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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 | |
---|---|---|---|---|---|---|---|---|
0.65 | 0.67% | 97.48 | 98.29 | 96.52 | 96.98 | 534,757 | 01:00:00 |
PRICING SUPPLEMENT
Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-203433
Dated June 26, 2015
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Investment Description
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Airbag Phoenix Autocallable Optimization Securities (the “Securities”) are unsecured and unsubordinated debt securities issued by Royal Bank of Canada linked to the performance of a specific company (the “Reference Stock”). The issue price of each Security is $1,000. Royal Bank of Canada will pay you a monthly coupon payment if the closing price of the Reference Stock on the applicable Coupon Observation Date (including the final valuation date) is equal to or greater than the coupon barrier. Otherwise, no contingent coupon will be paid for that month. If the closing price of the Reference Stock on any quarterly Autocall Observation Date is greater than or equal to the initial price, Royal Bank of Canada will automatically call the Securities and pay you the principal amount per Security plus the applicable contingent coupon payment for that date and no further amounts will be owed to you. If the Securities are not automatically called, Royal Bank of Canada will pay you on the maturity date either the principal amount per Security or, if the closing price of the Reference Stock on the final valuation date is below the conversion price, Royal Bank of Canada will deliver to you for each of your Securities a number of shares of the applicable Reference Stock equal to the principal amount per Security divided by the conversion price (the “share delivery amount”) (subject to adjustments in the case of certain corporate events described in the product prospectus supplement no. ABYON-2 under “General Terms of the Notes — Anti-dilution Adjustments”). Regardless of whether Royal Bank of Canada pays your principal or delivers the share delivery amount at maturity, the final contingent coupon will be payable at maturity if the closing price of the Reference Stock is at or above the coupon barrier on the final valuation date.
Investing in the Securities involves significant risks. You may lose some or all of your principal amount. In exchange for potentially receiving a contingent coupon on the Securities, you are accepting the risk of receiving shares of the Reference Stock at maturity that are worth less than the principal amount of your Securities and the credit risk of Royal Bank of Canada for all payments under the Securities. Generally, the higher the contingent coupon rate on a Security, the greater the risk of loss on that Security. The contingent repayment of principal only applies if you hold the Securities until maturity. Any payment on the Securities, including any repayment of principal, is subject to the creditworthiness of Royal Bank of Canada. If Royal Bank of Canada were to default on its payment obligations, you may not receive any amounts owed to you under the Securities and you could lose your entire investment. The Securities will not be listed on any securities exchange.
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Features
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Key Dates
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£ Contingent Coupon — Royal Bank of Canada will pay a monthly contingent coupon payment if the closing price of the Reference Stock on the applicable Coupon Observation Date (including the final valuation date) is equal to or greater than the coupon barrier. Otherwise, no coupon will be paid for the month.
£ Automatically Callable — If the price of the Reference Stock on any quarterly Autocall Observation Date is greater than or equal to the initial price, we will automatically call the Securities and pay you the principal amount per Security plus the applicable contingent coupon payment for that date and no further amounts will be owed to you. If the Securities are not called, you may have downside market exposure to the Reference Stock at maturity.
£ Contingent Repayment of Principal at Maturity — If the Securities are not previously called and the price of the Reference Stock does not close below the conversion price on the final valuation date, Royal Bank of Canada will pay you the principal amount at maturity, and you will not participate in any appreciation or depreciation in the value of the Reference Stock. If the price of the Reference Stock closes below the conversion price on the final valuation date, Royal Bank of Canada will deliver to you at maturity the share delivery amount for each of your Securities, which is expected to be worth less than your principal amount and may have no value at all. The contingent repayment of principal only applies if you hold the Securities until maturity. Any payment on the Securities, including any repayment of principal, is subject to the creditworthiness of Royal Bank of Canada.
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Trade Date June 26, 2015
Settlement Date June 30, 2015
Coupon Observation Dates1 Monthly
Autocall Observation Dates1 Quarterly
Final Valuation Date1 December 23, 2016
Maturity Date1 December 30, 2016
1 Subject to postponement in the event of a market disruption event and as described under “General Terms of the Notes — Payment at Maturity” in the accompanying product prospectus supplement no. ABYON-2.
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NOTICE TO INVESTORS: THE SECURITIES ARE SIGNIFICANTLY RISKIER THAN CONVENTIONAL DEBT INSTRUMENTS. THE ISSUER IS NOT NECESSARILY OBLIGATED TO REPAY THE FULL PRINCIPAL AMOUNT OF THE SECURITIES AT MATURITY, AND THE SECURITIES CAN HAVE THE FULL DOWNSIDE MARKET RISK OF THE REFERENCE STOCK. THIS MARKET RISK IS IN ADDITION TO THE CREDIT RISK INHERENT IN PURCHASING A DEBT OBLIGATION OF ROYAL BANK OF CANADA. YOU SHOULD NOT PURCHASE THE SECURITIES IF YOU DO NOT UNDERSTAND OR ARE NOT COMFORTABLE WITH THE SIGNIFICANT RISKS INVOLVED IN INVESTING IN THE SECURITIES.
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED UNDER “KEY RISKS” BEGINNING ON PAGE 6, THE RISKS DESCRIBED UNDER “RISK FACTORS” BEGINNING ON PAGE PS-4 OF THE PRODUCT PROSPECTUS SUPPLEMENT NO. ABYON-2 AND UNDER “RISK FACTORS” BEGINNING ON PAGE S-1 OF THE PROSPECTUS SUPPLEMENT BEFORE PURCHASING ANY SECURITIES. EVENTS RELATING TO ANY OF THOSE RISKS, OR OTHER RISKS AND UNCERTAINTIES, COULD ADVERSELY AFFECT THE MARKET VALUE OF, AND THE RETURN ON, YOUR SECURITIES. IF THE SECURITIES ARE NOT CALLED, YOU MAY LOSE SOME OR ALL OF YOUR INITIAL INVESTMENT.
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Securities Offerings
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This pricing supplement relates to three separate Airbag Phoenix Autocallable Optimization Securities we are offering. Each of the Securities is linked to the common stock of a different company, and each of the Securities has a different contingent coupon rate, initial price, coupon barrier and conversion price, as specified in the table below. Each of the Securities will be issued in minimum denominations of $1,000.00 per Security and integral multiples of $1,000.00 in excess thereof.
The performance of each Security will not depend on the performance of any other Security.
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Reference Stock
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Coupon Rate
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Initial Price
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Coupon Barrier
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Conversion Price
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CUSIP
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ISIN
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Common Stock of Akamai Technologies, Inc. (AKAM)
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7.90% per annum
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$71.13
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$56.90, which is 80.00% of the initial price*
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$62.59, which is 88.00% of the initial price*
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78013D334
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US78013D3347
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Common Stock of EOG Resources, Inc. (EOG)
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7.80% per annum
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$88.06
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$70.45, which is 80.00% of the initial price*
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$79.25, which is 90.00% of the initial price*
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78013D342
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US78013D3420
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Common Stock of Monster Beverage Corporation (MNST)
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7.80% per annum
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$139.41
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$111.53, which is 80.00% of the initial price*
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$125.47, which is 90.00% of the initial price*
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78013D359
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US78013D3594
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Price to Public
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Fees and Commissions (1)
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Proceeds to Us
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Offering of the Securities
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Total
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Per Security
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Total
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Per Security
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Total
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Per Security
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Common Stock of Akamai Technologies, Inc. (AKAM)
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$1,679,000
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$1,000.00
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$25,185
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$15.00
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$1,653,815
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$985.00
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Common Stock of EOG Resources, Inc. (EOG)
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$655,000
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$1,000.00
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$9,825
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$15.00
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$645,175
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$985.00
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Common Stock of Monster Beverage Corporation (MNST)
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$805,000
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$1,000.00
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$12,075
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$15.00
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$792,925
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$985.00
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UBS Financial Services Inc.
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RBC Capital Markets, LLC
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Additional Information About Royal Bank of Canada and the Securities
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¨
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Product prospectus supplement no. ABYON-2 dated May 18, 2015:
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¨
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Prospectus supplement dated April 30, 2015:
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¨
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Prospectus dated April 30, 2015:
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Investor Suitability
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The Securities may be suitable for you if, among other considerations:
¨ You fully understand the risks inherent in an investment in the Securities, including the risk of loss of your entire initial investment.
¨ You can tolerate a loss of all or a substantial portion of your investment and are willing to make an investment that may have the full downside market risk of an investment in the Reference Stock.
¨ You are willing to accept the risks of investing in equities in general and in the applicable Reference Stock in particular.
¨ You believe the final price of the Reference Stock is not likely to be below the conversion price and, if it is, you can tolerate receiving shares of the Reference Stock at maturity worth less than your principal amount or that may have no value at all.
¨ You believe the closing price of the Reference Stock will be equal to or greater than the coupon barrier on the specified Coupon Observation Dates (including the final valuation date)
¨ You understand and accept that you will not participate in any appreciation in the price of the Reference Stock and that any potential positive return on the Securities is limited to the applicable contingent coupons paid.
¨ You can tolerate fluctuations in the price of the Securities prior to maturity that may be similar to or exceed the downside price fluctuations of the Reference Stock.
¨ You are willing and able to invest in a security that will be called on any Autocall Observation Date on which the closing price of the Reference Stock is greater than or equal to the initial price, and you are otherwise able to hold the Securities to maturity.
¨ You are willing to invest in Securities for which there may be little or no secondary market and you accept that the secondary market will depend in large part on the price, if any, at which RBC Capital Markets, LLC, which we refer to as “RBCCM,” is willing to purchase the Securities.
¨ You are willing to invest in the Securities based on the applicable contingent coupon rate specified on the cover page of this pricing supplement.
¨ You do not seek guaranteed current income from this investment and are willing to forgo dividends paid on the Reference Stock
¨ You are willing to assume the credit risk of Royal Bank of Canada for all payments under the Securities, and understand that if Royal Bank of Canada defaults on its obligations, you may not receive any amounts due to you, including any repayment of principal.
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The Securities may not be suitable for you if, among other considerations:
¨ You do not fully understand the risks inherent in an investment in the Securities, including the risk of loss of your entire initial investment.
¨ You require an investment designed to provide a full return of principal at maturity.
¨ You are unwilling to accept the risks of investing in equities in general or in the applicable Reference Stock in particular.
¨ You are not willing to make an investment that may have the full downside market risk of an investment in the Reference Stock.
¨ You believe that the final price of the Reference Stock is likely to be below the conversion price, which could result in a total loss of your initial investment.
¨ You cannot tolerate receiving shares of the Reference Stock at maturity worth less than your principal amount or that may have no value at all.
¨ You believe that the price of the Reference Stock will decline during the term of the Securities and is likely to close below the coupon barrier on the specified Coupon Observation Dates and below the conversion price on the final valuation date.
¨ You seek an investment that participates in the appreciation in the price of the Reference Stock or that has unlimited return potential.
¨ You cannot tolerate fluctuations in the price of the Securities prior to maturity that may be similar to or exceed the downside price fluctuations of the Reference Stock.
¨ You are unwilling to invest in the Securities based on the applicable contingent coupon rate specified on the cover page of this pricing supplement.
¨ You seek an investment for which there will be an active secondary market.
¨ You are unable or unwilling to invest in a security that will be called on any Autocall Observation Date on which the closing price of the Reference Stock is greater than or equal to the initial price, or you are otherwise unable or unwilling to hold the Securities to maturity.
¨ You seek guaranteed current income from this investment and are unwilling to forgo dividends paid on the Reference Stock.
¨ You are not willing to assume the credit risk of Royal Bank of Canada for all payments under the Securities, including any repayment of principal.
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Final Terms of the Securities1
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Issuer:
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Royal Bank of Canada
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Issue Price per Security:
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$1,000 per Security
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Principal Amount per Security:
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$1,000 per Security
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Term:
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18 months, if not previously called
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Reference Stock:
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The common stock of a specific company, as set forth on the cover page of this pricing supplement.
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Closing Price:
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On any trading day, the last reported sale price of the Reference Stock on the principal national securities exchange on which it is listed for trading, as determined by the calculation agent.
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Initial Price:
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With respect to each Security, the closing price of the applicable Reference Stock on the trade date, as set forth on the cover page of this pricing supplement.
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Final Price:
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The closing price of the applicable Reference Stock on the final valuation date.
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Automatic Call Feature:
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The Securities will be automatically called if the closing price of the Reference Stock on any Autocall Observation Date is greater than or equal to the initial price.
If the Securities are called, Royal Bank of Canada will pay you on the corresponding contingent coupon payment date (which will be the “Call Settlement Date”) a cash payment per Security equal to the principal amount per Security plus the applicable contingent coupon payment otherwise due on that day (the “call settlement amount”). No further amounts will be owed to you under the Securities.
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Contingent Coupon:
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If the closing price of the Reference Stock is equal to or greater than the coupon barrier on any Coupon Observation Date, Royal Bank of Canada will pay you the contingent coupon applicable to that Coupon Observation Date.
If the closing price of the Reference Stock is less than the coupon barrier on any Coupon Observation Date, the contingent coupon applicable to that Coupon Observation Date will not accrue or be payable and Royal Bank of Canada will not make any payment to you on the relevant contingent coupon payment date.
The contingent coupon will be a fixed amount based upon equal monthly installments at the contingent coupon rate, which is a per annum rate. The table below sets forth the corresponding contingent coupon for each Security.
The table below reflects the contingent coupon rate of (i) 7.90% per annum for the Securities linked to the common stock of Akamai Technologies, Inc., (ii) 7.80% per annum for the Securities linked to the common stock of EOG Resources, Inc. and (iii) 7.80% per annum for the Securities linked to the common stock of Monster Beverage Corporation.
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Coupon
Observation
Dates*
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Contingent
Coupon
Payment
Dates
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Akamai
Technologies,
Inc.
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EOG
Resources,
Inc.
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Monster
Beverage
Corporation
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July 27, 2015
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July 29, 2015
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$6.5833
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$6.5000
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$6.5000
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August 26, 2015
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August 28, 2015
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$6.5833
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$6.5000
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$6.5000
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September 28, 2015*
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September 30, 2015
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$6.5833
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$6.5000
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$6.5000
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October 26, 2015
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October 28, 2015
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$6.5833
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$6.5000
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$6.5000
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November 25, 2015
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November 30, 2015
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$6.5833
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$6.5000
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$6.5000
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December 28, 2015*
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December 30, 2015
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$6.5833
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$6.5000
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$6.5000
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January 26, 2016
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January 30, 2016
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$6.5833
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$6.5000
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$6.5000
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February 25, 2016
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February 29, 2016
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$6.5833
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$6.5000
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$6.5000
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March 28, 2016*
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March 30, 2016
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$6.5833
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$6.5000
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$6.5000
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April 26, 2016
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April 28, 2016
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$6.5833
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$6.5000
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$6.5000
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May 26, 2016
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May 31, 2016
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$6.5833
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$6.5000
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$6.5000
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June 27, 2016*
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June 29, 2016
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$6.5833
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$6.5000
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$6.5000
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July 26, 2016
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July 28, 2016
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$6.5833
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$6.5000
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$6.5000
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August 26, 2016
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August 30, 2016
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$6.5833
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$6.5000
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$6.5000
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September 26, 2016*
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September 28, 2016
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$6.5833
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$6.5000
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$6.5000
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October 26, 2016
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October 28, 2016
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$6.5833
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$6.5000
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$6.5000
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November 28, 2016
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November 30, 2016
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$6.5833
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$6.5000
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$6.5000
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December 23, 2016*
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December 30, 2016
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$6.5833
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$6.5000
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$6.5000
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Contingent Coupon Rate:
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The contingent coupon rate is (i) 7.90% per annum for the Securities linked to the common stock of Akamai Technologies, Inc., (ii) 7.80% per annum for the Securities linked to the common stock of EOG Resources, Inc. and (iii) 7.80% per annum for the Securities linked to the common stock of Monster Beverage Corporation.
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Coupon Barrier:
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A percentage of the initial price of the Reference Stock, as specified on the cover page of this pricing supplement (as may be adjusted in the case of certain adjustment events as described under “General Terms of the Notes — Anti-dilution Adjustments” in the product prospectus supplement).
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Terms used in this pricing supplement, but not defined herein, shall have the meanings ascribed to them in the product prospectus supplement. |
Payment at Maturity:
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Ø If the Securities are not automatically called prior to maturity, and the final price of the applicable Reference Stock is not below the conversion price and coupon barrier on the final valuation date, we will pay you at maturity an amount in cash equal to $1,000 for each $1,000 principal amount of the Securities, plus the final contingent coupon.
Ø If the Securities are not automatically called prior to maturity, and the final price of the applicable Reference Stock is below the conversion price and at or above the coupon barrier on the final valuation date, we will deliver to you at maturity a number of shares of the applicable Reference Stock equal to the share delivery amount (subject to adjustments) for each Security you own plus the final contingent coupon.
Ø If the Securities are not automatically called prior to maturity, and the final price of the applicable Reference Stock is below the conversion price and below the coupon barrier on the final valuation date, we will deliver to you at maturity a number of shares of the applicable Reference Stock equal to the share delivery amount (subject to adjustments) for each Security you own, and no final contingent coupon will be paid. The share delivery amount, if applicable, is expected to be worth less than the principal amount and may have a value equal to $0.
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Share Delivery Amount:2
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For Notes linked to the common stock of Akamai Technologies, Inc.: 15.9770 shares per Security
For Notes linked to the common stock of EOG Resources, Inc.: 12.6183 shares per Security
For Notes linked to the common stock of Monster Beverage Corporation: 7.9700 shares per Security
Each of which is the number of shares of the applicable Reference Stock equal to the principal amount of $1,000 per Security divided by the applicable conversion price. The share delivery amount for each Security is subject to adjustment upon the occurrence of certain corporate events affecting the Reference Stock. See “General Terms of the Notes — Anti-dilution Adjustments” in product prospectus supplement no. ABYON-2.
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Conversion Price:
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A percentage of the initial price of the Reference Stock, as specified on the cover page of this pricing supplement (as may be adjusted in the case of certain adjustment events as described under “General Terms of the Notes — Anti-dilution Adjustments” in the product prospectus supplement).
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Investment Timeline
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Trade
Date:
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The closing price of the applicable Reference Stock (initial price) was observed, the applicable conversion price, coupon barrier and share delivery amount were determined. The contingent coupon rate was set.
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Monthly
(including at
Maturity):
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If the closing price of the Reference Stock is equal to or greater than the coupon barrier on any Coupon Observation Date, Royal Bank of Canada will pay the applicable contingent coupon payment on the applicable contingent coupon payment date.
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Quarterly:
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The Securities will be automatically called if the closing price of the applicable Reference Stock on any Autocall Observation Date is greater than or equal to the initial price. If the Securities are called, Royal Bank of Canada will pay you on the applicable Call Settlement Date a cash payment per Security equal to the principal amount of the Securities plus the applicable contingent coupon payment otherwise due on that day and no further amounts will be due to you under the Securities.
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Maturity Date:
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The final price of the Reference Stock is observed on the final valuation date.
If the Securities have not been previously called, the final price is determined as of the final valuation date.
If the final price of the applicable Reference Stock is not below the conversion price and the coupon barrier on the final valuation date, we will pay you an amount in cash equal to $1,000 for each $1,000 principal amount of the Securities plus the final contingent coupon.
If the final price of the applicable Reference Stock is below the conversion price and at or above the coupon barrier on the final valuation date, we will deliver to you a number of shares of the applicable Reference Stock equal to the share delivery amount for each Security you own plus the final contingent coupon.
If the final price of the applicable Reference Stock is below the conversion price and the coupon barrier on the final valuation date, we will deliver to you a number of shares of the applicable Reference Stock equal to the share delivery amount for each Security you own, and no final contingent coupon will be paid.2
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2
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If you receive the share delivery amount at maturity, we will pay cash in lieu of delivering any fractional shares in an amount equal to that fraction multiplied by the closing price of the Reference Stock on the final valuation date.
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Key Risks
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An investment in the Securities involves significant risks. Investing in the Securities is not equivalent to investing directly in the Reference Stock. These risks are explained in more detail in the “Risk Factors” section of the accompanying product prospectus supplement no. ABYON-2. We also urge you to consult your investment, legal, tax, accounting and other advisors before investing in the Securities.
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¨
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Your Investment in the Securities May Result in a Loss – The Securities differ from ordinary debt securities in that Royal Bank of Canada will not necessarily pay the full principal amount of the Securities at maturity. At maturity, if the Securities have not been previously called, Royal Bank of Canada will only pay you the principal amount of your Securities if the final price of the Reference Stock is greater than or equal to the conversion price. If the final price of the Reference Stock is below the conversion price, Royal Bank of Canada will deliver to you a number of shares of the applicable Reference Stock equal to the share delivery amount for each Security you then own. Therefore, if the Securities are not automatically called and the final price of the Reference Stock is below the conversion price, you will be exposed to any such decline below the conversion price at a higher percentage than the Reference Stock’s decline below the conversion price, as measured from the initial price. Because the conversion price is less than the initial price and the final price is less than the conversion price, you will lose more than 1% of your principal amount at maturity for each additional 1% that the final price is less than the conversion price. If you receive shares of the applicable Reference Stock at maturity, the value of those shares is expected to be less than the principal amount of the Securities or may have no value at all. In that case, you will be exposed to any further depreciation of the applicable Reference Stock between the final valuation date and the maturity date.
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¨
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The Contingent Coupon Rate Per Annum Payable on the Securities Will Reflect in Part the Volatility of the Reference Stock, and May Not Be Sufficient to Compensate You for the Risk of Loss at Maturity – “Volatility” refers to the frequency and magnitude of changes in the price of the Reference Stock. The greater the volatility of the Reference Stock, the more likely it is that the price of that stock could close below its conversion price on the final valuation date, which would result in the loss of some or all of your principal. This risk will generally be reflected in a higher contingent coupon rate per annum payable on the Securities than the interest rate payable on our conventional debt securities with a comparable term. However, while the contingent coupon rate per annum is a fixed amount, the Reference Stocks’ volatility can change significantly over the term of the Securities, and may increase. The price of the Reference Stock could fall sharply as of the final valuation date, which could result in a significant loss of principal.
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¨
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The Contingent Repayment of Principal Applies Only at Maturity – If the Securities are not automatically called, you should be willing to hold your Securities to maturity. If you are able to sell your Securities prior to maturity in the secondary market, if any, you may have to do so at a loss relative to your initial investment, even if the price of the Reference Stock is above the conversion price.
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¨
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Reinvestment Risk – If your Securities are automatically called prior to the maturity date, no further payments will be owed to you under the Securities. Therefore, because the Securities could be called as early as the first Autocall Observation Date, the holding period over which you would receive any applicable contingent coupon, which is based on the relevant contingent coupon rate as specified on the cover page, could be as little as three months. There is no guarantee that you would be able to reinvest the proceeds from an investment in the Securities at a comparable return for a similar level of risk in the event the Securities are automatically called prior to the maturity date.
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¨
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An Investment in the Securities Is Subject to the Credit Risk of Royal Bank of Canada – The Securities are unsubordinated, unsecured debt obligations of Royal Bank of Canada and are not, either directly or indirectly, an obligation of any third party. Any payments to be made on the Securities, including payments in respect of an automatic call, contingent coupon payments and any repayment of principal provided at maturity, depends on the ability of Royal Bank of Canada to satisfy its obligations as they come due. As a result, the actual and perceived creditworthiness of Royal Bank of Canada may affect the market value of the Securities and, in the event Royal Bank of Canada were to default on its obligations, you may not receive any amounts owed to you under the terms of the Securities and you could lose your entire investment.
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¨
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The Call Feature and the Contingent Coupon Feature Limit Your Potential Return – The return potential of the Securities is limited to the pre-specified contingent coupon rate, regardless of the appreciation of the Reference Stock. Accordingly, if the Securities are called prior to maturity, you will not participate in the applicable Reference Stock’s appreciation, and your return will be limited to the principal amount plus any contingent coupons paid up to and including the Call Settlement Date. In addition, the total return on the Securities will vary based on the number of Coupon Observation Dates on which the contingent coupon becomes payable prior to maturity or an automatic call. Further, if the Securities are called due to the automatic call feature, you will not receive any contingent coupons or any other payment in respect of any Coupon Observation Dates after the applicable Call Settlement Date. Since the Securities could be called as early as the first Autocall Observation Date, the total return on the Securities could be minimal. If the Securities are not called, you may be subject to the full downside performance of the Reference Stock even though your potential return is limited to the contingent coupon rate as we may deliver to you at maturity for each Security you own shares of the Reference Stock, which are expected to be worth less than the principal amount as of the maturity date. As a result, the return on an investment in the Securities could be less than the return on a direct investment in the Reference Stock or on a similar security that allows you to participate in the appreciation of the price of the Reference Stock.
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¨
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You May Not Receive any Contingent Coupons – Royal Bank of Canada will not necessarily make periodic contingent coupon payments on the Securities. If the closing price of the Reference Stock on a Coupon Observation Date is less than the coupon barrier, Royal Bank of Canada will not pay you the contingent coupon applicable to that Coupon Observation Date. If the closing price of the Reference Stock is less than the coupon barrier on each of the Coupon Observation Dates, Royal Bank of Canada will not pay you any contingent coupons during the term of, and you will not receive a positive return on, your Securities. Generally, this non-payment of the contingent coupon coincides with a period of greater risk of principal loss on your Securities. Accordingly, if we do not pay the contingent coupon on the maturity date, you will incur a loss of principal, because the final price will be less than the applicable conversion price. In addition, regardless of whether Royal Bank of Canada pays your principal or delivers the share delivery amount at maturity, the final contingent coupon will be payable at maturity only if the closing price of the Reference Stock is at or above the coupon barrier on the final valuation date.
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¨
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An Investment in the Securities Is Subject to Single Stock Risk – The price of the Reference Stock can rise or fall sharply due to factors specific to that Reference Stock and its issuer, such as stock price volatility, earnings, financial conditions, corporate, industry and regulatory developments, management changes and decisions and other events, as well as general market factors, such as general stock market volatility and levels, interest rates and economic and political conditions. You, as an investor in the Securities, should make your own investigation into the respective Reference Stock issuer and the Reference Stock for your Securities. For additional information about each Reference Stock and their respective issuers, please see "Information about the Reference Stocks" in this pricing supplement and the respective Reference Stock issuer's SEC filings referred to in those sections. We urge you to review financial and other information filed periodically by the applicable Reference Stock issuer with the SEC.
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¨
|
Owning the Securities Is Not the Same as Owning the Reference Stock – The return on your Securities may not reflect the return you would realize if you actually owned the Reference Stock. For instance, you will not receive or be entitled to receive any dividend payments or other distributions over the term of the Securities. As an owner of the Securities, you will not have voting rights or any other rights that holders of the Reference Stock may have. Further, the Reference Stock may appreciate over the term of the Securities and you will not participate in any such appreciation, which could be significant, even though you may be exposed to the decline of the Reference Stock at maturity.
|
¨
|
There Is No Affiliation Between the Respective Reference Stock Issuers and Us, UBS and Our Respective Affiliates, and We Are Not Responsible for Any Disclosure by Those Issuers - We, UBS and our respective affiliates are not affiliated with any Reference Stock issuer. However, we, UBS and our respective affiliates may currently, or from time to time in the future engage in business with a Reference Stock issuer. Nevertheless, we, UBS and our respective affiliates have not made any independent investigation as to the accuracy or the completeness of any information about the Reference Stocks and the Reference Stock issuers. You, as an investor in the Securities, should make your own investigation into the Reference Stock and the Reference Stock issuer for your Securities. The Reference Stock issuers are not involved in this offering and have no obligation of any sort with respect to your Securities. The Reference Stock issuers have no obligation to take your interests into consideration for any reason, including when taking any corporate actions that might affect the value of your Securities.
|
¨
|
There Can Be No Assurance that the Investment View Implicit in the Securities Will Be Successful – It is impossible to predict whether and the extent to which the price of any Reference Stock will rise or fall. The closing price of each Reference Stock will be influenced by complex and interrelated political, economic, financial and other factors that affect that Reference Stock. You should be willing to accept the downside risks of owning equities in general and the applicable Reference Stock in particular, and the risk of losing some or all of your initial investment.
|
¨
|
Lack of Liquidity – The Securities will not be listed on any securities exchange. RBCCM intends to offer to purchase the Securities in the secondary market, but is not required to do so. Even if there is a secondary market, it may not provide enough liquidity to allow you to trade or sell the Securities easily. Because other dealers are not likely to make a secondary market for the Securities, the price at which you may be able to trade your Securities is likely to depend on the price, if any, at which RBCCM is willing to buy the Securities.
|
¨
|
The Initial Estimated Value of the Securities Is Less than the Price to the Public – The initial estimated value for each of the Securities that is set forth on the cover page of this document, which is less than the public offering price you pay for the Securities, does not represent a minimum price at which we, RBCCM or any of our other affiliates would be willing to purchase the Securities in any secondary market (if any exists) at any time. If you attempt to sell the Securities 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 price of the applicable Reference Stock, 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 our estimated profit and the costs relating to our hedging of the Securities. These factors, together with various credit, market and economic factors over the term of the Securities, are expected to reduce the price at which you may be able to sell the Securities in any secondary market and will affect the value of the Securities 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 Securities prior to maturity may be less than the price to public, as any such sale price would not be expected to include the underwriting discount and our estimated profit and the costs relating to our hedging of the Securities. In addition, any price at which you may sell the Securities is likely to reflect customary bid-ask spreads for similar trades. In addition to bid-ask spreads, the value of the Securities determined for any secondary market price is expected to be based on a secondary market rate rather than the internal borrowing rate used to price the Securities and determine the initial estimated value. As a result, the secondary price will be less than if the internal borrowing rate was used. The Securities are not designed to be short-term trading instruments. Accordingly, you should be able and willing to hold your Securities to maturity.
|
¨
|
Our Initial Estimated Value of the Securities Is an Estimate Only, Calculated as of the Time the Terms of the Securities Were Set – The initial estimated value of each of the Securities is based on the value of our obligation to make the payments on the Securities, together with the mid-market value of the derivative embedded in the terms of the Securities. See “Structuring the Securities” 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 Securities. These assumptions are based on certain forecasts about future events, which may prove to be incorrect. Other entities may value the Securities or similar securities at a price that is significantly different than we do.
|
¨
|
Potential Conflicts – We and our affiliates play a variety of roles in connection with the issuance of the Securities, including hedging our obligations under the Securities. In performing these duties, the economic interests of the calculation agent and other affiliates of ours are potentially adverse to your interests as an investor in the Securities.
|
¨
|
Potentially Inconsistent Research, Opinions or Recommendations by RBCCM, UBS or Their Affiliates – RBCCM, UBS or their affiliates may publish research, express opinions or provide recommendations as to the Reference Stock that are inconsistent with investing in or holding the Securities, and which may be revised at any time. Any such research, opinions or recommendations could affect the value of the Reference Stock, and therefore the market value of the Securities.
|
¨
|
Uncertain Tax Treatment – Significant aspects of the tax treatment of an investment in the Securities are uncertain. You should consult your tax adviser about your tax situation.
|
¨
|
Potential Royal Bank of Canada and UBS Impact on Price – Trading or transactions by Royal Bank of Canada, UBS and our respective affiliates in the Reference Stock, or in futures, options, exchange-traded funds or other derivative products on the Reference Stock may adversely affect the market value of the Reference Stock, the closing price of the Reference Stock, and, therefore, the market value of the Securities.
|
¨
|
Many Economic and Market Factors Will Impact the Value of the Securities – In addition to the closing price of the Reference Stock on any trading day, the value of the Securities will be affected by a number of economic and market factors that may either offset or magnify each other, including:
|
|
¨
|
the actual and expected volatility of the price of the Reference Stock;
|
|
¨
|
the time remaining to maturity of the Securities;
|
|
¨
|
the dividend rate on the Reference Stock;
|
|
¨
|
interest and yield rates in the market generally;
|
|
¨
|
a variety of economic, financial, political, regulatory or judicial events;
|
|
¨
|
the occurrence of certain events to the Reference Stock that may or may not require an adjustment to the terms of the Securities; and
|
|
¨
|
our creditworthiness, including actual or anticipated downgrades in our credit ratings.
|
¨
|
The Anti-Dilution Protection for the Reference Stock Is Limited – The calculation agent will make adjustments to the initial price, the coupon barrier and the conversion price for certain events affecting the shares of the Reference Stock. However, the calculation agent will not be required to make an adjustment in response to all events that could affect the Reference Stock. If an event occurs that does not require the calculation agent to make an adjustment, the value of the Securities may be materially and adversely affected.
|
Hypothetical Examples
|
Principal Amount:
|
$1,000
|
Term:
|
Approximately 18 months
|
Coupon Observation Dates:
|
Monthly
|
Autocall Observation Dates
|
Quarterly
|
Hypothetical initial price of the Reference Stock*:
|
$10.00 per share
|
Hypothetical coupon barrier*:
|
$7.00 (which is 70.00% of the hypothetical initial price)
|
Hypothetical conversion price*:
|
$8.00 (which is 80.00% of the hypothetical initial price)
|
Hypothetical share delivery amount
|
125 shares per Security ($1,000 / conversion price of $8.00)
|
Hypothetical contingent coupon rate per annum**:
|
8.00% ($6.67 per month)
|
Hypothetical dividend yield on the Reference Stock***:
|
2.25% over the term of the Securities (1.50% per annum).
|
Date
|
Closing Price
|
Payment (per Security)
|
||
First and Second Coupon Observation Date
|
$12.00 (at or above coupon barrier)
|
$13.34 (contingent coupons)
|
||
First Autocall Observation Date / Third Coupon Observation Date
|
$12.00 (at or above coupon barrier; at or above initial price)
|
$1,006.67 (call settlement amount)
|
||
Total Payment:
|
$1,020.00 (2.00% return)
|
Date
|
Closing Price
|
Payment (per Security)
|
||
First and Second Coupon Observation Date
|
$9.00 (at or above coupon barrier)
|
$13.34 (contingent coupons)
|
||
First Autocall Observation Date / Third Coupon Observation Date
|
$9.00 (at or above coupon barrier; below initial price)
|
$6.67 (contingent coupon)
|
||
Fourth and Fifth Coupon Observation Date
|
$6.50 (below coupon barrier)
|
$0.00
|
||
Second Autocall Observation Date / Sixth Coupon Observation Date
|
$6.50 (below coupon barrier)
|
$0.00
|
||
Seventh and Eighth Coupon Observation Date
|
$11.00 (at or above coupon barrier)
|
$13.34 (contingent coupons)
|
||
Third Autocall Observation Date / Ninth Coupon Observation Date
|
$17.00 (at or above coupon barrier; at or above initial price)
|
$1,006.67 (call settlement amount)
|
||
Total Payment:
|
$1,040.02 (4.00% return)
|
Date
|
Closing Price
|
Payment (per Security)
|
||
First and Second Coupon Observation Date
|
$8.50 (at or above coupon barrier)
|
$13.34 (contingent coupons)
|
||
First Autocall Observation Date / Third Coupon Observation Date
|
$8.50 (at or above coupon barrier; below initial price)
|
$6.67 (contingent coupon)
|
||
Fourth and Fifth Coupon Observation Date
|
$6.00 (below coupon barrier)
|
$0.00
|
||
Second Autocall Observation Date / Sixth Coupon Observation Date
|
$6.00 (below coupon barrier)
|
$0.00
|
||
Seventh and Eighth Coupon Observation Date
|
$6.25 (below coupon barrier)
|
$0.00
|
||
Third Autocall Observation Date / Ninth Coupon Observation Date
|
$6.25 (below coupon barrier)
|
$0.00
|
||
Tenth and Eleventh Coupon Observation Date
|
$6.75 (below coupon barrier)
|
$0.00
|
||
Fourth Autocall Observation Date / Twelfth Coupon Observation Date
|
$6.75 (below coupon barrier)
|
$0.00
|
||
Thirteenth and Fourteenth Coupon Observation Date
|
$8.75 (at or above coupon barrier)
|
$13.34 (contingent coupons)
|
||
Fifth Autocall Observation Date / Fifteenth Coupon Observation Date
|
$8.75 (at or above coupon barrier; below initial price)
|
$6.67 (contingent coupon)
|
||
Sixteenth and Seventeenth Coupon Observation Date
|
$9.50 (at or above coupon barrier)
|
$13.34 (contingent coupons)
|
||
Final Autocall and Coupon Observation Date
|
$9.25 (at or above conversion price and coupon barrier)
|
$1,006.67 (Payment at Maturity)
|
||
Total Payment:
|
$1,060.03 (6.00% return)
|
Date
|
Closing Price
|
Payment (per Security)
|
||
First and Second Coupon Observation Date
|
$9.25 (at or above coupon barrier)
|
$13.34 (contingent coupons)
|
||
First Autocall Observation Date / Third Coupon Observation Date
|
$9.25 (at or above coupon barrier; below initial price)
|
$6.67 (contingent coupon)
|
||
Fourth and Fifth Coupon Observation Date
|
$8.25 (at or above coupon barrier)
|
$13.34 (contingent coupons)
|
||
Second Autocall Observation Date / Sixth Coupon Observation Date
|
$8.25 (at or above coupon barrier; below initial price)
|
$6.67 (contingent coupon)
|
||
Seventh and Eighth Coupon Observation Date
|
$7.50 (at or above coupon barrier)
|
$13.34 (contingent coupons)
|
||
Third Autocall Observation Date / Ninth Coupon Observation Date
|
$7.50 (at or above coupon barrier; below initial price)
|
$6.67 (contingent coupon)
|
||
Tenth and Eleventh Coupon Observation Date
|
$5.75 (below coupon barrier)
|
$0.00
|
||
Fourth Autocall Observation Date / Twelfth Coupon Observation Date
|
$5.75 (below coupon barrier)
|
$0.00
|
||
Thirteenth and Fourteenth Coupon Observation Date
|
$5.50 (below coupon barrier)
|
$0.00
|
||
Fifth Autocall Observation Date / Fifteenth Coupon Observation Date
|
$5.50 (below coupon barrier)
|
$0.00
|
||
Sixteenth and Seventeenth Coupon Observation Date
|
$4.00 (below coupon barrier)
|
$0.00
|
||
Final Autocall and Coupon Observation Date
|
$7.25 (below conversion price; at or above coupon barrier)
|
125 shares x $7.25 = $906.25 (value of shares delivered) plus $6.67 (cash contingent coupon payment)
|
||
Total Payment:
|
$972.95 (-2.705% return)
|
Date
|
Closing Price
|
Payment (per Security)
|
||
First and Second Coupon Observation Date
|
$9.25 (at or above coupon barrier)
|
$13.34 (contingent coupons)
|
||
First Autocall Observation Date / Third Coupon Observation Date
|
$9.25 (at or above coupon barrier; below initial price)
|
$6.67 (contingent coupon)
|
||
Fourth and Fifth Coupon Observation Date
|
$8.25 (at or above coupon barrier)
|
$13.34 (contingent coupons)
|
||
Second Autocall Observation Date / Sixth Coupon Observation Date
|
$8.25 (at or above coupon barrier; below initial price)
|
$6.67 (contingent coupon)
|
||
Seventh and Eighth Coupon Observation Date
|
$7.50 (at or above coupon barrier)
|
$13.34 (contingent coupons)
|
||
Third Autocall Observation Date / Ninth Coupon Observation Date
|
$7.50 (at or above coupon barrier; below initial price)
|
$6.67 (contingent coupon)
|
||
Tenth and Eleventh Coupon Observation Date
|
$7.25 (at or above coupon barrier)
|
$13.34 (contingent coupons)
|
||
Fourth Autocall Observation Date / Twelfth Coupon Observation Date
|
$7.25 (at or above coupon barrier; below the initial price)
|
$6.67 (contingent coupon)
|
||
Thirteenth and Fourteenth Coupon Observation Date
|
$5.50 (below coupon barrier)
|
$0.00
|
||
Fifth Autocall Observation Date / Fifteenth Coupon Observation Date
|
$5.50 (below coupon barrier)
|
$0.00
|
||
Sixteenth and Seventeenth Coupon Observation Date
|
$4.00 (below coupon barrier)
|
$0.00
|
||
Final Autocall and Coupon Observation Date
|
$4.00 (below conversion price and coupon barrier)
|
125 shares x $4.00 = $500.00 (value of shares delivered)
|
||
Total Payment:
|
$580.00 (-42.00% return)
|
What Are the Tax Consequences of the Securities?
|
Information About the Reference Stocks
|
Akamai Technologies, Inc.
|
Quarter Begin
|
Quarter End
|
Quarterly Closing High
|
Quarterly Closing Low
|
Quarterly Period-End
Close
|
1/04/2010
|
3/31/2010
|
$32.08
|
$24.70
|
$31.41
|
4/01/2010
|
6/30/2010
|
$45.72
|
$31.41
|
$40.57
|
7/01/2010
|
9/30/2010
|
$52.71
|
$37.20
|
$50.18
|
10/01/2010
|
12/31/2010
|
$54.14
|
$44.18
|
$47.05
|
1/03/2011
|
3/31/2011
|
$52.24
|
$34.96
|
$38.00
|
4/01/2011
|
6/30/2011
|
$40.98
|
$28.97
|
$31.47
|
7/01/2011
|
9/30/2011
|
$31.66
|
$19.88
|
$19.88
|
10/03/2011
|
12/30/2011
|
$32.30
|
$18.65
|
$32.28
|
1/03/2012
|
3/30/2012
|
$38.57
|
$31.37
|
$36.70
|
4/02/2012
|
6/29/2012
|
$38.75
|
$27.46
|
$31.75
|
7/02/2012
|
9/28/2012
|
$39.21
|
$28.25
|
$38.26
|
10/01/2012
|
12/31/2012
|
$41.85
|
$34.57
|
$40.91
|
1/02/2013
|
3/28/2013
|
$42.16
|
$34.40
|
$35.29
|
4/01/2013
|
6/28/2013
|
$48.03
|
$33.55
|
$42.55
|
7/01/2013
|
9/30/2013
|
$52.81
|
$42.55
|
$51.70
|
10/01/2013
|
12/31/2013
|
$53.39
|
$43.76
|
$47.18
|
1/02/2014
|
3/31/2014
|
$62.74
|
$46.01
|
$58.21
|
4/01/2014
|
6/30/2014
|
$62.12
|
$51.14
|
$61.06
|
7/01/2014
|
9/30/2014
|
$64.35
|
$56.54
|
$59.80
|
10/01/2014
|
12/31/2014
|
$64.79
|
$53.38
|
$62.96
|
1/02/2015
|
3/31/2015
|
$73.14
|
$58.16
|
$71.04
|
4/01/2015
|
6/26/2015*
|
$78.36
|
$70.31
|
$71.13
|
EOG Resources, Inc.
|
Quarter Begin
|
Quarter End
|
Quarterly Closing High
|
Quarterly Closing Low
|
Quarterly Period-End
Close
|
1/04/2010
|
3/31/2010
|
$50.19
|
$44.12
|
$46.47
|
4/01/2010
|
6/30/2010
|
$56.86
|
$47.79
|
$49.18
|
7/01/2010
|
9/30/2010
|
$53.40
|
$43.31
|
$46.48
|
10/01/2010
|
12/31/2010
|
$50.66
|
$44.14
|
$45.70
|
1/03/2011
|
3/31/2011
|
$59.84
|
$46.07
|
$59.26
|
4/01/2011
|
6/30/2011
|
$59.20
|
$49.14
|
$52.28
|
7/01/2011
|
9/30/2011
|
$53.28
|
$35.50
|
$35.50
|
10/03/2011
|
12/30/2011
|
$52.44
|
$34.20
|
$49.26
|
1/03/2012
|
3/30/2012
|
$58.81
|
$50.72
|
$55.55
|
4/02/2012
|
6/29/2012
|
$56.78
|
$41.98
|
$45.06
|
7/02/2012
|
9/28/2012
|
$58.81
|
$44.47
|
$56.02
|
10/01/2012
|
12/31/2012
|
$62.18
|
$54.39
|
$60.40
|
1/02/2013
|
3/28/2013
|
$67.05
|
$60.88
|
$64.04
|
4/01/2013
|
6/28/2013
|
$68.95
|
$56.72
|
$65.84
|
7/01/2013
|
9/30/2013
|
$86.04
|
$67.66
|
$84.64
|
10/01/2013
|
12/31/2013
|
$92.58
|
$78.13
|
$83.92
|
1/02/2014
|
3/31/2014
|
$98.58
|
$80.87
|
$98.08
|
4/01/2014
|
6/30/2014
|
$117.98
|
$97.06
|
$116.86
|
7/01/2014
|
9/30/2014
|
$117.10
|
$99.02
|
$99.02
|
10/01/2014
|
12/31/2014
|
$101.74
|
$83.76
|
$92.07
|
1/02/2015
|
3/31/2015
|
$96.92
|
$83.68
|
$91.69
|
4/01/2015
|
6/26/2015*
|
$99.74
|
$87.38
|
$88.06
|
Monster Beverage Corporation
|
Quarter Begin
|
Quarter End
|
Quarterly Closing High
|
Quarterly Closing Low
|
Quarterly Period-End
Close
|
1/04/2010
|
3/31/2010
|
$21.69
|
$19.02
|
$21.69
|
4/01/2010
|
6/30/2010
|
$22.20
|
$18.68
|
$19.56
|
7/01/2010
|
9/30/2010
|
$23.78
|
$19.64
|
$23.31
|
10/01/2010
|
12/31/2010
|
$27.20
|
$22.84
|
$26.14
|
1/03/2011
|
3/31/2011
|
$30.12
|
$25.98
|
$30.12
|
4/01/2011
|
6/30/2011
|
$40.48
|
$30.50
|
$40.48
|
7/01/2011
|
9/30/2011
|
$46.12
|
$34.46
|
$43.64
|
10/03/2011
|
12/30/2011
|
$48.60
|
$39.88
|
$46.07
|
1/03/2012
|
3/30/2012
|
$62.57
|
$46.20
|
$62.09
|
4/02/2012
|
6/29/2012
|
$78.72
|
$60.87
|
$71.20
|
7/02/2012
|
9/28/2012
|
$74.88
|
$50.78
|
$54.16
|
10/01/2012
|
12/31/2012
|
$58.42
|
$40.99
|
$52.88
|
1/02/2013
|
3/28/2013
|
$54.23
|
$46.19
|
$47.74
|
4/01/2013
|
6/28/2013
|
$62.20
|
$47.66
|
$60.77
|
7/01/2013
|
9/30/2013
|
$64.63
|
$52.25
|
$52.25
|
10/01/2013
|
12/31/2013
|
$67.80
|
$51.65
|
$67.77
|
1/02/2014
|
3/31/2014
|
$74.79
|
$66.46
|
$69.45
|
4/01/2014
|
6/30/2014
|
$73.25
|
$63.27
|
$71.03
|
7/01/2014
|
9/30/2014
|
$93.50
|
$63.96
|
$91.67
|
10/01/2014
|
12/31/2014
|
$112.56
|
$90.53
|
$108.35
|
1/02/2015
|
3/31/2015
|
$141.23
|
$108.16
|
$138.40
|
4/01/2015
|
6/26/2015*
|
$143.49
|
$124.88
|
$139.41
|
Supplemental Plan of Distribution (Conflicts of Interest)
|
Structuring the Securities
|
Terms Incorporated in Master Note
|
Validity of the Securities
|
1 Year Royal Bank of Canada Chart |
1 Month Royal Bank of Canada Chart |
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