Published on 7/10/2014 in the Prospect News Structured Products Daily.
New Issue: RBC prices $8.03 million contingent coupon callable yield notes tied to Valero Energy
By Toni Weeks
San Luis Obispo, Calif., July 10 – Royal Bank of Canada priced $8.03 million of 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 12% 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.
| Issuer: | Royal Bank of Canada
|
| Issue: | Contingent coupon callable yield notes
|
| Underlying stock: | Valero Energy Corp. (NYSE: VLO)
|
| Amount: | $8,031,000
|
| Maturity: | July 14, 2016
|
| Coupon: | 12% per year, payable quarterly, if stock closes at or above barrier level on quarterly observation date
|
| Price: | Par
|
| Payout at maturity: | Par unless stock finishes below knock-in level, in which case a number of Valero shares equal to $1,000 divided by initial stock price or, at issuer’s option, the cash value of those shares
|
| Call option: | At par plus contingent coupon, if any, on any interest payment date beginning Oct. 15
|
| Initial price: | $49.28
|
| Barrier/knock-in level: | $36.96, 75% of initial price
|
| Pricing date: | July 9
|
| Settlement date: | July 14
|
| Agents: | RBC Capital Markets, LLC and Barclays
|
| Fees: | 1.75%
|
| Cusip: | 78010UM87
|
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