Royal Bank of Canada Launches CMT-Linked Redeemable Notes with 7.02% Yield
Royal Bank of Canada (NYSE: RY) has launched redeemable range accrual notes tied to the 10-year constant Maturity Treasury rate.
The notes offer a 7.02% annual yield, contingent on the reference rate staying between 0.00% and 5.75%, with interest payments made quarterly when the condition is met.
According to Royal Bank of Canada, investors can purchase these notes at $990 per $1,000 principal for certain fiduciary accounts, while public investors typically pay 100% of the principal, resulting in net proceeds of 99% to the bank. However, the estimated value of each note is between $940 and $990, below the public offering price.
Royal Bank of Canada warns that market conditions can cause the notes' market value to fluctuate, potentially leading to losses for investors who sell before maturity.