By Marisa Wong
Madison, Wis., Aug. 6 – Royal Bank of Canada priced $2 million of 0% phoenix autocallable notes due Aug. 10, 2017 linked to the common stock of Ford Motor Co., according to a 424B2 filing with the Securities and Exchange Commission.
Each quarter, the notes will pay a contingent coupon at the rate of 6.85% per year if Ford shares close at or above the trigger price, 80% of the initial share price, on the observation date for that quarter. Otherwise, no coupon will be paid for that quarter.
If the stock closes at or above the initial price on any quarterly observation date other than the final review date, the notes will be called at par plus the contingent coupon.
If the notes are not called and the shares finish at or above the trigger price, the payout at maturity will be par plus the contingent coupon. Otherwise, investors will receive a number of shares equal to $1,000 divided by the initial share price or, at the issuer’s option, the cash value of those shares.
RBC Capital Markets, LLC is the underwriter with J.P. Morgan Securities LLC as placement agent.
| Issuer: | Royal Bank of Canada
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| Issue: | Phoenix autocallable notes
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| Underlying stock: | Ford Motor Co. (Symbol: F)
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| Amount: | $2 million
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| Maturity: | Aug. 10, 2017
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| Coupon: | 6.85% per year, payable quarterly if stock closes at or above barrier level on observation date for that quarter
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| Price: | Par
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| Payout at maturity: | Par plus contingent coupon if Ford shares finish at or above trigger price; otherwise, a number of shares equal to $1,000 divided by initial share price or, at issuer’s option, equivalent value in cash
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| Call: | At par plus contingent coupon if Ford shares close at or above initial price on any quarterly observation date other than final date
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| Initial share price: | $16.87
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| Barrier/trigger price: | $13.50, 80% of initial share price
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| Pricing date: | Aug. 5
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| Settlement date: | Aug. 8
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| Underwriter: | RBC Capital Markets, LLC
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| Agent: | J.P Morgan Securities LLC (placement)
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| Fees: | 2%
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| Cusip: | 78010US57
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