Korea Fund SEC Filings

Royal Bank of Canada ("RBC") is marketing a new structured note offering — Dual Directional Buffer Digital Notes linked to the S&P 500 Index. The securities are senior unsecured debt of the Bank, issued under its Series J GMTN program.

Key economics: Investors pay $1,000 per Note on the 25 Jul 2025 Issue Date and receive the redemption amount on 27 Aug 2026 (≈ 13-month tenor). The payoff is determined as follows:

• Digital component: If the Final Index level is ≥ 93 % of the initial level, the Note pays $1,070 (fixed 7 % Digital Return), regardless of how high the S&P 500 rises.
• Dual-direction buffer: If the Final Index level is < 93 % but ≥ 86 %, the Note pays $1,000 plus the absolute value of the index decline (1 % per 1 % drop) up to a maximum of 14 %. Thus a 10 % index loss yields $1,100.
• Principal at risk: Below the 86 % Buffer Value, investors lose principal at a rate of 1 % for each 1 % index loss beyond the 14 % buffer (e.g., a 50 % decline produces $640, a 36 % loss).

The Notes do not pay periodic interest, are not listed on any exchange, and all payments depend on RBC’s creditworthiness.

Pricing & fees: Public offer price is 100 % of face; RBC Capital Markets receives a 1 % underwriting discount and may pay up to $10 per $1,000 in concessions and $4.30 in referral fees. The initial estimated value is expected between $939–$989, reflecting dealer margin, hedging costs and RBC’s lower internal funding rate.

Material risks highlighted: limited upside (7 % cap), credit risk of the issuer, potential loss of principal below the buffer, illiquid secondary market, uncertain U.S. tax treatment, and conflicts of interest because RBC (through RBCCM) acts as both counterparty and calculation agent.

Overall, the product is designed for yield-seeking investors with a short-term horizon who are moderately bullish-to-range-bound on the S&P 500 yet willing to accept issuer credit exposure and capped upside in exchange for a 14 % downside cushion.