RBC Launches Nasdaq-100 Linked Structured Notes with Auto-Call Feature

Royal Bank of Canada has unveiled plans for a new financial product: Auto-Callable Enhanced Return Barrier Notes linked to the Nasdaq-100 Index. These notes, set to mature on October 31, 2029, were detailed in a free writing prospectus filed under Rule 433 pursuant to Registration Statement No. 333-275898.

The notes feature an automatic call mechanism. If the Nasdaq-100 Index closes at or above its initial value on November 2, 2027, investors will receive at least $1,110 per $1,000 principal on November 5, 2027. Should the notes not be called and the index ends above its initial value at maturity, investors will earn 125% of the Underlier Return on their principal.

For investors holding the notes to maturity, the payoff depends on the Final Underlier Value. If the index closes above the initial value, they receive their principal plus enhanced returns. If the index falls but stays above 75% of the initial value, investors get their full principal back. However, if the index drops below the 75% barrier, investors face losses equal to 1% of the principal for every 1% decline below the initial value.

The initial estimated value of the notes ranges from $915.00 to $965.00 per $1,000 principal, below the public offering price. Additional risks include RBC's credit risk, potential conflicts of interest, uncertain tax implications, and the lack of an active secondary market for trading these notes.