their CDs easily or at prices comparable to those of senior debt securities not subject to bail-in conversion.

The number of common shares to be issued in connection with, and the number of common shares that will be outstanding following, a bail-in conversion are unknown. It is also unknown whether the shares to be issued will be those of the Bank or one of its affiliates.

Under the bail-in regime there is no fixed and pre-determined contractual conversion ratio for the conversion of the CDs, or other shares or liabilities of the Bank that are subject to a bail-in conversion, into common shares of the Bank or any of its affiliates, nor are there specific requirements regarding whether liabilities subject to a bail-in conversion are converted into common shares of the Bank or any of its affiliates. CDIC determines the timing of the bail-in conversion, the portion of bail-inable shares and liabilities to be converted and the terms and conditions of the conversion, subject to parameters set out in the bail-in regime set out below under “Canadian Bank Resolution Powers Including Bail-in—Bail-in Conversion”.

As a result, it is not possible to anticipate the potential number of common shares of the Bank or its affiliates that would be issued in respect of any CD converted in a bail-in conversion, the aggregate number of such common shares that will be outstanding following the bail-in conversion, the effect of dilution on the common shares received from other issuances under or in connection with an Order or related actions in respect of the Bank or its affiliates or the value of any common shares received by the holder or beneficial owner, which could be significantly less than the principal amount of the converted CDs. It is also not possible to anticipate whether shares of the Bank or shares of its affiliates would be issued in a bail-in conversion. There may be an illiquid market, or no market at all, in the common shares issued upon a bail-in conversion and such holders or beneficial owners may not be able to sell those common shares at a price equal to the value of the converted CDs and as a result may suffer significant losses that may not be offset by compensation, if any, received as part of the compensation process.

By acquiring CDs, each holder or beneficial owner is deemed to agree to be bound by a bail-in conversion and so will have no further rights in respect of CDs that are converted in a bail-in conversion other than those provided under the bail-in regime. Any potential compensation to be provided through the compensation process under the CDIC Act is unknown.

The CDIC Act provides for a compensation process for persons that, immediately prior to the making of an Order, directly or through an intermediary, owned CDs that were converted in a bail-in conversion. Given the considerations involved in determining the amount of compensation, if any, that such a person that previously held CDs may be entitled to following an Order, it is not possible to anticipate what, if any, compensation would be payable in such circumstances. By its acquisition of an interest in any CD, each holder or beneficial owner of that CD is deemed to agree to be bound by a bail-in conversion and so will have no further rights in respect of CDs to the extent those CDs are converted in a bail-in conversion, other than those provided under the bail-in regime.

Following a bail-in conversion, holders or beneficial owners that held CDs that have been converted will no longer have rights against the Branch or the Bank as creditors with respect to the converted CDs.

Upon a bail-in conversion, the rights, terms and conditions of the portion of CDs that are converted, including with respect to priority and rights on liquidation, will no longer apply as the portion of converted CDs will have been converted on a full and permanent basis into common shares of the Bank or any of its affiliates ranking on parity with all other outstanding common shares of that entity. If a bail-in conversion occurs, then the interest of the depositors, other creditors and holders of liabilities of the Bank not bailed-in as a result of the bail-in conversion will all rank in priority to those common shares.

Given the nature of the bail-in conversion, holders or beneficial owners of CDs that are converted will become holders or beneficial owners of common shares at a time when the Bank’s and potentially its affiliates’ financial condition has deteriorated. They may also become holders or beneficial owners of common shares at a time when the relevant entity may have received or may receive a capital injection or equivalent support with terms that may rank in priority to the common shares issued in a bail-in conversion with respect to payment of dividends, rights on liquidation or other terms although there is no certainty that any such capital injection or support will be forthcoming.

The CDs may be redeemed after the occurrence of a TLAC Disqualification Event.

If specified in the applicable term sheet for your CDs, the Bank, acting through the Branch, may, at its option, with the prior approval of the Superintendent (Canada), redeem all but not less than all of the CDs prior to their stated maturity date after the occurrence of a TLAC Disqualification Event, at the time and at the redemption price or prices specified in the CD, together with unpaid interest accrued thereon to, but excluding, the date fixed for redemption. If CDs are redeemed, the holder or beneficial owner of the CD may not be able to reinvest the redemption proceeds in securities offering a comparable anticipated rate of return. Additionally, although the terms of the CDs are anticipated to be established to satisfy the TLAC criteria within the meaning of the TLAC Guideline to which the Bank is subject, it is possible that any CDs may not satisfy the criteria established in future rulemakings or interpretations.

If the Bank were to be subject to bankruptcy, insolvency or liquidation proceedings, the holders and beneficial owners of the CDs have waived the benefits of the separate proceedings that would be conducted with respect to the New York or other U.S. branches and agencies of the Bank. Holders of bail-inable instruments may recover less under the bail-in regime and the compensation regime under the CDIC Act than they would otherwise receive in a U.S. receivership proceeding involving the Branch.

As described below under “Branch Resolution Proceedings in the United States,” each of Section 606(4) of the New York Banking Law and Section 4(j) of the International Banking Act provides for separate proceedings with respect to U.S. branches and agencies of non-U.S. banks, such as the Branch, in the case of an insolvency and certain other events with respect to the non-U.S. bank. However, by its acquisition of an interest in any CD, each holder or beneficial owner of that CD is deemed to irrevocably waive its rights to bring claims and/or enjoy any priority in any such proceeding at any time when any of the events described in clause (i) under “Events of Default” has occurred and is continuing, and the NYSDFS or OCC, as the case may be, takes possession, or is in possession, of the business, property and/or assets of the Branch. As a consequence, the holders and beneficial owners of CDs may recover less ratably than the holders of all other liabilities issued by the Bank, acting through the Branch, that are entitled to the preference under U.S. receivership proceedings involving the Branch described above. In the event bankruptcy, insolvency or liquidation proceedings for the Bank are pending, holders and beneficial owners would be required to pursue their claims with respect to the CDs in a Canadian insolvency or liquidation proceeding for the Bank. To the extent that holders of the CDs are entitled to recovery with respect to the CDs in any Canadian action or proceeding, the holders of the CDs would not be entitled in such an action or proceeding to a recovery in U.S. dollars and would be entitled in such an action or proceeding only to a recovery in Canadian dollars.

As described below under “Canadian Bank Resolution Powers Including Bail-in—Compensation Regime”, the compensation to which holders or beneficial owners of bail-inable instruments, such as the CDs, are entitled under the compensation regime under the CDIC Act is the difference, to the extent it is positive, between the estimated liquidation value and the estimated resolution value of the relevant bail-inable instruments. As a result of the waiver described above, holders and beneficial owners of the CDs will not be entitled to the protections to which they would otherwise be entitled in a U.S. receivership proceeding involving the Branch and they may therefore recover less in connection with the bail-in of the Bank than would be the case in the absence of the waiver. Accordingly, holders of bail-inable instruments may recover less under the bail-in regime and the compensation regime under the CDIC Act than they would otherwise receive in a U.S. receivership proceeding involving the Branch.

Canadian Bank Resolution Powers Including Bail-in

Under Canadian bank resolution powers, the CDIC may, in circumstances where the Bank has ceased, or is about to cease, to be viable, assume temporary control or ownership of the Bank and may be granted broad powers by one or more Orders of the Governor in Council (Canada), including the power to sell or dispose of all or a part of the assets of the Bank, and the power to carry out or cause the Bank to carry out a transaction or a series of transactions the purpose of which is to restructure the business of the Bank. As part of the Canadian bank resolution powers, certain provisions of, and regulations under the Bank Act and certain other Canadian federal statutes pertaining to banks, which we refer to collectively as the “bail-in regime,” provide for a bank recapitalization regime for banks designated by the Superintendent (Canada) as D-SIBs.

The expressed objectives of the bail-in regime include reducing government and taxpayer exposure in the unlikely event of a failure of a D-SIB, reducing the likelihood of such a failure by increasing market discipline and reinforcing that bank shareholders and creditors are responsible for the D-SIBs’ risks and not taxpayers, and preserving financial stability by empowering the CDIC to quickly restore a failed D-SIB to viability and allow it to remain open and operating, even where the D-SIB has experienced severe losses.

Under the CDIC Act, in circumstances where the Superintendent (Canada) is of the opinion that the Bank has ceased, or is about to cease, to be viable and viability cannot be restored or preserved by exercise of Superintendent (Canada)’s powers under the Bank Act, the Superintendent (Canada), after providing the Bank with a reasonable opportunity to make representations, is required to provide a report to CDIC. Following receipt of the Superintendent (Canada)’s report, CDIC may request the Minister of Finance for Canada (the “Minister of Finance”) to recommend that the Governor in Council (Canada) make an Order and, if the Minister of Finance is of the opinion that it is in the public interest to do so, the Minister of Finance may recommend that the Governor in Council (Canada) make, and on that recommendation, the Governor in Council (Canada) may make, one or more of the following  Orders:

• vesting in CDIC, the shares and subordinated debt of the Bank specified in the Order, which we refer to as a “vesting order”;
• appointing CDIC as receiver in respect of the Bank, which we refer to as a “receivership order”;
• if a receivership order has been made, directing the Minister of Finance to incorporate a federal institution designated in the Order as a bridge institution wholly-owned by CDIC and specifying the date and time as of which the Bank’s deposit liabilities are assumed, which we refer to as a “bridge bank order”; or
• if a vesting order or receivership order has been made, directing CDIC to carry out a conversion, by converting or causing the Bank to convert, in whole or in part – by means of a transaction or series of transactions and in one or more steps – the shares and liabilities of the Bank that are subject to the bail-in regime into common shares of the Bank or any of its affiliates, which we refer to as a “conversion order”.

Following a vesting order or receivership order, CDIC will assume temporary control or ownership of the Bank and will be granted broad powers under that Order, including the power to sell or dispose of all or a part of the assets of the Bank, and the power to carry out or cause the Bank to carry out a transaction or a series of transactions the purpose of which is to restructure the business of the Bank.

Under a bridge bank order, CDIC has the power to transfer the Bank’s insured deposit liabilities and certain assets and other liabilities of the Bank to a bridge institution. Upon the exercise of that power, any assets and liabilities of the Bank that are not transferred to the bridge institution would remain with the Bank, which would then be wound up. In such a scenario, any liabilities of the Bank, including any outstanding CDs (whether or not such CDs are bail-inable instruments), that are not assumed by the bridge institution could receive only partial or no repayment in the ensuing wind-up of the Bank.

Upon the making of a conversion order, prescribed shares and liabilities under the bail-in regime that are subject to that conversion order will, to the extent converted, be converted into common shares of the Bank or any of its affiliates, as determined by the CDIC.

Subject to certain exceptions discussed below, senior debt issued on or after September 23, 2018, with an initial or amended term to maturity (including explicit or embedded options) greater than 400 days, that is unsecured or partially secured and that has been assigned a CUSIP or ISIN or similar identification number are subject to a bail-in conversion. We refer to senior debt instruments that are subject to bail-in conversion, such as the CDs, as “bail-inable instruments.” Shares, other than common shares, and subordinated debt of the Bank are also subject to a bail-in conversion, unless they are non-viability contingent capital.

Shares and liabilities which would otherwise be bail-inable but were issued before September 23, 2018 are not subject to a bail-in conversion unless, in the case of any such liability, including any CDs, the terms of such liability are amended to increase their principal amount or to extend their term to maturity on or after September 23, 2018, and that liability, as amended, meets the requirements to be subject to a bail-in conversion. Covered bonds, certain derivatives and certain structured notes (as such term is used under the bail-in regime) are expressly excluded from a bail-in conversion. To the extent that any debt instruments constitute structured notes (as such term is used under the bail-in regime) they will not be bail-inable instruments. As a result, claims of some creditors whose claims would otherwise rank equally with those of the holders holding bail-inable instruments would be excluded from a bail-in conversion and thus the holders and beneficial owners of bail-inable instruments will have to absorb losses ahead of these other creditors as a result of the bail-in conversion. The terms and conditions of the bail-in conversion will be determined by CDIC in accordance with and subject to certain requirements discussed below.

Bail-in Conversion

Under the bail-in regime there is no fixed and pre-determined contractual conversion ratio for the conversion of the bail-inable instruments, or other shares or liabilities of the Bank that are subject to a bail-in conversion, into common shares of the Bank or any of its affiliates nor are there specific requirements regarding whether liabilities subject to a bail-in conversion are converted into common shares of the Bank or any of its affiliates. CDIC determines the timing of the bail-in conversion, the portion of bail-inable shares and liabilities to be converted and the terms and conditions of the conversion, subject to parameters set out in the bail-in regime. Those parameters include that:

• in carrying out a bail-in conversion, CDIC must take into consideration the requirement in the Bank Act for banks to maintain adequate capital;
• CDIC must use its best efforts to ensure that shares and liabilities subject to a bail-in conversion are only converted after all subordinate ranking shares and liabilities that are subject to a bail-in conversion and any subordinate non-viability contingent capital instruments have been previously converted or are converted at the same time;
• CDIC must use its best efforts to ensure that the converted part of the liquidation entitlement of a share subject to a bail-in conversion, or the converted part of the principal amount and accrued and unpaid interest of a liability subject to a bail-in conversion, is converted on a pro rata basis for all shares or liabilities subject to a bail-in conversion of equal rank that are converted during the same restructuring period;
• holders of shares and liabilities that are subject to a bail-in conversion must receive a greater number of common shares per dollar of the converted part of the liquidation entitlement of their shares, or the converted part of the principal amount and accrued and unpaid interest of their liabilities, than holders of any subordinate shares or liabilities subject to a bail-in conversion that are converted during the same restructuring period or of any subordinate non-viability contingent capital that is converted during the same restructuring period;
• holders of shares or liabilities subject to a bail-in conversion of equal rank that are converted during the same restructuring period must receive the same number of common shares per dollar of the converted part of the liquidation entitlement of their shares or the converted part of the principal amount and accrued and unpaid interest of their liabilities; and
• holders of shares or liabilities subject to a bail-in conversion must receive, if any non-viability contingent capital of equal rank to the shares or liabilities is converted during the same restructuring period, a number of common shares per dollar of the converted part of the liquidation entitlement of their shares, or the converted part of the principal amount and accrued and unpaid interest of their liabilities, that is equal to the largest number of common shares received by any holder of the non-viability contingent capital per dollar of that capital.

Compensation Regime

The CDIC Act provides for a compensation process for holders of bail-inable instruments who immediately prior to the making of an Order, directly or through an intermediary, own bail-inable instruments that are converted in a bail-in conversion. While this process applies to successors of those holders it does not apply to assignees or transferees of the holder following the making of the Order and does not apply if the amounts owing under the relevant bail-inable instruments are paid in full.

Under the compensation process, the compensation to which such holders are entitled is the difference, to the extent it is positive, between the estimated liquidation value and the estimated resolution value of the relevant bail- inable instruments. The liquidation value is the estimated value the bail-inable instrument holders would have received if an order  under the Winding-up and Restructuring Act (Canada) had been made in respect of the Bank, as if no Order had been made and without taking into consideration any assistance, financial or otherwise, that is or may be provided to the Bank, directly or indirectly, by CDIC, the Bank of Canada, the Government of Canada or a province of Canada, after any order  to wind up the Bank has been made.

The resolution value in respect of relevant bail-inable instruments is the aggregate estimated value of the following: (a) the relevant bail-inable instruments, if they are not held by CDIC and they are not converted, after the making of an Order, into common shares under a bail-in conversion; (b) common shares that are the result of a bail-in conversion after the making of an Order; (c) any dividend or interest payments made, after the making of the Order, with respect to the relevant bail-inable instruments to any person other than CDIC; and (d) any other cash, securities or other rights or interests that are received or to be received with respect to the relevant bail-inable instruments as a direct or indirect result of the making of the Order and any actions taken in furtherance of the Order, including from CDIC, the Bank, the liquidator of the Bank, if the Bank is wound up, the liquidator of a CDIC subsidiary incorporated or acquired by Order of the Governor in Council for the purposes of facilitating the acquisition, management or disposal of real property or other assets of the Bank that CDIC may acquire as the result of its operations that is liquidated or the liquidator of a bridge institution if the bridge institution is wound up.

In connection with the compensation process, CDIC is required to estimate the liquidation value and the resolution value in respect of the portion of converted bail-inable instruments and is required to consider the difference between the estimated day on which the liquidation value would be received and the estimated day on which the resolution value is, or would be, received.

CDIC must, within a reasonable period following a bail-in conversion, make an offer of compensation by notice to the relevant holders that held bail-inable instruments equal to, or in value estimated to be equal to, the amount of compensation to which such holders are entitled or provide a notice stating that such holders are not entitled to any compensation. In either case such notice is required to include certain prescribed information, including important information regarding the rights of such holders to seek to object and have the compensation to which they are entitled determined by an assessor (a Canadian Federal Court judge) where holders of liabilities representing at least 10% of the principal amount and accrued and unpaid interest of the liabilities of the same class object to the offer or absence of compensation. The period for objecting is limited (45 days following the day on which a summary of the notice is published in the Canada Gazette) and failure by holders holding a sufficient principal amount plus accrued and unpaid interest of affected bail-inable instruments to object within the prescribed period will result in the loss of any ability to object to the offered compensation or absence of compensation, as applicable. CDIC will pay the relevant holders the offered compensation within 135 days after the date on which a summary of the notice is published in the Canada Gazette if the offer of compensation is accepted, the holder does not notify CDIC of acceptance or objection to the offer or if the holder objects to the offer but the 10% threshold described above is not met within the aforementioned 45-day period.

Where an assessor is appointed, the assessor could determine a different amount of compensation payable, which could either be higher or lower than the original amount. The assessor is required to provide holders, whose compensation it determines, notice of its determination. The assessor’s determination is final and there are no further opportunities for review or appeal. CDIC will pay the relevant holders the compensation amount determined by the assessor within 90 days of the assessor’s notice.

By its acquisition of an interest in any bail-inable instrument, each holder or beneficial owner of that instrument is deemed to be bound by a bail-in conversion and so will have no further rights in respect of its bail-inable instruments to the extent those bail-inable instruments are converted in a bail-in conversion, other than those provided under the bail-in regime.

A similar compensation process to the one set out above applies, in certain circumstances, where as a result of CDIC’s exercise of bank resolution powers, notes are assigned to an entity which is then wound-up.

TLAC Guideline

In connection with the bail-in regime, the TLAC Guideline applies to and establishes standards for D-SIBs, including the Bank. Under the TLAC Guideline, beginning November 1, 2021, the Bank is required to maintain a minimum capacity to absorb losses composed of unsecured external long-term debt that meets the prescribed criteria or regulatory capital instruments to support recapitalization in the event of a failure. Bail-inable instruments and regulatory capital instruments that meet the prescribed criteria will constitute TLAC of the Bank.

In order to comply with the TLAC Guideline, the instrument must provide for terms and conditions for the bail-inable instruments necessary to meet the prescribed criteria and qualify at their issuance as TLAC instruments of the Bank under the TLAC Guideline. Those criteria include the following:

• the Bank cannot directly or indirectly have provided financing to any person for the express purpose of investing in the bail-inable instrument;
• the bail-inable instrument is not subject to set-off or netting rights;
• the bail-inable instrument must not provide rights to accelerate repayment of principal or interest payments outside of bankruptcy, insolvency, wind-up or liquidation, except that events of default relating to the non- payment of scheduled principal and/or interest payments will be permitted where they are subject to a cure period of no less than 30 business days and clearly disclose to investors that: (i) acceleration is only permitted where an Order has not been made in respect of the Bank; and (ii) notwithstanding any acceleration, the instrument could still be subject to a bail-in conversion prior to its repayment;
• the bail-inable instrument may be redeemed or purchased for cancellation only at the initiative of the Bank and, where the redemption or purchase would lead to a breach of the Bank’s TLAC requirements, that redemption or purchase would be subject to the prior approval of the Superintendent (Canada);
• the bail-inable instrument does not have credit-sensitive dividend or coupon features that are reset periodically based in whole or in part on the Bank’s credit standing; and
• where an amendment or variance of the bail-inable instrument’s terms and conditions would affect its recognition as TLAC, that amendment or variance will only be permitted with the prior approval of the Superintendent (Canada).

Branch Resolution Proceedings in the United States

A general discussion of the regulation and supervision of the Bank’s operations in the United States and in other jurisdictions can be found in the section “Description of the Business” in the Bank’s Annual Information Form, which is part of the Bank’s Report on Form 40-F for the fiscal year ended October 31, 2018 and which is incorporated by reference herein, as the same may be modified or superseded by subsequent filings with the Securities Exchange Commission. The U.S. branches of the Bank, including the Branch, are subject to direct supervision and regulation by the jurisdictions by which they were licensed. The branch resolution regime applicable to the Branch is described below.

The Branch is a branch of the Bank licensed by the NYSDFS under the New York Banking Law. The Branch is examined by the NYSDFS and the Federal Reserve Bank of New York and is subject to New York and U.S. Federal banking laws and regulations applicable to a foreign bank that operates a New York branch.

The terms of the CDs provide that by its acquisition of an interest in any CD, each holder or beneficial owner of that CD is deemed to irrevocably waive its rights, at any time when any of the events described in clause (i) under “Events of Default” in the applicable term sheet for the CDs has occurred and is continuing, (i) to establish an accepted claim under Section 606(4) of the New York Banking Law and/or an allowed or proved claim for purposes of Section 4(j) of the International Banking Act and (ii) to any preference to which it may become entitled under Section 606(4) of the New York Banking Law, under Section 4(j) of the International Banking Act or under any other similar law to the extent necessary so that the CDs are not legally or economically senior to the Bank’s depositors and/or other general creditors if any of the events described in clause (i) under “Events of Default” in the applicable term sheet for the CDs occurs.

Section 606(4) of the New York Banking Law provides that the NYSDFS may take possession of the business and property in the State of New York of the Bank:

• if the Bank’s New York license has been surrendered or revoked;
• if the Bank is in liquidation in the jurisdiction of its domicile (that is, Canada) or elsewhere;
• if the NYSDFS determines that there is reason to doubt the Bank’s ability or willingness to pay in full the accepted claims specified pursuant to the New York Banking Law; or
• if the NYSDFS determines that the circumstances that would permit the NYSDFS to take possession of the business and property of a New York State-chartered bank exist with respect to the Bank. These circumstances include, among others, the Bank’s violation of any law, its conduct of business in an unauthorized or unsafe manner, and the Bank’s suspension of payment of its obligations.

Section 606(4) further provides that in liquidating or dealing with the business and property of a New York branch, such as the Branch, the claims of creditors arising out of transactions with the New York branch may be accepted or rejected by the NYSDFS. Those claims that are not “rejected” would be “accepted” with respect to the Bank’s assets in New York, to the exclusion of claims of other creditors of the Bank, and without prejudice to the rights of the holders of “accepted” or “rejected” claims to be satisfied out of other assets of the Bank. Upon payment in full of the “accepted” claims and the expenses of the liquidation, Section 606(4) provides that the NYSDFS is to turn over the remaining assets (i) first, to other offices of the Bank that are being liquidated in the United States to the extent the liquidators of those offices do not have sufficient resources to pay the claims on those offices and the expenses of liquidation in full and (ii) second, to the home office of the Bank or, if applicable, to the appointed liquidator or receiver of the Bank in the jurisdiction of its domicile (that is, Canada).

In addition, the Comptroller of the Currency (“OCC”) has the authority to take possession of all the property and assets of a non-U.S. bank in the United States in the circumstances set forth in Section 4(j) of the International Banking Act. Section 4(j) provides that the OCC may appoint a receiver (i)  to take possession of all the non-U.S. bank’s assets in the United States, and (ii) to distribute to each depositor and each other creditor of the non-U.S. bank with a “proved” or “allowed” claim the full amount of the claim arising out of transactions with the U.S. branches and agencies of the non-U.S. bank, subject to specified exceptions, if:

• the OCC revokes the license of a non-U.S. bank to operate a Federal branch or agency under the International Banking Act;
• the non-U.S. bank fails to satisfy a judgment against any Federal branch or agency it operates arising out of a transaction with any such Federal branch or agency; or
• the OCC determines that the non-U.S. bank has become insolvent.

Upon payment in full of the “proved” and “allowed” claims as well as the expenses of the receivership, Section 4(j) would direct the receiver to turn over the remaining assets to the home office of the non-U.S. bank or, if applicable, to the appointed liquidator or receiver of the foreign bank in the jurisdiction of its domicile.

As a consequence of each holder’s and beneficial owner’s waiver of the rights to those preferences, if the NYSDFS or the OCC (or any appointed receiver), as the case may be, takes possession, or is in possession, of the business, property and/or assets of the Branch, the holders of CDs may recover less ratably than the holders of all other liabilities issued by the Bank, acting through the Branch, that are entitled to the preference under U.S. receivership proceedings involving the Branch described above. In the event bankruptcy, insolvency, liquidation or wind-up proceedings for the Bank are pending, holders and beneficial owners would be required to pursue their claims with respect to the CDs in a Canadian bankruptcy, insolvency, liquidation or wind-up proceeding for the Bank. To the extent that holders of the CDs are entitled to recovery with respect to the CDs in any Canadian action or proceeding, the holders of the CDs would not be entitled in such an action or proceeding to a recovery in U.S. dollars and would be entitled in such an action or proceeding only to a recovery in Canadian dollars.

In addition, the compensation to which holders or beneficial owners of bail-inable instruments, such as the CDs, are entitled under the compensation regime under the CDIC Act is the difference, to the extent it is positive, between the estimated liquidation value and the estimated resolution value of the relevant bail-inable instruments. As a result of the waiver described above, holders and beneficial owners of the CDs will not be entitled to the protections to which they would otherwise be entitled in a U.S. receivership proceeding involving the Branch and they may therefore recover less in connection with the bail-in of the Bank than would be the case in the absence of the waiver. Accordingly, holders of bail-inable instruments may recover less under the bail-in regime and the compensation regime under the CDIC Act than they would otherwise receive in a U.S. receivership proceeding involving the Branch. For additional information, see “Risk Factors Relating to the CDs as a Result of Canadian Bank Resolution Powers—If the Bank were to be subject to bankruptcy, insolvency or liquidation proceedings, the holders and beneficial owners of the CDs have waived the benefits of the separate proceedings that would be conducted with respect to the New York or other U.S. branches and agencies of the Bank. Holders of bail-inable instruments may recover less under the bail-in regime and the compensation regime under the CDIC Act than they would otherwise receive in a U.S. receivership proceeding involving the Branch.” and “Waiver of Certain Priority Rights Under U.S. Banking Laws” within Annex A to the term sheet applicable to the bail-inable Certificates of Deposit.