RBC plans contingent coupon callable yield notes tied to Valero Energy

By Toni Weeks

San Luis Obispo, Calif., July 3 – Royal Bank of Canada plans to price contingent coupon callable yield notes due July 14, 2016 linked to the common stock of Valero Energy Corp., according to a 424B2 with the Securities and Exchange Commission.

The notes will pay a contingent quarterly coupon at an annual rate of at least 11.6% if the stock closes at or above its coupon barrier – 75% of the initial share price – on any quarterly observation date.

The notes will be callable at par plus the contingent coupon on any quarterly interest payment date beginning Oct. 15.

The payout at maturity will be par unless the stock finishes below its 75% knock-in level, in which case investors will receive a number of Valero shares equal to $1,000 divided by the initial stock price or, at the issuer’s option, the cash value of those shares.

RBC Capital Markets, LLC and Barclays are the agents.

The notes will price July 9 and settle July 14.

The Cusip number is 78010UM87.

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