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RBC to price redeemable leveraged steepener notes linked to CMS rates
By Angela McDaniels
Tacoma, Wash., Jan. 31 - Royal Bank of Canada plans to price redeemable leveraged steepener notes due Feb. 28, 2034 linked to the 30-year Constant Maturity Swap rate and the five-year CMS rate, according to a 424B2 filing with the Securities and Exchange Commission.
The interest rate will be 10% for the first two years. In years three through 20, the interest rate will be 4 times the reference rate, subject to a cap of 10% per year and a floor of zero. The reference rate is the 30-year CMS rate minus the five-year CMS rate minus 25 basis points. Interest is payable semiannually.
The payout at maturity will be par.
The notes will be callable on Aug. 28, 2014, Feb. 28, 2015, Feb. 28, 2019, Feb. 28, 2024 and Feb. 28, 2029.
RBC Capital Markets, LLC is the agent.
The notes will settle Feb. 28
The Cusip number is 78010UDU8.
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