RBC to price Stars linked to Russell 2000 index via Merrill Lynch

By Angela McDaniels

Tacoma, Wash., Feb. 25 - Royal Bank of Canada plans to price one-year 0% Strategic Accelerated Redemption Securities linked to the Russell 2000 index, according to an FWP filing with the Securities and Exchange Commission.

If the index closes at or above the initial index level on any of three observation dates, the notes will be called at par of $10 plus a premium of 9% to 13% per year. The observation dates are expected to fall in September 2011, December 2011 and March 2012. The exact premium and dates will be set at pricing.

The payout at maturity will be par if the final index level is at least 95% of the initial index level. Investors will be exposed to any decline below the threshold level.

The notes will price in March or April.

Merrill Lynch, Pierce, Fenner & Smith Inc. is the agent.

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