RBC to price direct investment notes linked to EquityCompass strategy

By Angela McDaniels

Tacoma, Wash., Feb. 10 - Royal Bank of Canada plans to price 0% direct investment notes due April 8, 2011 linked to the EquityCompass Equity Risk Management Strategy, according to a 424B2 filing with the Securities and Exchange Commission.

The strategy seeks to offer exposure to U.S. large-cap stocks while reducing the downside risk of such an investment. It uses a set of rules to construct a theoretical portfolio of different combinations of cash and a long or short position in the S&P 500 Total Return index.

The initial investment in the hypothetical portfolio is $981 per $1,000 principal amount of notes. RBC will reduce this by 0.15% on the pricing date and each time the portfolio is reallocated, which occurs monthly.

The payout at maturity will be the final value of the portfolio.

If the portfolio value is less than or equal to 50% of its initial value on any day during the life of the notes, the notes will be called, and the payout will be the value of the portfolio on the first trading day following the call trigger date.

The notes will price March 3 and settle March 8.

RBC Capital Markets Corp. is the underwriter.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.