Manado Gold Corp.
-
Date: 2016-02-29
The National Bank of Canada (the “Bank”) short form base shelf prospectus dated June 20, 2014, as amended or supplemented (the “Prospectus”), the prospectus supplement to the
Prospectus dated June 27, 2014 (the “Prospectus Supplement”) and the pricing supplement No. VRAC66 dated February 24, 2016 (the “Pricing Supplement”) (together, the “Prospectus”),
containing important information relating to the Note Securities described in this document, have been filed with the securities regulatory authorities in each of the provinces of Canada.
A copy of the Prospectus is required to be delivered with this document. This document does not provide full disclosure of all material facts relating to the Note Securities offered.
Prospective investors should read the Prospectus, and any amendment thereto, for disclosure of those facts, especially risk factors relating to the Note Securities offered, before making
an investment decision. Capitalized terms used herein and not otherwise defined have the meaning ascribed thereto in the Pricing Supplement, the Prospectus Supplement and the
Prospectus. The Note Securities constitute Index Linked Note Securities under the Prospectus. NBC Variable ROC Auto Callable Note Securities (no direct currency exposure; price
return) Program.
NBC NOTE SECURITIES
NBC Variable ROC Auto Callable Note Securities (MaturityMonitored Barrier) linked to the EURO STOXX 50® Index, due on
March 24, 2022
INVESTMENT HIGHLIGHTS:
SELLING PERIOD:
February 25, 2016 to March 17, 2016
ISSUANCE DATE:
March 24, 2016
MATURITY DATE:
March 24, 2022
Reference Portfolio:
EURO STOXX 50® Index
Term:
6 years
Variable ROC Auto Callable Type:
Maturity-Monitored Barrier
Barrier:
-30.00%
ROC Payment Threshold:
-30.00%
Potential ROC Payment:
$2.75 semi-annually
Call Threshold:
15.00%
Participation Factor:
5.00%
Currency:
Canadian dollars
Early Trading Charge:
$3.60 per Note Security, declining every 10 days by $0.30
to be $0.00 after 120 days from and including the Issuance
Date.
Daily secondary market available under normal market conditions
SAMPLE RETURN CALCULATIONS:
Example 1
Date
ROC
Payment
Threshold
Reference
Portfolio
Return
Sep. 19, 2016
-30.00%
Mar. 17, 2017
-30.00%
Sep. 18, 2017
-30.00%
Example 2
Example 3
ROC Payment
Reference
Portfolio
Return
Reference
Portfolio
Return
ROC Payment
-5.00%
$2.75
-5.00%
-3.00%
$2.75
-3.00%
$2.75
$2.75
-6.00%
$2.75
-6.00%
$2.75
Example 4
ROC Payment
Reference
Portfolio
Return
ROC Payment
-5.00%
$2.75
-10.00%
$2.75
-10.00%
$2.75
-15.00%
$2.75
-15.00%
$2.75
-4.00%
$2.75
Mar. 19, 2018
-30.00%
-10.00%
$2.75
-10.00%
$2.75
-17.00%
$2.75
30.00%
$2.75
Sep. 17, 2018
-30.00%
-40.00%
--
-40.00%
--
-32.00%
--
--
--
Mar. 18, 2019
-30.00%
-35.00%
--
-35.00%
--
-35.00%
--
--
--
Sep. 17, 2019
-30.00%
-45.00%
--
-12.00%
$2.75
-37.00%
--
--
--
Mar. 17, 2020
-30.00%
-50.00%
--
-18.00%
$2.75
-38.00%
--
--
--
Sep. 17, 2020
-30.00%
-37.00%
--
-14.00%
$2.75
-40.00%
--
--
--
Mar. 17, 2021
-30.00%
-40.00%
--
-32.00%
--
-17.00%
$2.75
--
--
Sep. 17, 2021
-30.00%
-45.00%
--
-37.00%
--
-4.00%
$2.75
--
--
Mar. 17, 2022
-30.00%
-50.00%
--
-15.00%
$2.75
25.00%
$2.75
--
--
Sum of ROC Payments
$11.00
$22.00
$19.25
$11.00
Maturity Redemption
Payment
$50.00 (principal)
$100.00 ($78.00 principal, $22.00
interest)
$101.25 ($80.75 principal, $20.50
interest)
$101.50 ($89.00 principal, $12.50
interest)
Total Payments
$61.00
$122.00
$120.50
$112.50
The Reference Asset Return for the Reference Asset is a price return, and will not take into account
dividends and/or distributions paid by the issuers or constituents of the Reference Asset. As of February
17, 2016, the dividends and/or distributions paid on account of all of the issuers or constituents of the
Reference Asset in the Reference Portfolio represented an annual indicative yield of 3.15%, representing
an aggregate yield of approximately 18.90% over the term of the Note Securities, assuming that the
yield remains constant and the dividends and/or distributions are not reinvested.
Should you have any questions, do not
hesitate to contact your advisor.
FUNDSERV CODE: NBC1050
Dated February 24, 2016
2
Summary of the Offering
Issuer:
National Bank of Canada
Issuer Credit
Rating:
Long-term deposits rated DBRS: AA (low) / S&P: A / Moody’s: Aa3
The Note Securities have not been rated by any rating agencies.
Principal
Amount:
$100
Minimum
Subscription:
$5,000 (50 Note Securities) and integral multiples of $100 (1 Note Security) in excess thereof.
Variable
ROC Auto
Callable
Type:
Maturity-Monitored Barrier
Currency:
Canadian dollars
Issuance
Date:
March 24, 2016
Final
Valuation
Date:
March 17, 2022, subject to postponement under certain circumstances as described in the Prospectus and Prospectus Supplement.
Maturity
Date:
March 24, 2022
Reference
Portfolio:
Reference Asset name
Reference Asset
ticker from
Bloomberg
Price Source
Closing Level
Reference Asset
type
Reference Asset
Weight
EURO STOXX 50® Index
SX5E
STOXX Limited
Closing level
Index
100%
The Maturity Redemption Payment per Note Security will be as follows:
Maturity
Redemption
Payment:
(i)
if the Reference Portfolio Return is higher than the Call Threshold on a Call Valuation Date, the Note Securities will be automatically called
on the applicable Call Date and the Maturity Redemption Payment will be equal to $100 x [1 + Variable Return]; or
(ii)
if the Note Securities are not automatically called and the Reference Portfolio Return is positive on the Final Valuation Date, the Maturity
Redemption Payment will be equal to $100 x [1 + Variable Return]; or
(iii)
if the Note Securities are not automatically called and the Reference Portfolio Return is nil or negative but higher than the Barrier on the
Final Valuation Date, the Maturity Redemption Payment will be equal to $100; or
(iv)
if the Note Securities are not automatically called and the Reference Portfolio Return is negative and equal to or lower than the Barrier on
the Final Valuation Date, the Maturity Redemption Payment will be equal to $100 x [1 + Reference Portfolio Return].
Except for the ROC Payments during the term of the Note Securities, investors should understand from the foregoing that they will be entitled to a
single payment under the Note Securities on either the Maturity Date or a Call Date. If the Note Securities are automatically called the investment in
the Note Securities will terminate as of the applicable Call Date and as such, Holders will receive the Maturity Redemption Payment applicable to such
Call Date and not the Maturity Redemption Payment that they would have otherwise been entitled to on a subsequent Call Date or on the Maturity Date
if the Note Securities had not been called.
Notwithstanding the foregoing, the Maturity Redemption Payment will be subject to a minimum of 1% of the Principal Amount. The Maturity Redemption
Payment exceeding the Remaining Principal Amount, if any, will be on account of interest. Any Maturity Redemption Payment up to the Remaining
Principal Amount will be on account of principal.
A percentage calculated as follows:
(i)
where the Reference Portfolio Return on a given Call Valuation Date or Final Valuation Date is less than or equal to the Variable Return
Threshold, the Variable Return will be equal to 0%; or
(ii)
where the Reference Portfolio Return on a given Call Valuation Date or Final Valuation Date is greater than the Variable Return Thr eshold,
the Variable Return will be equal to the product of (i) the Participation Factor and (ii) the amount by which the Reference Portfolio Return
exceeds the Variable Return Threshold.
Variable
Return:
Participatio
n Factor:
5.00%
Barrier:
-30.00%
Variable
Return
Threshold:
0.00%
Reference
Portfolio
Return:
On any day, the weighted average return of the Reference Assets calculated as the sum of the Weighted Reference Asset Return of each of the Reference
Assets comprising the Reference Portfolio.
3
Weighted
Reference
Asset
Return:
For each Reference Asset contained in the Reference Portfolio and on any day, the product of (i) the Reference Asset Return and (ii) the Reference
Asset Weight.
For each Reference Asset contained in the Reference Portfolio and on any day, a number, expressed as a percentage, calculated as follows:
Reference
Asset
Return:
(Closing Level / Initial Level) – 1
The Reference Asset Return for the Reference Asset is a price return, and will not take into account dividends and/or distributions paid by the issuers
or constituents of the Reference Asset. As of February 17, 2016, the dividends and/or distributions paid on account of all of the issuers or constituents
of the Reference Asset in the Reference Portfolio represented an annual indicative yield of 3.15%, representing an aggregate yield of approximately
18.90% over the term of the Note Securities, assuming that the yield remains constant and the dividends and/or distributions are not reinvested.
Initial Level:
The Closing Level on the Issuance Date.
Final Level:
The Closing Level on the Call Valuation Date and the Final Valuation Date.
Provided that the Reference Portfolio Return is higher than the ROC Payment Threshold on the applicable ROC Payment Valuation Date, Holders will be
entitled to receive ROC Payments set forth under the column entitled “ROC Payments” in the table below on each ROC Payment Date. Such payments
will constitute partial repayments of the Principal Amount.
ROC Payment Valuation Dates /
Call Valuation Dates
Potential
ROC
Payments &
Call
Thresholds:
ROC Payment Thresholds
Call Thresholds
ROC Payments
ROC Payment Dates /
Call Dates
September 19, 2016
-30.00%
15.00%
$2.75
September 26, 2016
March 17, 2017
-30.00%
15.00%
$2.75
March 24, 2017
September 18, 2017
-30.00%
15.00%
$2.75
September 25, 2017
March 19, 2018
-30.00%
15.00%
$2.75
March 26, 2018
September 17, 2018
-30.00%
15.00%
$2.75
September 24, 2018
March 18, 2019
-30.00%
15.00%
$2.75
March 25, 2019
September 17, 2019
-30.00%
15.00%
$2.75
September 24, 2019
March 17, 2020
-30.00%
15.00%
$2.75
March 24, 2020
September 17, 2020
-30.00%
15.00%
$2.75
September 24, 2020
March 17, 2021
-30.00%
15.00%
$2.75
March 24, 2021
September 17, 2021
-30.00%
15.00%
$2.75
September 24, 2021
-30.00%
N/A
$2.75
Maturity Date
March 17, 2022
Potential sum of ROC Payments
over the term of the Note
Securities
$33.00
Agents:
National Bank Financial Inc. (“NBF”) and Desjardins Securities Inc. Desjardins Securities Inc. will act as Independent Agent.
Listing and
Secondary
Market:
The Note Securities will not be listed on any securities exchange or quotation system. NBF intends to maintain until the Final Valuation Date (or until a
Call Valuation Date, if the Note Securities are automatically called (i.e. redeemed) prior to the Maturity Date), under normal market conditions, a daily
secondary market for the Note Securities. If the price or the level of a Reference Asset is not published or, in an applicable case, if trading in a Reference
Asset is disrupted or suspended, or if any other Market Disruption Event occurs, NBF will generally deem that normal market conditions do not exist.
NBF may, in its sole discretion, stop maintaining a market for the Note Securities at any time without any prior notice to Holders. There can be no
assurance that a secondary market will develop or, if one develops, that it will be liquid.
In addition, any sale of Note Securities facilitated by NBF may be subject to an early trading charge, deductible from the sale proceeds of the Note
Securities. Holders who have purchased Note Securities using the FundSERV network will be limited to the FundSERV network to sell Note Securities.
Early
Trading
Charge:
$3.60 per Note Security, declining every 10 days by $0.30 to be $0.00 after 120 days from and including the Issuance Date.
Eligibility
for
Investment:
Eligible for RRSPs, RRIFs, RESPs, RDSPs, DPSPs and TFSAs. See “Eligibility for Investment” in the Prospectus Supplement and the Prospectus.
4
Suitability for Investment
The Note Securities are not suitable for all investors. In determining whether the Note Securities are a suitable investment for you please consider that:
the Note Securities provide no guaranteed ROC Payments and if the Reference Portfolio Return is equal to or lower than the ROC Payment Threshold on a ROC
Payment Valuation Date, you will receive no ROC Payment on the related ROC Payment Date, and you will receive no ROC Payments over the term of the Note
Securities if this occurs on all ROC Payment Valuation Dates;
the Note Securities provide no protection for your original principal investment and if (i) the Reference Portfolio Return is equal to or lower than the Call Threshold
on every Call Valuation Date and is equal to or lower than the Barrier on the Final Valuation Date, and (ii) the resulting Maturity Redemption Payment is less than
the Remaining Principal Amount, you will receive an amount which is less than your original principal investment over the term of the Note Securities;
in a scenario where the Reference Portfolio Return is higher than the Call Threshold on a Call Valuation Date or positive on the Final Valuation Date, there is no
Variable Return paid if the Reference Portfolio Return on such date is not above the Variable Return Threshold;
any positive Reference Portfolio Return in excess of the Variable Return Threshold on a Call Valuation Date or on the Final Valuation Date will be multiplied by a
Participation Factor which will result in a Holder receiving less than 100% of such excess positive Reference Portfolio Return;
your Note Securities will be redeemed automatically prior to the Maturity Date if on any Call Valuation Date the Reference Portfolio Return is higher than the Call
Threshold;
your investment strategy should be consistent with the investment features of the Note Securities;
your investment time horizon should correspond with the term of the Note Securities; and
your investment will be subject to the risk factors summarized in the section "Risk Factors" in the Pricing Supplement, Prospectus Supplement and the Prospectus.
Risk Factors
The Note Securities differ from conventional debt and fixed income investments in that they may provide Holders with return of capital payments prior to maturity;
repayment of the entire Principal Amount is not guaranteed. The Note Securities entail downside risk and are not designed to be alternatives to conventional debt and fixed
income investments or money market instruments.
Investing in the Note Securities involves risks that are described under “Risk Factors” in the Pricing Supplement, Prospectus Supplement and the Prospectus, including,
without limitation, the section therein entitled “Certain Risk Factors related to the Index Linked Note Securities”. Purchasers are urged to read the information about these
risks, together with the other information in the Pricing Supplement, the Prospectus Supplement and the Prospectus, before investing in the Note Securities. Holders who
are not prepared to accept the risks described in the Pricing Supplement, the Prospectus Supplement and the Prospectus should not invest in the Note Securities.
NOTICE
The Note Securities will not constitute deposits that are insured under the Canada Deposit Insurance Corporation Act or any other deposit insurance regime designed to
ensure the payment of all or a portion of a deposit upon insolvency of the deposit taking institution.
Amounts paid to Holders will depend on the performance of the Reference Portfolio. Neither the Bank, its affiliates, the Agents, nor any other person or entity guarantees
that Holders will receive an amount equal to their original investment in the Note Securities or guarantees that any return will be paid on the Note Securities. Since the
Note Securities are not protected and the Principal Amount will be at risk (other than the minimum Maturity Redemption Payment of 1% of the Principal Amount), it is
possible that Holders could lose some or substantially all of their original investment in the Note Securities.
For the various risks associated with such an investment, please see the “Risk Factors” section of this document and the “Risk Factors”
section in the Pricing Supplement, the Prospectus Supplement and the Prospectus. Any prospective investor must be able to bear the
risks involved and must meet the suitability requirement of the Note Securities. Please see the section “Suitability of the Note
Securities for Investors” in the Prospectus Supplement and the Pricing Supplement.