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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Royal Bank of Canada | NYSE:RY | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
1.95 | 1.97% | 101.17 | 101.31 | 99.99 | 100.12 | 2,470,596 | 01:00:00 |
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RBC Capital Markets®
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Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-189888
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Pricing Supplement
Dated January 29, 2015
To the Product Prospectus Supplement ERN-EI-1 Dated July 25,
2013, Prospectus Supplement Dated July 23, 2013, and Prospectus,
Dated July 23, 2013
|
$1,530,000
Buffered Bullish Enhanced Return Notes
Linked to the EURO STOXX 50® Index,
Due February 3, 2020
Royal Bank of Canada
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Per Note
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Total
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|||
Price to public
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100.00%
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$1,530,000
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||
Underwriting discounts and commissions(1)
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2.25%
|
$34,425
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Proceeds to Royal Bank of Canada(1)
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97.75%
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$1,495,575
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Buffered Bullish Enhanced Return Notes
Linked to the EURO STOXX 50® Index,
Due February 3, 2020
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||
Issuer:
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Royal Bank of Canada (“Royal Bank”)
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Issue:
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Senior Global Medium-Term Notes, Series F
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Underwriter:
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RBC Capital Markets, LLC (“RBCCM”)
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Reference Asset:
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EURO STOXX 50® Index
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Bloomberg Ticker:
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SX5E
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Currency:
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U.S. Dollars
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Minimum
Investment:
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$1,000 and minimum denominations of $1,000 in excess thereof
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Pricing Date:
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January 29, 2015
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Issue Date:
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February 3, 2015
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CUSIP:
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78012KBA4
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Valuation Date:
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January 29, 2020
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Payment at Maturity
(if held to maturity):
|
If, on the Valuation Date, the Percentage Change is positive, then the investor will receive an amount per $1,000 principal amount per Note equal to the lesser of::
1. Principal Amount + (Principal Amount x Percentage Change x Leverage Factor) and
2. Maximum Redemption Amount
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If, on the Valuation Date, the Percentage Change is less than or equal to 0%, but not by more than the Buffer Percentage (that is, the Percentage Change is between zero and -20%), then the investor will receive the principal amount only.
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If, on the Valuation Date, the Percentage Change is negative, by more than the Buffer Percentage (that is, the Percentage Change is between -20.01% and -100%), then the investor will receive a cash payment equal to:
Principal Amount + [Principal Amount x (Percentage Change + Buffer Percentage)]
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Percentage Change:
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The Percentage Change, expressed as a percentage, is calculated using the following formula:
Final Level - Initial Level
Initial Level
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Initial Level:
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3,371.83, which was the closing level of the Reference Asset on the Pricing Date.
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Final Level:
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The closing level of the Reference Asset on the Valuation Date.
|
Buffered Bullish Enhanced Return Notes
Linked to the EURO STOXX 50® Index,
Due February 3, 2020
|
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Leverage Factor:
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145% (subject to the Maximum Redemption Amount)
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Maximum
Redemption
Amount:
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187% multiplied by the principal amount
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Buffer Percentage:
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20%
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Buffer Level:
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2,697.46, which is 80% of the Initial Level.
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Maturity Date:
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February 3, 2020, subject to extension for market and other disruptions, as described in the product prospectus supplement dated July 25, 2013.
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Term:
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Approximately five (5) years
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Principal at Risk:
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The Notes are NOT principal protected. You may lose a substantial portion of your principal amount at maturity if there is a percentage decrease from the Initial Level to the Final Level of more than 20%.
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Calculation Agent:
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RBCCM
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U.S. Tax Treatment:
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By purchasing a Note, each holder agrees (in the absence of a change in law, an administrative determination or a judicial ruling to the contrary) to treat the Note as a pre-paid cash-settled derivative contract for U.S. federal income tax purposes. However, the U.S. federal income tax consequences of your investment in the Notes are uncertain and the Internal Revenue Service could assert that the Notes should be taxed in a manner that is different from that described in the preceding sentence. Please see the discussion herein under “Supplemental Discussion of U.S. Federal Income Tax Consequences” and the discussion (including the opinion of our counsel Morrison & Foerster LLP) in the product prospectus supplement dated July 25, 2013 under “Supplemental Discussion of U.S. Federal Income Tax Consequences,” which applies to the Notes.
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Secondary Market:
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RBCCM (or one of its affiliates), though not obligated to do so, plans to maintain a secondary market in the Notes after the Issue Date. The amount that you may receive upon sale of your Notes prior to maturity may be less than the principal amount of your Notes.
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Listing:
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The Notes will not be listed on any securities exchange.
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Clearance and
Settlement:
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DTC global (including through its indirect participants Euroclear and Clearstream, Luxembourg as described under “Description of Debt Securities—Ownership and Book-Entry Issuance” in the prospectus dated July 23, 2013).
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Terms Incorporated in
the Master Note:
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All of the terms appearing above the item captioned “Secondary Market” on pages P-2 and P-3 of this pricing supplement and the terms appearing under the caption “General Terms of the Notes” in the product prospectus supplement dated July 25, 2013, as modified by this pricing supplement.
|
Buffered Bullish Enhanced Return Notes
Linked to the EURO STOXX 50® Index,
Due February 3, 2020
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Buffered Bullish Enhanced Return Notes
Linked to the EURO STOXX 50® Index,
Due February 3, 2020
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Example 1—
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Calculation of the Payment at Maturity where the Percentage Change is positive.
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Percentage Change:
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5%
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Payment at Maturity:
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$1,000 + ($1,000 x 5% x 145%) = $1,000 + $72.50 = $1,072.50
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On a $1,000 investment, a 5.00% Percentage Change results in a Payment at Maturity of $1,072.50, a 7.25% return on the Notes.
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Example 2—
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Calculation of the Payment at Maturity where the Percentage Change is positive, and the Payment at Maturity is subject to the Maximum Redemption Amount.
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Percentage Change:
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65%
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Payment at Maturity:
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$1,000 + ($1,000 x 65% x 145%) = $1,000 + $942.50 = $1,942.50
However, the Maximum Redemption Amount is $1,870.00.
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On a $1,000 investment, a 65% Percentage Change results in a Payment at Maturity of $1,870.00,
an 87.00% return on the Notes.
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Example 3—
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Calculation of the Payment at Maturity where the Percentage Change is negative (but not by more than the Buffer Percentage).
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Percentage Change: | -10% | |
Payment at Maturity: |
At maturity, if the Percentage Change is negative BUT not by more than the Buffer Percentage, then the Payment at Maturity will equal the principal amount.
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On a $1,000 investment, a -10% Percentage Change results in a Payment at Maturity of $1,000,
a 0% return on the Notes.
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Example 4—
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Calculation of the Payment at Maturity where the Percentage Change is negative (by more than the Buffer Percentage).
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Percentage Change: | -30% | |
Payment at Maturity: |
$1,000 + [$1,000 x (-30% + 20%)] = $1,000 -$100 = $900
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On a $1,000 investment, a -30% Percentage Change results in a Payment at Maturity of $900,
a -10% return on the Notes.
|
Buffered Bullish Enhanced Return Notes
Linked to the EURO STOXX 50® Index,
Due February 3, 2020
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·
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Principal at Risk – Investors in the Notes could lose a substantial portion of their principal amount if there is a decline in the level of the Reference Asset. You will lose one percent of the principal amount of your Notes for each 1% that the Final Level is less than the Initial Level by more than 20%.
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·
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The Notes Do Not Pay Interest and Your Return May Be Lower than the Return on a Conventional Debt Security of Comparable Maturity – There will be no periodic interest payments on the Notes as there would be on a conventional fixed-rate or floating-rate debt security having the same maturity. The return that you will receive on the Notes, which could be negative, may be less than the return you could earn on other investments. Even if your return is positive, your return may be less than the return you would earn if you bought a conventional senior interest bearing debt security of Royal Bank.
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Your Potential Payment at Maturity Is Limited – The Notes will provide less opportunity to participate in the appreciation of the Reference Asset than an investment in a security linked to the Reference Asset providing full participation in the appreciation, because the payment at maturity will not exceed the Maximum Redemption Amount. Accordingly, your return on the Notes may be less than your return would be if you made an investment in a security directly linked to the positive performance of the Reference Asset.
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Payments on the Notes Are Subject to Our Credit Risk, and Changes in Our Credit Ratings Are Expected to Affect the Market Value of the Notes – The Notes are Royal Bank’s senior unsecured debt securities. As a result, your receipt of the amount due on the maturity date is dependent upon Royal Bank’s ability to repay its obligations at that time. This will be the case even if the level of the Reference Asset increases after the pricing date. No assurance can be given as to what our financial condition will be at the maturity of the Notes.
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There May Not Be an Active Trading Market for the Notes—Sales in the Secondary Market May Result in Significant Losses – There may be little or no secondary market for the Notes. The Notes will not be listed on any securities exchange. RBCCM and other affiliates of Royal Bank may make a market for the Notes; however, they are not required to do so. RBCCM or any other affiliate of Royal Bank may stop any market-making activities at any time. Even if a secondary market for the Notes develops, it may not provide significant liquidity or trade at prices advantageous to you. We expect that transaction costs in any secondary market would be high. As a result, the difference between bid and asked prices for your Notes in any secondary market could be substantial.
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You Will Not Have Any Rights to the Securities Included in the Reference Asset – As a holder of the Notes, you will not have voting rights or rights to receive cash dividends or other distributions or other rights that holders of securities included in the Reference Asset would have. The Final Level will not reflect any dividends paid on the securities included in the Reference Asset.
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Buffered Bullish Enhanced Return Notes
Linked to the EURO STOXX 50® Index,
Due February 3, 2020
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The Initial Estimated Value of the Notes Is Less than the Price to the Public – The initial estimated value set forth on the cover page of this pricing supplement does not represent a minimum price at which we, RBCCM or any of our affiliates would be willing to purchase the Notes in any secondary market (if any exists) at any time. If you attempt to sell the Notes prior to maturity, their market value may be lower than the price you paid for them and the initial estimated value. This is due to, among other things, changes in the level of the Reference Asset, the borrowing rate we pay to issue securities of this kind, and the inclusion in the price to the public of the underwriting discount and the estimated costs relating to our hedging of the Notes. These factors, together with various credit, market and economic factors over the term of the Notes, are expected to reduce the price at which you may be able to sell the Notes in any secondary market and will affect the value of the Notes in complex and unpredictable ways. Assuming no change in market conditions or any other relevant factors, the price, if any, at which you may be able to sell your Notes prior to maturity may be less than your original purchase price, as any such sale price would not be expected to include the underwriting discount and the hedging costs relating to the Notes. In addition to bid-ask spreads, the value of the Notes determined for any secondary market price is expected to be based on the secondary rate rather than the internal funding rate used to price the Notes and determine the initial estimated value. As a result, the secondary price will be less than if the internal funding rate was used. The Notes are not designed to be short-term trading instruments. Accordingly, you should be able and willing to hold your Notes to maturity.
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·
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The Initial Estimated Value of the Notes Is an Estimate Only, Calculated as of the Time the Terms of the Notes Were Set –The initial estimated value of the Notes is based on the value of our obligation to make the payments on the Notes, together with the mid-market value of the derivative embedded in the terms of the Notes. See “Structuring the Notes” below. Our estimate is based on a variety of assumptions, including our credit spreads, expectations as to dividends, interest rates and volatility, and the expected term of the Notes. These assumptions are based on certain forecasts about future events, which may prove to be incorrect. Other entities may value the Notes or similar securities at a price that is significantly different than we do.
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The value of the Notes at any time after the pricing date will vary based on many factors, including changes in market conditions, and cannot be predicted with accuracy. As a result, the actual value you would receive if you sold the Notes in any secondary market, if any, should be expected to differ materially from the initial estimated value of your Notes.
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·
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An Investment in the Notes Is Subject to Risks Relating to Non-U.S. Securities Markets -- Because foreign companies or foreign equity securities included in the Reference Asset are publicly traded in the applicable foreign countries and are denominated in currencies other than U.S. dollars, an investment in the Notes involves particular risks. For example, the non-U.S. securities markets may be more volatile than the U.S. securities markets, and market developments may affect these markets differently from the U.S. or other securities markets. Direct or indirect government intervention to stabilize the securities markets outside the U.S., as well as cross-shareholdings in certain companies, may affect trading prices and trading volumes in those markets. Also, the public availability of information concerning the foreign issuers may vary depending on their home jurisdiction and the reporting requirements imposed by their respective regulators. In addition, the foreign issuers may be subject to accounting, auditing and financial reporting standards and requirements that differ from those applicable to U.S. reporting companies.
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The securities included in the Reference Asset are issued by companies located within the Eurozone, which is and has been undergoing severe financial stress, and the political, legal and regulatory ramifications are impossible to predict. Changes within the Eurozone could have a material adverse effect on the performance of the Reference Asset and, consequently, on the value of the Notes.
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·
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Market Disruption Events and Adjustments – The payment at maturity and the valuation date are subject to adjustment as described in the product prospectus supplement. For a description of what constitutes a market disruption event as well as the consequences of that market disruption event, see “General Terms of the Notes—Market Disruption Events” in the product prospectus supplement.
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Buffered Bullish Enhanced Return Notes
Linked to the EURO STOXX 50® Index,
Due February 3, 2020
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Reference Asset =
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Free float market capitalization of the Reference Asset
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x 1,000
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Adjusted base date market capitalization of the Reference Asset
|
Buffered Bullish Enhanced Return Notes
Linked to the EURO STOXX 50® Index,
Due February 3, 2020
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·
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sponsor, endorse, sell, or promote the Notes;
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recommend that any person invest in the Notes offered hereby or any other securities;
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have any responsibility or liability for or make any decisions about the timing, amount, or pricing of the Notes;
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·
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have any responsibility or liability for the administration, management, or marketing of the Notes; or
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consider the needs of the Notes or the holders of the Notes in determining, composing, or calculating the Reference Asset, or have any obligation to do so.
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STOXX does not make any warranty, express or implied, and disclaims any and all warranty concerning:
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the results to be obtained by the Notes, the holders of the Notes or any other person in connection with the use of the Reference Asset and the data included in the Reference Asset;
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·
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the accuracy or completeness of the Reference Asset and its data;
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the merchantability and the fitness for a particular purpose or use of the Reference Asset and its data;
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STOXX will have no liability for any errors, omissions, or interruptions in the Reference Asset or its data; and
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Under no circumstances will STOXX be liable for any lost profits or indirect, punitive, special, or consequential damages or losses, even if STOXX knows that they might occur.
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Buffered Bullish Enhanced Return Notes
Linked to the EURO STOXX 50® Index,
Due February 3, 2020
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Period-
Start Date
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Period-
End Date
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High Intra-Day Level
of the Reference Asset
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Low Intra-Day Level
of the Reference Asset
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Period-End Closing Level
of the Reference Asset
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1/1/2011
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3/31/2011
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3,077.24
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2,717.74
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2,910.91
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4/1/2011
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6/30/2011
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3,029.68
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2,692.95
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2,848.53
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7/1/2011
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9/30/2011
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2,887.30
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1,935.89
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2,179.66
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10/1/2011
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12/31/2011
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2,506.22
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2,054.98
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2,316.55
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1/01/2012
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3/31/2012
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2,611.42
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2,279.73
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2,477.28
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4/1/2012
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6/30/2012
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2,509.93
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2,050.16
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2,264.72
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7/1/2012
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9/30/2012
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2,604.77
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2,142.46
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2,454.26
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10/1/2012
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12/31/2012
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2,668.23
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2,427.32
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2,635.93
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1/1/2013
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3/31/2013
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2,754.80
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2,563.64
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2,624.02
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4/1/2013
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6/30/2013
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2,851.48
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2,494.54
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2,622.62
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7/1/2013
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9/30/2013
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2,955.47
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2,539.15
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2,893.15
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10/1/2013
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12/31/2013
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3,116.23
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2,891.39
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3,109.00
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1/1/2014
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3/31/2014
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3,185.68
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2,944.13
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3,161.60
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4/1/2014
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6/30/2014
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3,325.50
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3,083.43
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3,228.24
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7/1/2014
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9/30/2014
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3,301.15
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2,977.52
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3,225.93
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10/1/2014
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12/31/2014
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3,278.97
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2,789.63
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3,146.43
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1/1/2015
|
1/29/2015
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3,417.46
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2,998.53
|
3,371.83
|
Buffered Bullish Enhanced Return Notes
Linked to the EURO STOXX 50® Index,
Due February 3, 2020
|
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Buffered Bullish Enhanced Return Notes
Linked to the EURO STOXX 50® Index,
Due February 3, 2020
|
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1 Year Royal Bank of Canada Chart |
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