Royal Bank of Canada (RBC) has launched a new financial product, the Auto-Callable Fixed Coupon Barrier Notes, linked to the performance of three major companies: Blackstone Inc. (BX), Merck & Co. Inc. (MRK), and Valero Energy Corporation (VLO). These notes, valued at $1,000,000, are set to mature on October 11, 2029.
The notes offer a fixed coupon rate of 12.75% per annum, payable monthly, if they are not automatically called. The call feature allows for early redemption if the closing values of all three underliers meet or exceed 95% of their initial values. If called, investors receive their principal plus the accrued coupon. If not called, the notes' performance hinges on the least performing underlier, with potential principal repayment contingent on its value relative to a 50% barrier.
RBC Capital Markets, LLC is the underwriter for this offering, with a public offering price of $1,000 per note. The bank retains $975,000 after underwriting discounts and commissions. The initial estimated value of the notes is $961.28 per $1,000 principal amount, which is less than the public offering price. Investors should be aware that the market value of the notes may fluctuate and could be lower than the estimated value.
The notes are not listed on any securities exchange and carry significant risks, including credit risk and the potential for substantial loss if the least performing underlier's value falls below the barrier. The SEC and other regulatory bodies have not endorsed the notes, and they are not insured by any governmental agency.