By Angela McDaniels
Tacoma, Wash., Aug. 7 - Royal Bank of Canada priced $1.58 million of 0% direct investment notes due Sept. 10, 2013 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. On the pricing date, 100% of this amount was allocated to a long position in the index and none to cash. RBC will reduce the investment by 0.15% on the pricing date, each time the portfolio is reallocated, which occurs monthly, and on the final valuation date.
The payout at maturity will be the final value of the portfolio.
If the portfolio value is less than or equal to 50% of the initial investment 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.
RBC Capital Markets, LLC is the underwriter.
| Issuer: | Royal Bank of Canada
|
| Issue: | Direct investment notes
|
| Underlying: | EquityCompass Equity Risk Management Strategy
|
| Amount: | $1,575,000
|
| Maturity: | Sept. 10, 2013
|
| Coupon: | 0%
|
| Price: | Par
|
| Payout at maturity: | A cash amount equal to the final value of the portfolio underlying the strategy; initial investment is $981 per note
|
| Call: | Automatically if portfolio value falls to or below 50% of initial investment on any day; payout is cash amount equal to value of portfolio on following day
|
| Pricing date: | Aug. 3
|
| Settlement date: | Aug. 8
|
| Underwriter: | RBC Capital Markets, LLC
|
| Fees: | 1.4%
|
| Cusip: | 78008SDG8
|
© 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.
