RBC offers $5M callable notes tied to 10‑Yr SOFR swap rate
Rhea-AI Filing Summary
Royal Bank of Canada is offering Redeemable Range Accrual Notes linked to the 10‑Year U.S. Dollar SOFR ICE Swap Rate, with a total offering size of $5,000,000. The price to the public is 100.00%, underwriting discounts are 0.40% ($20,000), and proceeds to the issuer are $4,980,000. The initial estimated value is $980.50 per $1,000.
Interest for each period equals 5.75% multiplied by the fraction of Accrual Days, defined as days when the reference rate is between the Lower Barrier 0.00% and Upper Barrier 4.50%. Interest is paid quarterly starting January 30, 2026, with maturity on October 30, 2030, unless redeemed.
The Notes are callable at the issuer’s option, in whole, on the October 30, 2026 interest date and on each quarterly interest date thereafter, paying principal plus any accrued interest. Denominations are $1,000 and integral multiples. All payments are subject to issuer credit risk, with RBCCM as calculation agent and a 30/360 day count.
Positive
- None.
Negative
- None.
Insights
$5M callable range‑accrual notes; interest depends on SOFR swap band.
The notes pay interest at 5.75% times the proportion of days the 10‑Year USD SOFR ICE Swap Rate stays within 0.00%–4.50%. If all days qualify, the per‑annum rate reaches 5.75%; fewer Accrual Days reduce interest. Quarterly payments begin on
The issuer may redeem in whole on
Key dependencies are the reference rate’s path and call decisions. Secondary market values can be below the offering price, and all payments depend on Royal Bank of Canada credit. Actual outcomes will follow disclosed methodologies, including the 30/360 convention and RBCCM’s calculation role.
 |
Registration Statement No. 333-275898 Filed Pursuant to Rule 424(b)(2) |
|
Pricing Supplement
Pricing Supplement dated October 28, 2025 to the Prospectus dated December 20, 2023, the Prospectus Supplement dated December 20, 2023 and the Product Supplement No. 1B dated July 22, 2025 |
$5,000,000 Redeemable Range Accrual Notes Based on the 10-Year U.S. Dollar SOFR ICE Swap Rate, Due October 30, 2030
Royal Bank of Canada | |
Royal Bank of Canada is offering the Redeemable Range Accrual Notes Based on the 10-Year U.S. Dollar SOFR ICE Swap Rate (the “Notes”) described below.
| · | The Notes will accrue interest, payable quarterly, at a rate equal to 5.75% per annum, but only on each calendar day for which the Reference Rate is (a) greater than or equal to the Lower Barrier of 0.00% per annum and (b) less than or equal to the Upper Barrier of 4.50% per annum. You may not receive any interest payments during the term of the Notes. |
| · | We may redeem the Notes in whole, but not in part, as described under “Key Terms” below. |
| · | The Reference Rate is the 10-Year U.S. Dollar SOFR ICE Swap Rate. |
| · | Any payments on the Notes are subject to our credit risk. |
| · | The Notes will not be listed on any securities exchange. |
CUSIP: 78014RL99
Investing in the Notes involves a number of risks. See “Selected Risk Considerations” beginning on page P-6 of this pricing supplement and “Risk Factors” in the accompanying prospectus, prospectus supplement and product supplement.
None of the Securities and Exchange Commission (the “SEC”), any state securities commission or any other regulatory body has approved or disapproved of the Notes or passed upon the adequacy or accuracy of this pricing supplement. Any representation to the contrary is a criminal offense. The Notes will not constitute deposits insured by the Canada Deposit Insurance Corporation, the U.S. Federal Deposit Insurance Corporation or any other Canadian or U.S. governmental agency or instrumentality. The Notes are not bail-inable notes and are not subject to conversion into our common shares under subsection 39.2(2.3) of the Canada Deposit Insurance Corporation Act.
|
Per Note |
Total | |
| Price to public(1) | 100.00% | $5,000,000 |
| Underwriting discounts and commissions(1) |
0.40% |
$20,000 |
| Proceeds to Royal Bank of Canada | 99.60% | $4,980,000 |
(1) RBC Capital Markets, LLC will purchase the Notes from us on the Issue Date at purchase prices between $996.00 and $1,000.00 per $1,000 principal amount of Notes, and will pay all or a portion of its underwriting discount of up to $4.00 per $1,000 principal amount of Notes to certain selected broker-dealers as a selling concession. Certain dealers who purchase the Notes for sale to certain fee-based advisory accounts and/or eligible institutional investors may forgo some or all of their selling concessions, fees or commissions. The public offering price for investors purchasing the Notes in these accounts and/or for an eligible institutional investor may be as low as $996.00 per $1,000 principal amount of Notes. See “Supplemental Plan of Distribution (Conflicts of Interest)” below.
The initial estimated value of the Notes determined by us as of the Pricing Date, which we refer to as the initial estimated value, is $980.50 per $1,000 principal amount of Notes and is less than the public offering price of the Notes. The market value of the Notes at any time will reflect many factors, cannot be predicted with accuracy and may be less than this amount. We describe the determination of the initial estimated value in more detail below.
RBC Capital Markets, LLC
| Redeemable Range Accrual Notes Based on the 10-Year U.S. Dollar SOFR ICE Swap Rate |
KEY TERMS
The information in this “Key Terms” section is qualified by any more detailed information set forth in this pricing supplement and in the accompanying prospectus, prospectus supplement and product supplement.
| Issuer: | Royal Bank of Canada |
| Underwriter: | RBC Capital Markets, LLC (“RBCCM”) |
| Minimum Investment: | $1,000 and minimum denominations of $1,000 in excess thereof |
| Pricing Date: | October 28, 2025 |
| Issue Date: | October 30, 2025 |
| Maturity Date:* | October 30, 2030 |
| Interest Rate: | For each Interest Period, a per annum rate calculated as follows: |
| 5.75% × | the actual number of Accrual Days in that Interest Period | ||
| the actual number of calendar days in that Interest Period |
| where an “Accrual Day” means a calendar day for which the Reference Rate is (a) greater than or equal to the Lower Barrier and (b) less than or equal to the Upper Barrier | |
| Lower Barrier: | 0.00% per annum |
| Upper Barrier: | 4.50% per annum |
| Reference Rate: |
With respect to any relevant day, the Reference Rate will be the 10-Year U.S. Dollar SOFR ICE Swap Rate, determined as set forth under “General Terms of the Notes—Reference Rates—U.S. Dollar SOFR ICE Swap Rate” in the accompanying product supplement, for that day, provided that, if any day is not a U.S. Government Securities Business Day, the Reference Rate for that day will be the 10-Year U.S. Dollar SOFR ICE Swap Rate for the immediately preceding U.S. Government Securities Business Day. Notwithstanding the foregoing, for each day from and including the fifth U.S. Government Securities Business Day immediately preceding an Interest Payment Date to but excluding that Interest Payment Date, the Reference Rate will be the 10-Year U.S. Dollar SOFR ICE Swap Rate for the fifth U.S. Government Securities Business Day immediately preceding that Interest Payment Date. |
| Interest Payment Dates:* | Quarterly, on the 30th calendar day of January, April, July and October of each year, beginning on January 30, 2026 and ending on the Maturity Date. If an Interest Payment Date is not a business day, interest will be paid on the next business day, without adjustment to the end date of the relevant Interest Period, and no additional interest will be paid in respect of the postponement. |
| Interest Period: | Each period from and including an Interest Payment Date (or, for the first Interest Period, the Issue Date) to but excluding the next following Interest Payment Date |
| Payment at Maturity: |
If the Notes are not redeemed at our option, we will pay you the principal amount, together with any applicable interest payment, on the Maturity Date. All payments on the Notes are subject to our credit risk.
|
| P-2 | RBC Capital Markets, LLC |
| Redeemable Range Accrual Notes Based on the 10-Year U.S. Dollar SOFR ICE Swap Rate |
| Redemption: | The Notes are redeemable at our option, in whole, but not in part, on any Call Date upon 10 business days’ prior written notice. If we redeem the Notes, we will pay you the principal amount, together with any applicable interest payment, on the relevant Call Date. No further payments will be made on the Notes. |
| Call Dates:* | The Interest Payment Date scheduled to occur on October 30, 2026 and each Interest Payment Date thereafter |
| Day Count Convention: | 30 / 360 |
| Calculation Agent: | RBCCM |
* Subject to postponement. See “General Terms of the Notes—Postponement of a Payment Date” in the accompanying product supplement.
| P-3 | RBC Capital Markets, LLC |
| Redeemable Range Accrual Notes Based on the 10-Year U.S. Dollar SOFR ICE Swap Rate |
ADDITIONAL TERMS OF YOUR NOTES
You should read this pricing supplement together with the prospectus dated December 20, 2023, as supplemented by the prospectus supplement dated December 20, 2023, relating to our Senior Global Medium-Term Notes, Series J, of which the Notes are a part, and the product supplement no. 1B dated July 22, 2025. This pricing supplement, together with these documents, contains the terms of the Notes and supersedes all other prior or contemporaneous oral statements as well as any other written materials, including preliminary or indicative pricing terms, correspondence, trade ideas, structures for implementation, sample structures, fact sheets, brochures or other educational materials of ours.
We have not authorized anyone to provide any information or to make any representations other than those contained or incorporated by reference in this pricing supplement and the documents listed below. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. These documents are an offer to sell only the Notes offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in each such document is current only as of its date.
If the information in this pricing supplement differs from the information contained in the documents listed below, you should rely on the information in this pricing supplement.
You should carefully consider, among other things, the matters set forth in “Selected Risk Considerations” in this pricing supplement and “Risk Factors” in the documents listed below, as the Notes involve risks not associated with conventional debt securities. We urge you to consult your investment, legal, tax, accounting and other advisers before you invest in the Notes.
You may access these documents on the SEC website at www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date on the SEC website):
| · | Prospectus dated December 20, 2023: |
https://www.sec.gov/Archives/edgar/data/1000275/000119312523299520/d645671d424b3.htm
| · | Prospectus Supplement dated December 20, 2023: |
https://www.sec.gov/Archives/edgar/data/1000275/000119312523299523/d638227d424b3.htm
| · | Product Supplement No. 1B dated July 22, 2025: |
https://www.sec.gov/Archives/edgar/data/1000275/000095010325009131/dp231901_424b2-opsn1b.htm
Our Central Index Key, or CIK, on the SEC website is 1000275. As used in this pricing supplement, “Royal Bank of Canada,” the “Bank,” “we,” “our” and “us” mean only Royal Bank of Canada.
| P-4 | RBC Capital Markets, LLC |
| Redeemable Range Accrual Notes Based on the 10-Year U.S. Dollar SOFR ICE Swap Rate |
HYPOTHETICAL INTEREST RATES
The table set forth below illustrates the hypothetical per annum Interest Rate for an Interest Period, based on a hypothetical number of Accrual Days and calendar days in that Interest Period. The table is only for illustrative purposes and may not show the actual Interest Rates applicable to investors.
| Hypothetical Number of Accrual Days | Hypothetical Number of Calendar Days | Hypothetical Per Annum Interest Rate |
| 90 | 90 | 5.750% |
| 75 | 90 | 4.792% |
| 60 | 90 | 3.833% |
| 45 | 90 | 2.875% |
| 30 | 90 | 1.917% |
| 15 | 90 | 0.958% |
| 0 | 90 | 0.000% |
| P-5 | RBC Capital Markets, LLC |
| Redeemable Range Accrual Notes Based on the 10-Year U.S. Dollar SOFR ICE Swap Rate |
SELECTED RISK CONSIDERATIONS
An investment in the Notes involves risks not associated with an investment in ordinary floating rate notes. We urge you to consult your investment, legal, tax, accounting and other advisers before you invest in the Notes. Some of the risks that apply to an investment in the Notes are summarized below, but we urge you to read also the “Risk Factors” sections of the accompanying prospectus, prospectus supplement and product supplement. You should not purchase the Notes unless you understand and can bear the risks of investing in the Notes.
Risks Relating to the Terms and Structure of the Notes
| · | The Notes May Pay a Below-Market Rate or No Interest at All on One or More Interest Payment Dates — Interest will accrue on the Notes only on each Accrual Day, which is a calendar day for which the Reference Rate is (a) greater than or equal to the Lower Barrier and (b) less than or equal to the Upper Barrier. If there are no Accrual Days during an Interest Period, no interest will be payable with respect to that Interest Period. You may not receive any interest payments during the term of the Notes. Your return may be less than the return you would earn if you purchased one of our conventional senior interest-bearing debt securities. |
| · | The Interest Rate on the Notes Will Be Capped — The Notes will bear interest at a variable rate that will not exceed 5.75% per annum. |
| · | The Notes Are Subject to the Risk of an Early Redemption — We have the option to redeem the Notes on the Call Dates set forth above. It is more likely that we will redeem the Notes prior to the Maturity Date to the extent that the interest payable on the Notes is greater than the interest that would be payable on our other instruments of a comparable maturity, terms and credit rating trading in the market. If the Notes are redeemed prior to the Maturity Date, you may have to re-invest the proceeds in a lower rate environment, and you will not receive any further payments on the Notes. |
| · | 10-Year U.S. Dollar SOFR ICE Swap Rate Levels Will Be Unequally Weighted in Determining the Interest Rate for Each Interest Period — If any day is not a U.S. Government Securities Business Day, the Reference Rate for that day will be the 10-Year U.S. Dollar SOFR ICE Swap Rate for the immediately preceding U.S. Government Securities Business Day. In addition, for each day from and including the fifth U.S. Government Securities Business Day immediately preceding an Interest Payment Date to but excluding that Interest Payment Date, the Reference Rate will be the 10-Year U.S. Dollar SOFR ICE Swap Rate for the fifth U.S. Government Securities Business Day immediately preceding that Interest Payment Date. As a result, 10-Year U.S. Dollar SOFR ICE Swap Rate levels will be unequally weighted in determining the Interest Rate for each Interest Period. This could reduce the Interest Rate for one or more Interest Periods if a 10-Year U.S. Dollar SOFR ICE Swap Rate level referenced for multiple calendar days is below the Lower Barrier or above the Upper Barrier. |
| · | Payments on the Notes Are Subject to Our Credit Risk, and Market Perceptions about Our Creditworthiness May Adversely Affect the Market Value of the Notes — The Notes are our senior unsecured debt securities, and your receipt of any amounts due on the Notes is dependent upon our ability to pay our obligations as they come due. If we were to default on our payment obligations, you may not receive any amounts owed to you under the Notes and you could lose your entire investment. In addition, any negative changes in market perceptions about our creditworthiness may adversely affect the market value of the Notes. |
Risks Relating to the Initial Estimated Value of the Notes and the Secondary Market for the Notes
| · | There May Not Be an Active Trading Market for the Notes; Sales in the Secondary Market May Result in Significant Losses — There may be little or no secondary market for the Notes. The Notes will not be listed on any securities exchange. RBCCM and our other affiliates may make a market for the Notes; however, they are not required to do so and, if they choose to do so, may stop any market-making activities at any time. Because other dealers are not likely to make a secondary market for the Notes, the price at which you may be able to trade your Notes is likely to depend on the price, if any, at which RBCCM or any of our other affiliates is willing to buy the Notes. Even if a secondary market for the Notes develops, it may not provide enough liquidity to allow you to easily trade or sell the Notes. We expect that transaction costs in any secondary market would be high. As a result, the difference between bid and ask prices for your Notes in any secondary market could be substantial. If you sell your Notes before maturity, you may |
| P-6 | RBC Capital Markets, LLC |
| Redeemable Range Accrual Notes Based on the 10-Year U.S. Dollar SOFR ICE Swap Rate |
have to do so at a substantial discount from the price that you paid for them, and as a result, you may suffer significant losses. The Notes are not designed to be short-term trading instruments. Accordingly, you should be able and willing to hold your Notes to maturity.
| · | The Initial Estimated Value of the Notes Is Less Than the Public Offering Price — The initial estimated value of the Notes is less than the public offering price of the Notes and does not represent a minimum price at which we, RBCCM or any of our other affiliates would be willing to purchase the Notes in any secondary market (if any exists) at any time. If you attempt to sell the Notes prior to maturity, their market value may be lower than the price you paid for them and the initial estimated value. This is due to, among other things, changes in the level of the Reference Rate, our credit ratings and financial condition, the internal funding rate we pay to issue securities of this kind (which is lower than the rate at which we borrow funds by issuing conventional fixed rate debt) and the inclusion in the public offering price of the underwriting discount, our estimated profit and the estimated costs relating to our hedging of the Notes. These factors, together with various credit, market and economic factors over the term of the Notes, are expected to reduce the price at which you may be able to sell the Notes in any secondary market and will affect the value of the Notes in complex and unpredictable ways. Assuming no change in market conditions or any other relevant factors, the price, if any, at which you may be able to sell your Notes prior to maturity may be less than your original purchase price, as any such sale price would not be expected to include the underwriting discount, our estimated profit or the hedging costs relating to the Notes. In addition, any price at which you may sell the Notes is likely to reflect customary bid-ask spreads for similar trades. In addition to bid-ask spreads, the value of the Notes determined for any secondary market price is expected to be based on a secondary market rate rather than the internal funding rate used to price the Notes and determine the initial estimated value. As a result, the secondary market price will be less than if the internal funding rate were used. |
| · | The Initial Estimated Value of the Notes Is Only an Estimate, Calculated as of the Pricing Date — The initial estimated value of the Notes is based on the value of our obligation to make the payments on the Notes, together with the mid-market value of the derivative embedded in the terms of the Notes. See “Structuring the Notes” below. Our estimate is based on a variety of assumptions, including our internal funding rate (which represents a discount from our credit spreads), expectations as to interest rates and volatility and the expected term of the Notes. These assumptions are based on certain forecasts about future events, which may prove to be incorrect. Other entities may value the Notes or similar securities at a price that is significantly different than we do. The value of the Notes at any time after the Pricing Date will vary based on many factors, including changes in market conditions, and cannot be predicted with accuracy. As a result, the actual value you would receive if you sold the Notes in any secondary market, if any, should be expected to differ materially from the initial estimated value of the Notes. |
Risks Relating to Conflicts of Interest and Our Trading Activities
| · | Our and Our Affiliates’ Business and Trading Activities May Create Conflicts of Interest — You should make your own independent investigation of the merits of investing in the Notes. Our and our affiliates’ economic interests are potentially adverse to your interests as an investor in the Notes due to our and our affiliates’ business and trading activities, and we and our affiliates have no obligation to consider your interests in taking any actions that might affect the value of the Notes. Trading by us and our affiliates may adversely affect the level of the Reference Rate and the market value of the Notes. See “Risk Factors—Risks Relating to Conflicts of Interest” in the accompanying product supplement. |
| · | RBCCM’s Role as Calculation Agent May Create Conflicts of Interest — As Calculation Agent, our affiliate, RBCCM, will determine any levels of the Reference Rate and make any other determinations necessary to calculate any payments on the Notes. In making these determinations, the Calculation Agent may be required to make discretionary judgments, including those described under “—Risks Relating to the Reference Rate” below. In making these discretionary judgments, the economic interests of the Calculation Agent are potentially adverse to your interests as an investor in the Notes, and any of these determinations may adversely affect any payments on the Notes. The Calculation Agent will have no obligation to consider your interests as an investor in the Notes in making any determinations with respect to the Notes. |
| P-7 | RBC Capital Markets, LLC |
| Redeemable Range Accrual Notes Based on the 10-Year U.S. Dollar SOFR ICE Swap Rate |
Risks Relating to the Reference Rate
| · | The Reference Rate Will Be Affected by a Number of Factors and May Be Volatile — Many factors may affect the Reference Rate including, but not limited to: |
| · | supply and demand for overnight U.S. Treasury repurchase agreements; |
| · | sentiment regarding underlying strength in the U.S. and global economies; |
| · | expectations regarding the level of price inflation; |
| · | sentiment regarding credit quality in the U.S. and global credit markets; |
| · | central bank policy regarding interest rates; |
| · | inflation and expectations concerning inflation; |
| · | performance of capital markets; and |
| · | any statements from public government officials regarding the cessation of the Reference Rate. |
These and other factors may have a negative impact on the payments on the Notes and on the value of the Notes in the secondary market. Additionally, these factors may cause the Reference Rate to be volatile, and volatility of the Reference Rate may adversely affect your return on the Notes.
| · | The Reference Rate and the Secured Overnight Financing Rate Have Limited Historical Information, and Future Performance Cannot Be Predicted Based on Historical Performance — The publication of the U.S. Dollar SOFR ICE Swap Rates began in November 2021 and, therefore, has a limited history. ICE Benchmark Administration (“IBA”) launched the U.S. Dollar SOFR ICE Swap Rates for use as reference rates for financial instruments in order to aid the market’s transition to the Secured Overnight Financing Rate (“SOFR”) and away from LIBOR. However, the composition and characteristics of SOFR differ from those of LIBOR in material respects, and the historical performance of LIBOR and the U.S. Dollar LIBOR ICE Swap Rates will have no bearing on the performance of SOFR or the Reference Rate. |
In addition, the publication of SOFR began in April 2018, and, therefore, it has a limited history. The future performance of the Reference Rate and SOFR cannot be predicted based on the limited historical performance. The levels of the Reference Rate and SOFR during the term of the Notes may have little or no relation to the historical data.
| · | The Reference Rate and SOFR and the Manner in Which They Are Calculated May Change in the Future — There can be no assurance that the methods by which the Reference Rate and SOFR are calculated will continue in their current form. Any changes in the method of calculation of the Reference Rate or SOFR could reduce the amount payable on the Notes. |
| · | The Reference Rate May Be Determined by the Calculation Agent in Its Sole Discretion or, if It Is Discontinued or Ceased to Be Published Permanently or Indefinitely, Replaced by a Successor or Substitute Rate — If no relevant rate appears on the applicable Bloomberg screen on a relevant day at approximately 11:00 a.m., New York City time, then the Calculation Agent will have the discretion to determine the Reference Rate for that day. |
Notwithstanding the foregoing, if the Calculation Agent determines in its sole discretion on or prior to the relevant day that the relevant rate for U.S. dollar swaps referencing SOFR has been discontinued or that rate has ceased to be published permanently or indefinitely, then the Calculation Agent will use as the Reference Rate for that day a substitute or successor rate that it has determined to be a commercially reasonable replacement rate. If the Calculation Agent has determined a substitute or successor rate in accordance with the foregoing, the Calculation Agent may determine in its sole discretion to make adjustments to the definitions of business day and interest determination date and any other relevant methodology for calculating that substitute or successor rate, including any adjustment factor, spread and/or
| P-8 | RBC Capital Markets, LLC |
| Redeemable Range Accrual Notes Based on the 10-Year U.S. Dollar SOFR ICE Swap Rate |
formula it determines is needed to make that substitute or successor rate comparable to the relevant rate for U.S. dollar swaps referencing SOFR.
Any of the foregoing determinations or actions by the Calculation Agent could result in adverse consequences to the level of the Reference Rate used on the applicable interest determination date, which could adversely affect the return on and the market value of the Notes.
| P-9 | RBC Capital Markets, LLC |
| Redeemable Range Accrual Notes Based on the 10-Year U.S. Dollar SOFR ICE Swap Rate |
INFORMATION REGARDING THE REFERENCE RATE
The Reference Rate on any date of determination is the swap rate for a fixed-for-floating U.S. Dollar SOFR-linked interest rate swap transaction with a ten-year maturity, that appears on Bloomberg screen USISSO10 as of 11:00 a.m. (New York City time) on that date, as determined by the Calculation Agent. The Reference Rate is subject to the provisions set forth under “General Terms of the Notes—Reference Rates—U.S. Dollar SOFR ICE Swap Rate” in the accompanying product supplement. In a fixed-for-floating U.S. Dollar SOFR-linked interest rate swap transaction, one party pays a fixed rate (the “swap rate”) and the other pays a floating rate based on SOFR, compounded in arrears for 12 months using standard market conventions. SOFR is intended to be a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities.
Historical Information
The following graph sets forth historical levels of the Reference Rate for the period from November 18, 2021 to October 28, 2025. We obtained the information in the graph from Bloomberg Financial Markets, without independent investigation.
10-Year U.S. Dollar SOFR ICE Swap Rate
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
| P-10 | RBC Capital Markets, LLC |
| Redeemable Range Accrual Notes Based on the 10-Year U.S. Dollar SOFR ICE Swap Rate |
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
You should review carefully the section in the accompanying product supplement entitled “United States Federal Income Tax Considerations.” The following discussion, when read in combination with that section, constitutes the full opinion of our counsel, Davis Polk & Wardwell LLP, regarding the material U.S. federal income tax consequences of owning and disposing of the Notes.
Generally, this discussion assumes that you purchased the Notes for cash in the original issuance at the stated issue price and does not address other circumstances specific to you.
We intend to treat the Notes for U.S. federal income tax purposes as “variable rate debt instruments,” as described in the section entitled “United States Federal Income Tax Considerations—Tax Consequences to U.S. Holders—Notes Treated as Debt Instruments—Notes Treated as Variable Rate Debt Instruments—Interest on VRDIs That Provide for a Single Variable Rate” in the accompanying product supplement. In the opinion of our counsel, which is based on current market conditions and representations provided by us, this treatment of the Notes is reasonable under current law. Under this treatment, all stated interest on the Notes will be taxable to you as ordinary interest income at the time it accrues or is received in accordance with your method of tax accounting.
If the Notes were not treated as variable rate debt instruments, they would instead be treated as “contingent payment debt instruments.” In that case, (i) you would be required to recognize interest income based on our “comparable yield” for a similar non-contingent debt instrument and a “projected payment schedule” in respect of the Notes, adjusted each year to take account for the difference between the actual and the projected payments in that year, and (ii) you generally must treat any gain on a taxable disposition as interest income and any loss as ordinary loss to the extent of previous interest inclusions, with the balance treated as capital loss. See the section entitled “United States Federal Income Tax Considerations—Tax Consequences to U.S. Holders—Notes Treated as Debt Instruments—Notes Treated as Contingent Payment Debt Instruments” in the accompanying product supplement.
You should consult your tax adviser regarding the U.S. federal income tax consequences of an investment in the Notes, as well as tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.
SUPPLEMENTAL PLAN OF DISTRIBUTION (CONFLICTS OF INTEREST)
After the initial offering of the Notes, the public offering price of the Notes may change.
The value of the Notes shown on your account statement may be based on RBCCM’s estimate of the value of the Notes if RBCCM or another of our affiliates were to make a market in the Notes (which it is not obligated to do). That estimate will be based on the price that RBCCM may pay for the Notes in light of then-prevailing market conditions, our creditworthiness and transaction costs. For a period of approximately six months after the Issue Date, the value of the Notes that may be shown on your account statement may be higher than RBCCM’s estimated value of the Notes at that time. This is because the estimated value of the Notes will not include the underwriting discount or our hedging costs and profits; however, the value of the Notes shown on your account statement during that period may initially be a higher amount, reflecting the addition of the underwriting discount and our estimated costs and profits from hedging the Notes. This excess is expected to decrease over time until the end of this period. After this period, if RBCCM repurchases your Notes, it expects to do so at prices that reflect their estimated value.
RBCCM or another of its affiliates or agents may use this pricing supplement in the initial sale of the Notes. In addition, RBCCM or another of our affiliates may use this pricing supplement in a market-making transaction in the Notes after their initial sale. Unless we or our agent informs the purchaser otherwise in the confirmation of sale, this pricing supplement is being used in a market-making transaction.
For additional information about the settlement cycle of the Notes, see “Plan of Distribution” in the accompanying prospectus. For additional information as to the relationship between us and RBCCM, see the section “Plan of Distribution—Conflicts of Interest” in the accompanying prospectus.
| P-11 | RBC Capital Markets, LLC |
| Redeemable Range Accrual Notes Based on the 10-Year U.S. Dollar SOFR ICE Swap Rate |
STRUCTURING THE NOTES
The Notes are our debt securities. As is the case for all of our debt securities, including our structured notes, the economic terms of the Notes reflect our actual or perceived creditworthiness. In addition, because structured notes result in increased operational, funding and liability management costs to us, we typically borrow the funds under structured notes at a rate that is lower than the rate that we might pay for a conventional fixed or floating rate debt security of comparable maturity. The lower internal funding rate, the underwriting discount and the hedging-related costs relating to the Notes reduce the economic terms of the Notes to you and result in the initial estimated value for the Notes being less than their public offering price. Unlike the initial estimated value, any value of the Notes determined for purposes of a secondary market transaction may be based on a secondary market rate, which may result in a lower value for the Notes than if our initial internal funding rate were used.
In order to satisfy our payment obligations under the Notes, we may choose to enter into certain hedging arrangements (which may include call options, put options or other derivatives) with RBCCM and/or one of our other subsidiaries. The terms of these hedging arrangements take into account a number of factors, including our creditworthiness, interest rate movements, volatility and the tenor of the Notes. The economic terms of the Notes and the initial estimated value depend in part on the terms of these hedging arrangements.
See “Selected Risk Considerations—Risks Relating to the Initial Estimated Value of the Notes and the Secondary Market for the Notes—The Initial Estimated Value of the Notes Is Less Than the Public Offering Price” above.
VALIDITY OF THE NOTES
In the opinion of Norton Rose Fulbright Canada LLP, as Canadian counsel to the Bank, the issue and sale of the Notes has been duly authorized by all necessary corporate action of the Bank in conformity with the indenture, and when the Notes have been duly executed, authenticated and issued in accordance with the indenture and delivered against payment therefor, the Notes will be validly issued and, to the extent validity of the Notes is a matter governed by the laws of the Province of Ontario or Québec, or the federal laws of Canada applicable therein, will be valid obligations of the Bank, subject to the following limitations: (i) the enforceability of the indenture may be limited by the Canada Deposit Insurance Corporation Act (Canada), the Winding-up and Restructuring Act (Canada) and bankruptcy, insolvency, reorganization, receivership, moratorium, arrangement or winding-up laws or other similar laws of general application affecting the enforcement of creditors’ rights generally; (ii) the enforceability of the indenture is subject to general equitable principles, including the principle that the availability of equitable remedies, such as specific performance and injunction, may only be granted at the discretion of a court of competent jurisdiction; (iii) under applicable limitations statutes generally, including that the enforceability of the indenture will be subject to the limitations contained in the Limitations Act, 2002 (Ontario), and such counsel expresses no opinion as to whether a court may find any provision of the indenture to be unenforceable as an attempt to vary or exclude a limitation period under such applicable limitations statutes; (iv) rights to indemnity and contribution under the Notes or the indenture which may be limited by applicable law; and (v) courts in Canada are precluded from giving a judgment in any currency other than the lawful money of Canada and such judgment may be based on a rate of exchange in existence on a day other than the day of payment, as prescribed by the Currency Act (Canada). This opinion is given as of the date hereof and is limited to the laws of the Provinces of Ontario and Québec and the federal laws of Canada applicable therein. In addition, this opinion is subject to customary assumptions about the trustee’s authorization, execution and delivery of the indenture and the genuineness of signatures and to such counsel’s reliance on the Bank and other sources as to certain factual matters, all as stated in the opinion letter of such counsel dated December 20, 2023, which has been filed as Exhibit 5.3 to the Bank’s Form 6-K filed with the SEC dated December 20, 2023. References to the “indenture” in this paragraph mean the Indenture as defined in the opinion of Norton Rose Fulbright Canada LLP dated December 20, 2023, as further amended and supplemented by the sixth supplemental indenture dated as of July 23, 2024.
In the opinion of Davis Polk & Wardwell LLP, as special United States products counsel to the Bank, when the Notes offered by this pricing supplement have been issued by the Bank pursuant to the indenture, the trustee has made, in accordance with the indenture, the appropriate notation to the master note evidencing such Notes (the “master note”), and such Notes have been delivered against payment as contemplated herein, such Notes will be valid and binding obligations of the Bank, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability (including, without limitation,
| P-12 | RBC Capital Markets, LLC |
| Redeemable Range Accrual Notes Based on the 10-Year U.S. Dollar SOFR ICE Swap Rate |
concepts of good faith, fair dealing and the lack of bad faith) and possible judicial or regulatory actions or applications giving effect to governmental actions or foreign laws affecting creditors’ rights, provided that such counsel expresses no opinion as to (i) the enforceability of any waiver of rights under any usury or stay law or (ii) the effect of fraudulent conveyance, fraudulent transfer or similar provision of applicable law on the conclusions expressed above. This opinion is given as of the date hereof and is limited to the laws of the State of New York. Insofar as the foregoing opinion involves matters governed by the laws of the Provinces of Ontario and Québec and the federal laws of Canada, you have received, and we understand that you are relying upon, the opinion of Norton Rose Fulbright Canada LLP, Canadian counsel for the Bank, set forth above. In addition, this opinion is subject to customary assumptions about the trustee’s authorization, execution and delivery of the indenture and the authentication of the master note and the validity, binding nature and enforceability of the indenture with respect to the trustee, all as stated in the opinion of Davis Polk & Wardwell LLP dated May 16, 2024, which has been filed as an exhibit to the Bank’s Form 6-K filed with the SEC on May 16, 2024. References to the “indenture” in this paragraph mean the Indenture as defined in the opinion of Davis Polk & Wardwell LLP dated May 16, 2024, as further amended and supplemented by the sixth supplemental indenture dated as of July 23, 2024.
| P-13 | RBC Capital Markets, LLC |
FAQ
What is RBMCF offering in this 424B2?
How is interest on RBMCF’s notes calculated?
When do the RBMCF notes pay interest and mature?
Are the notes callable by Royal Bank of Canada?
What are the pricing economics for these notes?
What is the initial estimated value per $1,000 note?
Who is the calculation agent for the RBMCF notes?
