RBC plans to sell 0% Stars due 2012 linked to S&P 500 via Merrill

By Marisa Wong

Madison, Wis., July 28 - Royal Bank of Canada plans to price 0% Strategic Accelerated Redemption Securities due September 2012 linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

The notes will be called at par of $10 plus a call premium of 6% to 10% per year if the index closes at or above the initial level on any observation date. The exact call premium will be set at pricing.

If the notes are not called and the final index level is at least 95% of the initial index level, the payout at maturity will be par. Investors will lose 1% for every 1% decline beyond 5%.

The securities will price in August and settle in September.

Bank of America Merrill Lynch is the agent.

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