New Issue: Royal Bank of Canada issues $1 billion of 7.5% limited recourse capital notes

By Mary-Katherine Stinson

Lexington, Ky., April 18 – Royal Bank of Canada priced $1 billion of 7.5% limited recourse capital notes due 2084 at par, according to an FWP filed with the Securities and Exchange Commission.

Starting on May 2, 2029 and on every fifth anniversary until May 2, 2079, the interest rate resets to Treasuries plus 288.7 basis points.

They will be callable in whole at par plus interest on the initial interest reset date and on every quarterly interest payment date after.

The non-viability contingent capital subordinated notes are intended to qualify as the company’s additional tier 1 capital.

They are not subject to bail-in conversion under the Canadian bail-in regime.

RBC Capital Markets LLC, BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, MUFG Securities Americas Inc. and UBS Securities LLC are the lead managers and joint bookrunners for the notes. Lloyds Securities Inc., Santander US Capital Markets LLC, U.S. Bancorp Investments, Inc. and Truist Securities, Inc. are the passive bookrunners.

The company is also concurrently issuing series BV perpetual preferreds at a price of $1,000 per share. They will not be redeemable before 2029, which is the initial reset date.

The series BV preferred shares will be issued to the limited recourse trustee, who will hold legal title. No underwriter has been involved in the issuance of the series BV preferred shares.

Proceeds from the notes will be used for general business purposes. There will be no proceeds generated from the issuance of the series BV preferreds.

The financial services company is based in Toronto.

Issuer:	Royal Bank of Canada
Trade date:	April 17
Settlement date:	April 24
Limited recourse capital notes
Amount:	$1 billion
Issue:	Limited recourse capital notes, series 4
Maturity:	May 2, 2084
Bookrunners:	RBC Capital Markets LLC, BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, MUFG Securities Americas Inc. and UBS Securities LLC
Passive bookrunners:	Lloyds Securities Inc., Santander US Capital Markets LLC, U.S. Bancorp Investments, Inc. and Truist Securities, Inc.
Co-managers:	ANZ Securities, Inc., BBVA Securities Inc., BNY Mellon Capital Markets, LLC, Credit Agricole Securities (USA) Inc., Capital One Securities, Inc., Comerica Securities, Inc., Commonwealth Bank of Australia, Fifth Third Securities, Inc., Huntington Securities, Inc., KeyBanc Capital Markets Inc., M&T Securities, Inc., nabSecurities, LLC, National Bank of Canada Financial Inc., NatWest Markets Securities Inc., Rabo Securities USA, Inc., Regions Securities LLC, SG Americas Securities, LLC, Scotia Capital (USA) Inc. and Westpac Banking Corp.
Trustee:	Bank of New York Mellon
Counsel to issuer:	Sullivan & Cromwell LLP (New York law) and Osler, Hoskin & Harcourt LLP (Canadian law and Ontario law)
Counsel to underwriters:	Davis Polk & Wardwell LLP
Coupon:	7.5% initially; resets on May 2, 2029 and on every fifth anniversary until May 2, 2079 to Treasuries plus 288.7 bps
Price:	Par
Yield:	7.5%
Spread:	Treasuries plus 288.7 bps
Call features:	In whole at par on the initial interest reset date and on every quarterly interest payment date after
Price talk:	7.875% area
Cusip:	780082AR4
Preferred shares
Issue:	Non-cumulative five-year fixed rate reset first preferred shares, series BV
Amount:	$1 billion
Maturity:	Perpetual
Limited recourse trustee:	Computershare Trust Co. of Canada
Price:	$1,000 per preferred share
Call features:	In whole beginning May 2, 2029 and on every quarterly interest payment date after
Cusip:	780082AS2

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