RBC plans autocallables with memory coupon linked to pharma stocks

By Angela McDaniels

Tacoma, Wash., Dec. 13 – Royal Bank of Canada plans to price autocallable contingent coupon barrier notes with memory coupon due Dec. 27, 2019 linked to the lesser performing of the common stocks of Bristol-Myers Squibb Co. and Johnson & Johnson, according to an FWP filing with the Securities and Exchange Commission.

If each stock closes at or above its barrier price, 70% of the initial share price, on a quarterly observation date, the issuer will pay a contingent coupon for that quarter at the annual rate of 9% plus the memory coupon, which is the product of (a) the contingent coupon and (b) the number of contingent coupon payments, if any, that were not previously paid on their coupon payment dates because one or both of the stock prices was less than its barrier price on the corresponding observation date.

Beginning Dec. 21, 2017, the notes will be called at par plus the contingent coupon if each stock closes at or above its initial price on any quarterly observation date.

If the notes are not called, the payout at maturity will be par plus the contingent coupon unless the final share price of the lesser-performing stock is less than its barrier price, in which case investors will lose 1% for every 1% that the lesser-performing stock finishes below its initial share price.

RBC Capital Markets, LLC is the underwriter.

The notes will price Dec. 21.

The Cusip number is 78012KXP7.

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