By Susanna Moon
Chicago, April 2 - Royal Bank of Canada priced $7.7 million of contingent income autocallable securities due March 31, 2017 with step-up redemption threshold linked to Microsoft Corp. shares, according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly coupon of 2.125% if Microsoft stock closes at or above the trigger level, 80% of the initial share price, on any quarterly determination date.
The notes will be redeemed at par of $10 plus the contingent coupon if the stock closes at or above the redemption level on any of the first 11 quarterly determination dates.
The redemption threshold will be 105% of the initial share price for the first four review dates, stepping up to 110% of the initial share price for the next four review dates and to 115% of the initial share price for the final three review dates.
If the notes are not called and the final share price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the contingent coupon.
Otherwise, the payout will be a number of Microsoft shares equal to $10 divided by the initial share price or, at the issuer's option, the cash equivalent.
RBC Capital Markets, LLC is the agent with Morgan Stanley Wealth Management handling distribution.
| Issuer: | Royal Bank of Canada
|
| Issue: | Contingent income autocallable securities with step-up redemption threshold
|
| Underlying stock: | Microsoft Corp. (Symbol: MSFT)
|
| Amount: | $7,701,110
|
| Maturity: | March 31, 2017
|
| Coupon: | 2.125% for each quarter that Microsoft stock closes at or above trigger level on any quarterly determination date
|
| Price: | Par of $10
|
| Payout at maturity: | If stock finishes at or above trigger level, par plus contingent coupon; otherwise, 0.2481 Microsoft shares
|
| Call: | At par plus contingent coupon if stock closes at or above redemption level on any of first 11 quarterly determination dates
|
| Initial price: | $40.30
|
| Trigger level: | $32.24, 80% of initial price
|
| Redemption level: | 105% of initial share price for first four review dates, stepping up to 110% of initial share price for next four review dates and to 115% of initial share price for final three review dates
|
| Pricing date: | March 28
|
| Settlement date: | April 2
|
| Agent: | RBC Capital Markets, LLC with Morgan Stanley Wealth Management as distributor
|
| Fees: | 1.5%
|
| Cusip: | 78010Y836
|
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