RBC plans one-year Stars tied to Russell 2000 index via Merrill Lynch

By Marisa Wong

Madison, Wis., Sept. 3 - Royal Bank of Canada plans to price 0% Strategic Accelerated Redemption Securities due October 2014 linked to the Russell 2000 index, according to an FWP filing with the Securities and Exchange Commission.

BofA Merrill Lynch will be the agent.

If the index closes at or above its initial level on any quarterly observation date beginning six months after the pricing date, the notes will be called at par of $10 plus an annualized call premium of 7% to 11%. The exact call premium will be set at pricing.

If the notes are not called and the index finishes at or above the 95% threshold level, the payout at maturity will be par. Investors will be exposed to any index decline beyond 5%.

The notes will price in September and settle in October.

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