|
|
Registration
Statement No. 333-275898
Filed
Pursuant to Rule 424(b)(2)
|
The
information in this preliminary pricing supplement is not complete and may be changed.
|
|
|
|
Preliminary
Pricing Supplement
Subject to
Completion: Dated July 3, 2024
Pricing
Supplement dated July __, 2024 to the Prospectus dated December 20, 2023, the Prospectus Supplement dated December 20, 2023, the
Underlying Supplement No. 1A dated May 16, 2024 and the Product Supplement No. 1A dated May 16, 2024
|
|
$
Capped Return Dual Directional Notes with Single
Knock-Out
Observation
Linked to the S&P 500® Index,
Due October 23, 2025
Royal
Bank of Canada |
|
|
|
Royal Bank of Canada
is offering Capped Return Dual Directional Notes with Single Knock-Out Observation (the “Notes”) linked to the performance
of the S&P 500® Index (the “Underlier”).
| • | Single
Knock-Out Observation — A Knock-Out Event will occur if the Final Underlier Value
is greater than the Upper Knock-Out Value (at least 110.50% of the Initial Underlier Value,
to be determined on the Trade Date) or less than the Lower Knock-Out Value (at most 89.50%
of the Initial Underlier Value, to be determined on the Trade Date). |
| • | Fixed
Return at Maturity If a Knock-Out Event Occurs — If a Knock-Out Event occurs, at
maturity, the investor will receive a fixed return of 5%. |
| • | Capped
Return Potential or Absolute Value Return If No Knock-Out Event Occurs — If a Knock-Out
Event has not occurred and the Final Underlier Value is greater than the Initial Underlier
Value, at maturity, the investor will receive a return equal to the Underlier Return. If
a Knock-Out Event has not occurred and the Final Underlier Value is less than the Initial
Underlier Value, at maturity, the investor will receive a one-for-one positive return equal
to the absolute value of the Underlier Return. |
| • | The
Notes do not pay interest. |
| • | Any
payments on the Notes are subject to our credit risk. |
| • | The
Notes will not be listed on any securities exchange. |
CUSIP: 78017GCQ2
Investing in
the Notes involves a number of risks. See “Selected Risk Considerations” beginning on page P-7 of this pricing supplement
and “Risk Factors” in the accompanying prospectus, prospectus supplement and product supplement.
None of the Securities
and Exchange Commission (the “SEC”), any state securities commission or any other regulatory body has approved or disapproved
of the Notes or passed upon the adequacy or accuracy of this pricing supplement. Any representation to the contrary is a criminal offense.
The Notes will not constitute deposits insured by the Canada Deposit Insurance Corporation, the U.S. Federal Deposit Insurance Corporation
or any other Canadian or U.S. governmental agency or instrumentality. The Notes are not bail-inable notes and are not subject to conversion
into our common shares under subsection 39.2(2.3) of the Canada Deposit Insurance Corporation Act.
|
Per
Note |
Total |
Price to
public(1) |
100.00% |
$ |
Underwriting
discounts and commissions(1) |
0.50% |
$ |
Proceeds
to Royal Bank of Canada |
99.50% |
$ |
(1) We
or one of our affiliates may pay varying selling concessions of up to $5.00 per $1,000 principal amount of Notes in connection with the
distribution of the Notes to other registered broker-dealers. Certain dealers who purchase the Notes for sale to certain fee-based advisory
accounts may forgo some or all of their underwriting discount or selling concessions. The public offering price for investors purchasing
the Notes in these accounts may be between $995.00 and $1,000.00 per $1,000 principal amount of Notes. In addition, we or one of our
affiliates may pay a broker-dealer that is not affiliated with us a referral fee of up to $3.10 per $1,000 principal amount of Notes.
See “Supplemental Plan of Distribution (Conflicts of Interest)” below.
The initial estimated
value of the Notes determined by us as of the Trade Date, which we refer to as the initial estimated value, is expected to be between
$936.00 and $986.00 per $1,000 principal amount of Notes and will be less than the public offering price of the Notes. The final pricing
supplement relating to the Notes will set forth the initial estimated value. The market value of the Notes at any time will reflect many
factors, cannot be predicted with accuracy and may be less than this amount. We describe the determination of the initial estimated value
in more detail below.
| |
| Capped
Return Dual Directional Notes with Single Knock-Out Observation Linked to the S&P
500® Index |
KEY
TERMS
The information
in this “Key Terms” section is qualified by the more detailed information set forth in this pricing supplement and in the
accompanying prospectus, prospectus supplement, underlying supplement and product supplement.
Issuer: |
Royal
Bank of Canada |
Underwriter: |
RBC
Capital Markets, LLC (“RBCCM”) |
Minimum
Investment: |
$1,000
and minimum denominations of $1,000 in excess thereof |
Underlier: |
The
S&P 500® Index |
|
Bloomberg
Ticker |
Initial
Underlier Value(1) |
Upper
Knock-Out Value(2) |
Lower
Knock-Out Value(3) |
|
SPX |
|
|
|
|
(1)
The closing value of the Underlier on the Trade Date |
|
(2)
At least 110.50% of the Initial Underlier Value, to be determined on the Trade Date (rounded to two decimal places) |
|
(3)
At most 89.50% of the Initial Underlier Value, to be determined on the Trade Date (rounded to two decimal places) |
Trade
Date: |
July
18, 2024 |
Issue
Date: |
July
23, 2024 |
Valuation
Date:* |
October
20, 2025 |
Maturity
Date:* |
October
23, 2025 |
Payment
at Maturity: |
The investor
will receive on the Maturity Date per $1,000 principal amount of Notes:
•
If a Knock-Out Event has not occurred and the Final Underlier Value is greater than
or equal to the Initial Underlier Value, an amount equal to:
$1,000 + ($1,000
× Underlier Return)
Assuming
an Upper Knock-Out Value of 110.50% of the Initial Underlier Value (to be determined on the Trade Date), in no event will this return
exceed 10.50%.
•
If a Knock-Out Event has not occurred and the Final Underlier Value is less than the
Initial Underlier Value, an amount equal to:
$1,000 + (-1
× $1,000 × Underlier Return)
In this case,
you will receive a positive return on the Notes equal to the absolute value of the Underlier Return, even though the Underlier Return
is negative. Assuming a Lower Knock-Out Value of 89.50% of the Initial Underlier Value (to be determined on the Trade Date), in no
event will this return exceed 10.50%.
•
If a Knock-Out Event has occurred: $1,050
All payments
on the Notes are subject to our credit risk.
|
Knock-Out
Event: |
A
Knock-Out Event will occur if the Final Underlier Value is greater than the Upper Knock-Out Value or less than the Lower Knock-Out
Value. |
Underlier
Return: |
The Underlier
Return, expressed as a percentage, is calculated using the following formula:
Final Underlier
Value – Initial Underlier Value
Initial Underlier Value |
Final
Underlier Value: |
The
closing value of the Underlier on the Valuation Date |
P-2 | RBC Capital Markets, LLC |
| |
| Capped
Return Dual Directional Notes with Single Knock-Out Observation Linked to the S&P
500® Index |
* Subject to postponement. See “General
Terms of the Notes—Postponement of a Determination Date” and “General Terms of the Notes—Postponement of a Payment
Date” in the accompanying product supplement.
P-3 | RBC Capital Markets, LLC |
| |
| Capped
Return Dual Directional Notes with Single Knock-Out Observation Linked to the S&P
500® Index |
ADDITIONAL
TERMS OF YOUR NOTES
You should read
this pricing supplement together with the prospectus dated December 20, 2023, as supplemented by the prospectus supplement dated December
20, 2023, relating to our Senior Global Medium-Term Notes, Series J, of which the Notes are a part, the underlying supplement no. 1A
dated May 16, 2024 and the product supplement no. 1A dated May 16, 2024. This pricing supplement, together with these documents, contains
the terms of the Notes and supersedes all other prior or contemporaneous oral statements as well as any other written materials, including
preliminary or indicative pricing terms, correspondence, trade ideas, structures for implementation, sample structures, fact sheets,
brochures or other educational materials of ours.
We have not authorized
anyone to provide any information or to make any representations other than those contained or incorporated by reference in this pricing
supplement and the documents listed below. We take no responsibility for, and can provide no assurance as to the reliability of, any
other information that others may give you. These documents are an offer to sell only the Notes offered hereby, but only under circumstances
and in jurisdictions where it is lawful to do so. The information contained in each such document is current only as of its date.
If the information
in this pricing supplement differs from the information contained in the documents listed below, you should rely on the information in
this pricing supplement.
You should carefully
consider, among other things, the matters set forth in “Selected Risk Considerations” in this pricing supplement and “Risk
Factors” in the documents listed below, as the Notes involve risks not associated with conventional debt securities. We urge you
to consult your investment, legal, tax, accounting and other advisers before you invest in the Notes.
You may access these
documents on the SEC website at www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date
on the SEC website):
| • | Prospectus
dated December 20, 2023: |
https://www.sec.gov/Archives/edgar/data/1000275/000119312523299520/d645671d424b3.htm
| • | Prospectus
Supplement dated December 20, 2023: |
https://www.sec.gov/Archives/edgar/data/1000275/000119312523299523/d638227d424b3.htm
| • | Underlying
Supplement No. 1A dated May 16, 2024: |
https://www.sec.gov/Archives/edgar/data/1000275/000095010324006773/dp211259_424b2-us1a.htm
| • | Product
Supplement No. 1A dated May 16, 2024: |
https://www.sec.gov/Archives/edgar/data/1000275/000095010324006777/dp211286_424b2-ps1a.htm
Our Central Index
Key, or CIK, on the SEC website is 1000275. As used in this pricing supplement, “Royal Bank of Canada,” the “Bank,”
“we,” “our” and “us” mean only Royal Bank of Canada.
P-4 | RBC Capital Markets, LLC |
| |
| Capped
Return Dual Directional Notes with Single Knock-Out Observation Linked to the S&P
500® Index |
HYPOTHETICAL
RETURNS
The table and examples
set forth below illustrate hypothetical payments at maturity for hypothetical performance of the Underlier, based on a hypothetical Upper
Knock-Out Value of 110.50% of the Initial Underlier Value (the actual Upper Knock-Out Value will be determined on the Trade Date) and
a hypothetical Lower Knock-Out Value of 89.50% of the Initial Underlier Value (the actual Lower Knock-Out Value will be determined on
the Trade Date). The table and examples are only for illustrative purposes and may not show the actual return applicable to a purchaser
of the Notes.
Hypothetical
Underlier Return |
Payment
at Maturity per $1,000 Principal Amount of Notes |
Payment
at Maturity as Percentage of Principal Amount |
50.00% |
$1,050.00 |
105.000% |
40.00% |
$1,050.00 |
105.000% |
30.00% |
$1,050.00 |
105.000% |
20.00% |
$1,050.00 |
105.000% |
10.51% |
$1,050.00 |
105.000% |
10.50% |
$1,105.00 |
110.500% |
10.00% |
$1,100.00 |
110.000% |
5.00% |
$1,050.00 |
105.000% |
2.00% |
$1,020.00 |
102.000% |
0.00% |
$1,000.00 |
100.000% |
-2.00% |
$1,020.00 |
102.000% |
-5.00% |
$1,050.00 |
105.000% |
-10.00% |
$1,100.00 |
110.000% |
-10.50% |
$1,105.00 |
110.500% |
-10.51% |
$1,050.00 |
105.000% |
-20.00% |
$1,050.00 |
105.000% |
-30.00% |
$1,050.00 |
105.000% |
-40.00% |
$1,050.00 |
105.000% |
-50.00% |
$1,050.00 |
105.000% |
-60.00% |
$1,050.00 |
105.000% |
-70.00% |
$1,050.00 |
105.000% |
-80.00% |
$1,050.00 |
105.000% |
-90.00% |
$1,050.00 |
105.000% |
-100.00% |
$1,050.00 |
105.000% |
Example
1 — |
The
value of the Underlier increases from the Initial Underlier Value to the Final Underlier Value by 40%. A Knock-Out Event has occurred. |
|
Underlier
Return: |
40% |
|
Payment
at Maturity: |
$1,050 |
|
In this example,
the payment at maturity is $1,050 per $1,000 principal amount of Notes, for a return of 5%.
This example
illustrates that the investor will receive a fixed return if a Knock-Out Event has occurred, regardless of any appreciation of the
Underlier, which may be significant.
|
P-5 | RBC Capital Markets, LLC |
| |
| Capped
Return Dual Directional Notes with Single Knock-Out Observation Linked to the S&P
500® Index |
Example
2 — |
The
value of the Underlier decreases from the Initial Underlier Value to the Final Underlier Value by 40%. A Knock-Out Event has occurred. |
|
Underlier
Return: |
-40% |
|
Payment
at Maturity: |
$1,050 |
|
In this example,
the payment at maturity is $1,050 per $1,000 principal amount of Notes, for a return of 5%.
This example
illustrates that the investor will receive a fixed return if a Knock-Out Event has occurred, regardless of any depreciation of the
Underlier, which may be significant.
|
Example
3 — |
The
value of the Underlier increases from the Initial Underlier Value to the Final Underlier Value by 5%. A Knock-Out Event has not occurred. |
|
Underlier
Return: |
5% |
|
Payment
at Maturity: |
$1,000
+ ($1,000 × 5%) = $1,000 + $50 = $1,050 |
|
In this example,
the payment at maturity is $1,050 per $1,000 principal amount of Notes, for a return of 5%.
Because a Knock-Out
Event has not occurred and the Final Underlier Value is greater than the Initial Underlier Value, the investor receives a return
equal to 100% of the Underlier Return.
|
Example
4 — |
The
value of the Underlier decreases from the Initial Underlier Value to the Final Underlier Value by 10%. A Knock-Out Event has not
occurred. |
|
Underlier
Return: |
-10% |
|
Payment
at Maturity: |
$1,000
+ (-1 × $1,000 × -10%) = $1,000 + $100 = $1,100 |
|
In this example,
the payment at maturity is $1,100 per $1,000 principal amount of Notes, for a return of 10%.
Because a Knock-Out
Event has not occurred and the Final Underlier Value is less than the Initial Underlier Value, even though the Underlier Return is
negative, the investor receives a positive return equal to the absolute value of the Underlier Return.
|
P-6 | RBC Capital Markets, LLC |
| |
| Capped
Return Dual Directional Notes with Single Knock-Out Observation Linked to the S&P
500® Index |
SELECTED
RISK CONSIDERATIONS
An investment in
the Notes involves significant risks. We urge you to consult your investment, legal, tax, accounting and other advisers before you invest
in the Notes. Some of the risks that apply to an investment in the Notes are summarized below, but we urge you to read also the “Risk
Factors” sections of the accompanying prospectus, prospectus supplement and product supplement. You should not purchase the Notes
unless you understand and can bear the risks of investing in the Notes.
Risks Relating
to the Terms and Structure of the Notes
| • | The
Notes Do Not Pay Interest, and Your Return on the Notes 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 zero, 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 purchased one
of our conventional senior interest-bearing debt securities. If a Knock-Out Event has occurred,
your return on the Notes will be 5%, with no additional return. If no Knock-Out Event has
occurred, your return will reflect the positive performance or absolute return performance
of the Underlier, and you may receive only the principal amount of the Notes, with no additional
return. |
| • | Your
Potential Payment at Maturity Is Limited — You will receive a payment based on
the positive performance or absolute return performance of the Underlier only if a Knock-Out
Event does not occur. Thus, any return potential of the Notes in the event that a Knock-Out
Event does not occur is limited by the Upper Knock-Out Value and the Lower Knock-Out Value. |
| • | Payments
on the Notes Are Subject to Our Credit Risk, and Market Perceptions about Our Creditworthiness
May Adversely Affect the Market Value of the Notes — The Notes are our senior unsecured
debt securities, and your receipt of any amounts due on the Notes is dependent upon our ability
to pay our obligations as they come due. If we were to default on our payment obligations,
you may not receive any amounts owed to you under the Notes and you could lose your entire
investment. In addition, any negative changes in market perceptions about our creditworthiness
may adversely affect the market value of the Notes. |
| • | Any
Payment on the Notes Will Be Determined Based on the Closing Values of the Underlier on the
Dates Specified — Any payment on the Notes will be determined based on the closing
values of the Underlier on the dates specified. You will not benefit from any more favorable
value of the Underlier determined at any other time. |
| • | You
May Be Required to Recognize Taxable Income on the Notes Prior to Maturity — If
you are a U.S. investor in a Note, under the treatment of a Note as a contingent payment
debt instrument, you will generally be required to recognize taxable interest income in each
year that you hold the Note. In addition, any gain you recognize under the rules applicable
to contingent payment debt instruments will generally be treated as ordinary interest income
rather than capital gain. You should review carefully the section entitled “United
States Federal Income Tax Considerations” herein, in combination with the section entitled
“United States Federal Income Tax Considerations” in the accompanying product
supplement, and consult your tax adviser regarding the U.S. federal income tax consequences
of an investment in the Notes. |
Risks Relating
to the Initial Estimated Value of the Notes and the Secondary Market for the Notes
| • | 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 our other affiliates may
make a market for the Notes; however, they are not required to do so and, if they choose
to do so, may stop any market-making activities at any time. Because other dealers are not
likely to make a secondary market for the Notes, the price at which you may be able to trade
your Notes is likely to depend on the price, if any, at which RBCCM or any of our other affiliates
is willing to buy the Notes. Even
if a secondary market for the Notes develops, it may not provide enough liquidity to allow you to easily trade or sell the Notes. We
expect that transaction costs in any secondary market would be high. As a result, the difference between bid and ask |
P-7 | RBC Capital Markets, LLC |
| |
| Capped
Return Dual Directional Notes with Single Knock-Out Observation Linked to the S&P
500® Index |
prices for your
Notes in any secondary market could be substantial. If you sell your Notes before maturity, you may have to do so at a substantial discount
from the price that you paid for them, and as a result, you may suffer significant losses. The Notes are not designed to be short-term
trading instruments. Accordingly, you should be able and willing to hold your Notes to maturity.
| • | The
Initial Estimated Value of the Notes Will Be Less Than the Public Offering Price —
The initial estimated value of the Notes will be less than the public offering price of the
Notes and does not represent a minimum price at which we, RBCCM or any of our other 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 value of the Underlier, the internal funding rate we pay to issue
securities of this kind (which is lower than the rate at which we borrow funds by issuing
conventional fixed rate debt) and the inclusion in the public offering price of the underwriting
discount, the referral fee, our estimated profit 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, the referral fee, our estimated profit or the hedging costs relating
to the Notes. In addition, any price at which you may sell the Notes is likely to reflect
customary bid-ask spreads for similar trades. In addition to bid-ask spreads, the value of
the Notes determined for any secondary market price is expected to be based on a secondary
market rate rather than the internal funding rate used to price the Notes and determine the
initial estimated value. As a result, the secondary market price will be less than if the
internal funding rate were used. |
| • | The
Initial Estimated Value of the Notes Is Only an Estimate, Calculated as of the Trade Date
— 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 internal funding rate (which represents
a discount from 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. |
The value
of the Notes at any time after the Trade 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 the Notes.
Risks Relating
to Conflicts of Interest and Our Trading Activities
| • | Our
and Our Affiliates’ Business and Trading Activities May Create Conflicts of Interest
— You should make your own independent investigation of the merits of investing
in the Notes. Our and our affiliates’ economic interests are potentially adverse to
your interests as an investor in the Notes due to our and our affiliates’ business
and trading activities, and we and our affiliates have no obligation to consider your interests
in taking any actions that might affect the value of the Notes. Trading by us and our affiliates
may adversely affect the value of the Underlier and the market value of the Notes. See “Risk
Factors—Risks Relating to Conflicts of Interest” in the accompanying product
supplement. |
| • | RBCCM’s
Role as Calculation Agent May Create Conflicts of Interest — As Calculation Agent,
our affiliate, RBCCM, will determine any values of the Underlier and make any other determinations
necessary to calculate any payments on the Notes. In making these determinations, the Calculation
Agent may be required to make discretionary judgments, including those described under “—Risks
Relating to the Underlier” below. In making these discretionary judgments, the economic
interests of the Calculation Agent are potentially adverse to your interests as an investor
in the Notes,
and any of these determinations may adversely affect any payments on the Notes. The Calculation Agent will have no obligation to consider
your interests as an investor in the Notes in making any determinations with respect to the Notes. |
P-8 | RBC Capital Markets, LLC |
| |
| Capped
Return Dual Directional Notes with Single Knock-Out Observation Linked to the S&P
500® Index |
Risks Relating
to the Underlier
| • | You
Will Not Have Any Rights to the Securities Included in the Underlier — As an investor
in the Notes, you will not have voting rights or rights to receive dividends or other distributions
or any other rights with respect to the securities included in the Underlier. The Underlier
is a price return index and its return does not reflect regular cash dividends paid by its
components. |
| • | Any
Payment on the Notes May Be Postponed and Adversely Affected by the Occurrence of a Market
Disruption Event — The timing and amount of any payment on the Notes is subject
to adjustment upon the occurrence of a market disruption event affecting the Underlier. If
a market disruption event persists for a sustained period, the Calculation Agent may make
a determination of the closing value of the Underlier. See “General Terms of the Notes—Indices—Market
Disruption Events,” “General Terms of the Notes—Postponement of a Determination
Date” and “General Terms of the Notes—Postponement of a Payment Date”
in the accompanying product supplement. |
| • | Adjustments
to the Underlier Could Adversely Affect Any Payments on the Notes — The sponsor
of the Underlier may add, delete, substitute or adjust the securities composing the Underlier
or make other methodological changes to the Underlier that could affect its performance.
The Calculation Agent will calculate the value to be used as the closing value of the Underlier
in the event of certain material changes in, or modifications to, the Underlier. In addition,
the sponsor of the Underlier may also discontinue or suspend calculation or publication of
the Underlier at any time. Under these circumstances, the Calculation Agent may select a
successor index that the Calculation Agent determines to be comparable to the Underlier or,
if no successor index is available, the Calculation Agent will determine the value to be
used as the closing value of the Underlier. Any of these actions could adversely affect the
value of the Underlier and, consequently, the value of the Notes. See “General Terms
of the Notes—Indices—Discontinuation of, or Adjustments to, an Index” in
the accompanying product supplement. |
P-9 | RBC Capital Markets, LLC |
| |
| Capped
Return Dual Directional Notes with Single Knock-Out Observation Linked to the S&P
500® Index |
INFORMATION
REGARDING THE UNDERLIER
The Underlier consists
of stocks of 500 companies selected to provide a performance benchmark for the U.S. equity markets. For more information about the Underlier,
see “Indices—The S&P U.S. Indices” in the accompanying underlying supplement.
Historical Information
The following graph
sets forth historical closing values of the Underlier for the period from January 1, 2014 to July 1, 2024. The green line represents
a hypothetical Upper Knock-Out Value and the red line represents a hypothetical Lower Knock-Out Value, in each case based on the closing
value of the Underlier on July 1, 2024. We obtained the information in the graph from Bloomberg Financial Markets, without independent
investigation. We cannot give you assurance that the performance of the Underlier will result in a positive return on your initial
investment.
S&P 500®
Index
PAST PERFORMANCE
IS NOT INDICATIVE OF FUTURE RESULTS.
P-10 | RBC Capital Markets, LLC |
| |
| Capped
Return Dual Directional Notes with Single Knock-Out Observation Linked to the S&P
500® Index |
UNITED
STATES FEDERAL INCOME TAX CONSIDERATIONS
You should review
carefully the section in the accompanying product supplement entitled “United States Federal Income Tax Considerations.”
The following discussion, when read in combination with that section, constitutes the full opinion of our counsel, Davis Polk & Wardwell
LLP, regarding the material U.S. federal income tax consequences of owning and disposing of the Notes.
Generally, this
discussion assumes that you purchased the Notes for cash in the original issuance at the stated issue price and does not address other
circumstances specific to you, including consequences that may arise due to any other investments relating to the Underlier. You should
consult your tax adviser regarding the effect any such circumstances may have on the U.S. federal income tax consequences of your ownership
of a Note.
We intend to treat
the Notes for U.S. federal income tax purposes as contingent payment debt instruments, or “CPDIs,” as described in “United
States Federal Income Tax Considerations—Tax Consequences to U.S. Holders—Notes Treated as Debt Instruments—Notes Treated
as Contingent Payment Debt Instruments” in the accompanying product supplement. In the opinion of our counsel, which is based on
current market conditions, this treatment of the Notes is reasonable under current law. Assuming this treatment is respected, regardless
of your method of accounting for U.S. federal income tax purposes, you generally will be required to accrue interest income in each year
on a constant yield to maturity basis at the “comparable yield,” as determined by us, adjusted upward or downward to reflect
the difference, if any, between the actual and projected payments on the Notes during the year. Upon a taxable disposition of a Note,
you generally will recognize taxable income or loss equal to the difference between the amount received and your tax basis in the Notes.
You generally must treat any income realized as interest income and any loss as ordinary loss to the extent of previous interest inclusions,
and the balance as capital loss, the deductibility of which is subject to limitations.
After the original
issue date, you may obtain the comparable yield and the projected payment schedule by requesting them from RBCCM at 1-877-688-2301.
Neither the comparable
yield nor the projected payment schedule constitutes a representation by us regarding the actual amount(s) that we will pay on the Notes.
Non-U.S. Holders.
If you are a Non-U.S. Holder, please also read the section entitled “United States Federal Income Tax Considerations—Tax
Consequences to Non-U.S. Holders—Notes Treated as Debt Instruments” in the accompanying product supplement.
As discussed under
“United States Federal Income Tax Considerations—Tax Consequences to Non-U.S. Holders—Dividend Equivalents under Section
871(m) of the Code” in the accompanying product supplement, Section 871(m) of the Internal Revenue Code and Treasury regulations
promulgated thereunder (“Section 871(m)”) generally impose a 30% withholding tax on dividend equivalents paid or deemed paid
to Non-U.S. Holders with respect to certain financial instruments linked to U.S. equities or indices that include U.S. equities. The
Treasury regulations, as modified by an Internal Revenue Service (the “IRS”) notice, exempt financial instruments issued
prior to January 1, 2027 that do not have a “delta” of one. Based on certain determinations made by us, we expect that Section
871(m) will not apply to the Notes with regard to Non-U.S. Holders. Our determination is not binding on the IRS, and the IRS may disagree
with this determination. If necessary, further information regarding the potential application of Section 871(m) will be provided in
the final pricing supplement for the Notes.
We will not be required
to pay any additional amounts with respect to U.S. federal withholding taxes.
You should consult
your tax adviser regarding the U.S. federal income tax consequences of an investment in the Notes, as well as tax consequences arising
under the laws of any state, local or non-U.S. taxing jurisdiction.
P-11 | RBC Capital Markets, LLC |
| |
| Capped
Return Dual Directional Notes with Single Knock-Out Observation Linked to the S&P
500® Index |
SUPPLEMENTAL
PLAN OF DISTRIBUTION (CONFLICTS OF INTEREST)
The Notes are offered
initially to investors at a purchase price equal to par, except with respect to certain accounts as indicated on the cover page of this
pricing supplement. We or one of our affiliates may pay the underwriting discount and may pay a broker-dealer that is not affiliated
with us a referral fee, in each case as set forth on the cover page of this pricing supplement.
The value of the
Notes shown on your account statement may be based on RBCCM’s estimate of the value of the Notes if RBCCM or another of our affiliates
were to make a market in the Notes (which it is not obligated to do). That estimate will be based on the price that RBCCM may pay for
the Notes in light of then-prevailing market conditions, our creditworthiness and transaction costs. For a period of approximately three
months after the Issue Date, the value of the Notes that may be shown on your account statement may be higher than RBCCM’s estimated
value of the Notes at that time. This is because the estimated value of the Notes will not include the underwriting discount, the referral
fee or our hedging costs and profits; however, the value of the Notes shown on your account statement during that period may initially
be a higher amount, reflecting the addition of the underwriting discount, the referral fee and our estimated costs and profits from hedging
the Notes. This excess is expected to decrease over time until the end of this period. After this period, if RBCCM repurchases your Notes,
it expects to do so at prices that reflect their estimated value.
RBCCM or another
of its affiliates or agents may use this pricing supplement in the initial sale of the Notes. In addition, RBCCM or another of our affiliates
may use this pricing supplement in a market-making transaction in the Notes after their initial sale. Unless we or our agent informs
the purchaser otherwise in the confirmation of sale, this pricing supplement is being used in a market-making transaction.
For additional information
about the settlement cycle of the Notes, see “Plan of Distribution” in the accompanying prospectus. For additional information
as to the relationship between us and RBCCM, see the section “Plan of Distribution—Conflicts of Interest” in the accompanying
prospectus.
STRUCTURING
THE NOTES
The Notes are our
debt securities. As is the case for all of our debt securities, including our structured notes, the economic terms of the Notes reflect
our actual or perceived creditworthiness. In addition, because structured notes result in increased operational, funding and liability
management costs to us, we typically borrow the funds under structured notes at a rate that is lower than the rate that we might pay
for a conventional fixed or floating rate debt security of comparable maturity. The lower internal funding rate, the underwriting discount,
the referral fee and the hedging-related costs relating to the Notes reduce the economic terms of the Notes to you and result in the
initial estimated value for the Notes being less than their public offering price. Unlike the initial estimated value, any value of the
Notes determined for purposes of a secondary market transaction may be based on a secondary market rate, which may result in a lower
value for the Notes than if our initial internal funding rate were used.
In order to satisfy
our payment obligations under the Notes, we may choose to enter into certain hedging arrangements (which may include call options, put
options or other derivatives) with RBCCM and/or one of our other subsidiaries. The terms of these hedging arrangements take into account
a number of factors, including our creditworthiness, interest rate movements, volatility and the tenor of the Notes. The economic terms
of the Notes and the initial estimated value depend in part on the terms of these hedging arrangements.
See “Selected
Risk Considerations—Risks Relating to the Initial Estimated Value of the Notes and the Secondary Market for the Notes—The
Initial Estimated Value of the Notes Will Be Less Than the Public Offering Price” above.
P-12 | RBC Capital Markets, LLC |
Royal Bank (PK) (USOTC:RYBPF)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
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과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024