[424B2] Royal Bank of Canada Prospectus Supplement
Royal Bank of Canada (RY) is registering a small, $1.58 million offering of Auto-Callable Dual Directional Buffer Notes linked to the S&P 500 Futures Excess Return Index. The notes are senior unsecured obligations of RY, issued at 100% of par and offered under the bank’s Global Medium-Term Note Programme (Series J). They carry no periodic interest and expose investors to both RY’s credit risk and market risk tied to the referenced index.
Key economic terms include: (i) a single call observation date on 23 Jun 2026; if the Underlier closes at or above the 17 Jun 2025 initial level of 496.78, the notes are automatically redeemed at 111.55% of par, delivering an 11.55% return in roughly one year; (ii) if not called, final redemption on 23 Jun 2028 provides 100% upside participation; (iii) a 20% downside buffer—investors receive a positive “absolute value” return (capped at 20%) when the index finishes between 80% and 100% of the initial level; (iv) losses are incurred one-for-one below the 20% buffer.
Pricing highlights show a 0.50% underwriting discount and net proceeds of 99.50% of par. The bank’s initial estimated value is $983.46 per $1,000, 1.65% below the offer price, signalling embedded dealer margin and hedging costs. The notes will not be exchange-listed, may be subject to limited secondary liquidity, and are bail-in exempt under Canadian regulations.
Investors must weigh the appeal of an 11.55% potential one-year return and limited 20% buffer against principal risk beyond the buffer, lack of interim coupons, credit exposure to RY, and valuation that starts below par. The modest deal size suggests primarily funding rather than strategic capital raising for the bank.
Royal Bank of Canada (RY) sta registrando un'offerta ridotta da 1,58 milioni di dollari di Auto-Callable Dual Directional Buffer Notes legate all'indice S&P 500 Futures Excess Return. Le note sono obbligazioni senior non garantite di RY, emesse al 100% del valore nominale e offerte nell'ambito del programma Global Medium-Term Note (Serie J) della banca. Non prevedono interessi periodici e comportano un'esposizione sia al rischio di credito di RY sia al rischio di mercato legato all'indice di riferimento.
I termini economici principali includono: (i) una data unica di osservazione per il rimborso anticipato il 23 giugno 2026; se il sottostante chiude al livello iniziale del 17 giugno 2025 pari a 496,78 o superiore, le note vengono rimborsate automaticamente al 111,55% del valore nominale, garantendo un rendimento dell'11,55% in circa un anno; (ii) se non richiamate, il rimborso finale il 23 giugno 2028 offre una partecipazione al rialzo del 100%; (iii) un buffer al ribasso del 20% — gli investitori ottengono un rendimento positivo “valore assoluto” (fino al 20%) se l'indice termina tra l'80% e il 100% del livello iniziale; (iv) le perdite si realizzano in modo proporzionale al di sotto del buffer del 20%.
I punti salienti del pricing mostrano uno sconto di sottoscrizione dello 0,50% e proventi netti pari al 99,50% del valore nominale. Il valore stimato iniziale della banca è di 983,46 dollari per ogni 1.000 dollari, inferiore dell'1,65% rispetto al prezzo di offerta, indicando margini dealer incorporati e costi di copertura. Le note non saranno quotate in borsa, potrebbero avere una liquidità secondaria limitata e sono esenti da bail-in secondo la normativa canadese.
Gli investitori devono valutare l'attrattiva di un potenziale rendimento dell'11,55% in un anno con un buffer limitato del 20% rispetto al rischio di capitale oltre il buffer, all'assenza di cedole intermedie, all'esposizione creditizia a RY e a una valutazione iniziale sotto la pari. La dimensione contenuta dell'operazione suggerisce principalmente un finanziamento piuttosto che una raccolta di capitale strategica per la banca.
Royal Bank of Canada (RY) está registrando una pequeña emisión de 1,58 millones de dólares de Auto-Callable Dual Directional Buffer Notes vinculadas al índice S&P 500 Futures Excess Return. Las notas son obligaciones senior no garantizadas de RY, emitidas al 100% del valor nominal y ofrecidas bajo el Programa Global de Notas a Medio Plazo (Serie J) del banco. No pagan intereses periódicos y exponen a los inversores tanto al riesgo crediticio de RY como al riesgo de mercado ligado al índice de referencia.
Los términos económicos clave incluyen: (i) una única fecha de observación para el llamado anticipado el 23 de junio de 2026; si el subyacente cierra en o por encima del nivel inicial del 17 de junio de 2025 de 496,78, las notas se redimen automáticamente al 111,55% del valor nominal, ofreciendo un retorno del 11,55% en aproximadamente un año; (ii) si no se llaman, el reembolso final el 23 de junio de 2028 ofrece una participación al alza del 100%; (iii) un buffer a la baja del 20% — los inversores reciben un retorno positivo de “valor absoluto” (limitado al 20%) cuando el índice termina entre el 80% y el 100% del nivel inicial; (iv) las pérdidas se producen de manera proporcional por debajo del buffer del 20%.
Los aspectos destacados del precio muestran un descuento de suscripción del 0,50% y un producto neto del 99,50% del valor nominal. El valor estimado inicial del banco es de 983,46 dólares por cada 1.000 dólares, un 1,65% por debajo del precio de oferta, lo que indica márgenes incorporados de los distribuidores y costos de cobertura. Las notas no estarán listadas en bolsa, pueden tener liquidez secundaria limitada y están exentas de bail-in según la regulación canadiense.
Los inversores deben sopesar el atractivo de un posible rendimiento del 11,55% en un año y un buffer limitado del 20% frente al riesgo de principal más allá del buffer, la ausencia de cupones intermedios, la exposición crediticia a RY y una valoración que comienza por debajo del valor nominal. El tamaño modesto de la operación sugiere principalmente financiamiento en lugar de una captación estratégica de capital para el banco.
로열 뱅크 오브 캐나다(RY)는 S&P 500 선물 초과 수익 지수에 연동된 자동 상환형 이중 방향 버퍼 노트 158만 달러 소규모 공모를 등록하고 있습니다. 이 노트는 RY의 선순위 무담보 채무로, 액면가 100%로 발행되며 은행의 글로벌 중기채권 프로그램(시리즈 J) 하에 제공됩니다. 정기 이자는 지급되지 않으며, 투자자는 RY의 신용 위험과 참조 지수에 따른 시장 위험에 노출됩니다.
주요 경제 조건은 다음과 같습니다: (i) 2026년 6월 23일 단일 콜 관찰일; 기초 자산이 2025년 6월 17일 초기 수준인 496.78 이상으로 마감하면 노트는 액면가의 111.55%로 자동 상환되어 약 1년 만에 11.55% 수익을 제공합니다; (ii) 콜되지 않을 경우, 2028년 6월 23일 최종 상환 시 100% 상승 참여가 가능합니다; (iii) 20% 하락 버퍼 — 지수가 초기 수준의 80%에서 100% 사이에서 마감하면 투자자는 최대 20%의 긍정적 “절대 가치” 수익을 받습니다; (iv) 버퍼 이하에서는 1:1 비율로 손실이 발생합니다.
가격 관련 주요 사항은 0.50% 인수 할인율과 액면가의 99.50% 순수익을 보여줍니다. 은행의 초기 추정 가치는 1,000달러당 983.46달러로 제안가보다 1.65% 낮아 딜러 마진 및 헤지 비용이 내포되어 있음을 나타냅니다. 노트는 거래소 상장이 되지 않으며, 2차 유동성이 제한적일 수 있고, 캐나다 규정에 따라 베일인 면제 대상입니다.
투자자는 11.55%의 1년 잠재 수익과 제한된 20% 버퍼의 매력을 버퍼를 초과하는 원금 위험, 중간 쿠폰 부재, RY에 대한 신용 노출, 액면가 이하의 평가와 비교하여 신중히 고려해야 합니다. 소규모 거래 규모는 은행의 전략적 자본 조달보다는 주로 자금 조달 목적임을 시사합니다.
La Royal Bank of Canada (RY) procède à l'enregistrement d'une petite émission de 1,58 million de dollars de billets Auto-Callable Dual Directional Buffer Notes liés à l'indice S&P 500 Futures Excess Return. Ces billets sont des obligations senior non garanties de RY, émises à 100 % de leur valeur nominale et proposées dans le cadre du programme Global Medium-Term Note (série J) de la banque. Ils ne portent pas d'intérêts périodiques et exposent les investisseurs au risque de crédit de RY ainsi qu'au risque de marché lié à l'indice de référence.
Les conditions économiques clés comprennent : (i) une date unique d'observation pour le remboursement anticipé le 23 juin 2026 ; si le sous-jacent clôture au niveau initial du 17 juin 2025 à 496,78 ou au-dessus, les billets sont automatiquement remboursés à 111,55 % de la valeur nominale, offrant un rendement de 11,55 % en environ un an ; (ii) en cas de non-exercice, le remboursement final le 23 juin 2028 offre une participation à 100 % à la hausse ; (iii) un buffer de protection à la baisse de 20 % — les investisseurs reçoivent un rendement positif en « valeur absolue » (plafonné à 20 %) lorsque l'indice termine entre 80 % et 100 % du niveau initial ; (iv) les pertes sont supportées au taux de 1 pour 1 en dessous du buffer de 20 %.
Les points forts du prix montrent une remise de souscription de 0,50 % et un produit net de 99,50 % de la valeur nominale. La valeur estimée initiale par la banque est de 983,46 $ pour 1 000 $, soit 1,65 % en dessous du prix d'offre, ce qui indique une marge intégrée pour les intermédiaires et des coûts de couverture. Les billets ne seront pas cotés en bourse, peuvent avoir une liquidité secondaire limitée et sont exemptés de bail-in selon la réglementation canadienne.
Les investisseurs doivent peser l'attrait d'un rendement potentiel de 11,55 % en un an et d'un buffer limité de 20 % face au risque de perte de capital au-delà du buffer, à l'absence de coupons intermédiaires, à l'exposition au crédit de RY et à une valorisation initiale inférieure à la valeur nominale. La taille modeste de l'opération suggère principalement un financement plutôt qu'une levée de capital stratégique pour la banque.
Die Royal Bank of Canada (RY) registriert ein kleines Angebot in Höhe von 1,58 Millionen US-Dollar von Auto-Callable Dual Directional Buffer Notes, die an den S&P 500 Futures Excess Return Index gekoppelt sind. Die Notes sind unbesicherte vorrangige Verbindlichkeiten von RY, werden zum Nennwert von 100% ausgegeben und im Rahmen des Global Medium-Term Note Programms der Bank (Serie J) angeboten. Sie tragen keine periodischen Zinsen und setzen Investoren sowohl dem Kreditrisiko von RY als auch dem Marktrisiko des Referenzindex aus.
Wichtige wirtschaftliche Bedingungen umfassen: (i) ein einziger Call-Beobachtungstag am 23. Juni 2026; schließt der Basiswert am oder über dem Anfangsniveau vom 17. Juni 2025 von 496,78, werden die Notes automatisch zu 111,55% des Nennwerts zurückgezahlt, was in etwa einem Jahr eine Rendite von 11,55% ergibt; (ii) falls nicht zurückgerufen, erfolgt die Endrückzahlung am 23. Juni 2028 mit 100% Partizipation am Aufwärtspotenzial; (iii) ein 20%iger Abwärtspuffer — Investoren erhalten eine positive „absolute Wert“-Rendite (begrenzt auf 20%), wenn der Index zwischen 80% und 100% des Anfangswerts schließt; (iv) Verluste werden eins zu eins unterhalb des 20%-Buffers getragen.
Die Preisgestaltung zeigt einen Underwriting-Abschlag von 0,50% und Nettoerlöse von 99,50% des Nennwerts. Der anfängliche geschätzte Wert der Bank liegt bei 983,46 USD pro 1.000 USD, 1,65% unter dem Angebotspreis, was eingebettete Händler-Margen und Absicherungskosten signalisiert. Die Notes werden nicht börsennotiert sein, können eine begrenzte Sekundärliquidität aufweisen und sind gemäß kanadischer Regulierung vom Bail-in ausgenommen.
Investoren müssen die Attraktivität einer potenziellen Rendite von 11,55% in einem Jahr und des begrenzten 20%-Buffers gegen das Risiko eines Kapitalverlusts über den Buffer hinaus, das Fehlen von Zwischenkupons, die Kreditexponierung gegenüber RY und eine Bewertung unter pari abwägen. Die geringe Deal-Größe deutet hauptsächlich auf eine Finanzierung und nicht auf eine strategische Kapitalaufnahme der Bank hin.
- 11.55% auto-call return achievable in one year if index is flat or higher.
- 20% downside buffer plus absolute return feature offers limited protection in mild bear scenarios.
- No bail-in conversion risk under Canadian CDIC rules, reducing regulatory uncertainty for U.S. investors.
- Principal at risk beyond 20% decline; uncapped downside exposure.
- No periodic interest; total return entirely path-dependent.
- Initial estimated value (98.346%) below offer price indicates embedded costs to investors.
- Illiquidity risk as notes will not be exchange-listed and total issuance is only $1.58 mm.
- Credit risk of Royal Bank of Canada, senior unsecured obligations.
Insights
TL;DR: Small funding trade; 11.55% callable upside, 20% buffer, but principal risk and off-market value.
The note combines an auto-call with a dual-direction payoff. The single observation date means investors either receive 11.55% in 12 months or stay locked in for three more years. The 20% buffer mitigates moderate downside but uncapped losses thereafter are material. The initial value at 98.346% implies a 165 bp cost; given the tiny $1.58 mm size, secondary liquidity will be negligible. For RBC this is cheap term funding, but the issuance is immaterial to financials. Overall market impact is neutral.
TL;DR: Credit and market risks outweigh modest protection; illiquid, no coupon.
Investors face three layered risks: (1) RY credit—senior but unsecured; (2) S&P 500 Futures ER volatility—losses accelerate below the 20% buffer; (3) liquidity—no listing, tiny float. The absolute return feature looks attractive yet is capped at 20%, while negative participation is unlimited. The call feature exposes holders to reinvestment risk if equities rally early. Given size and structure, I classify the note as not impactful for RY’s capital profile and neutral for markets.
Royal Bank of Canada (RY) sta registrando un'offerta ridotta da 1,58 milioni di dollari di Auto-Callable Dual Directional Buffer Notes legate all'indice S&P 500 Futures Excess Return. Le note sono obbligazioni senior non garantite di RY, emesse al 100% del valore nominale e offerte nell'ambito del programma Global Medium-Term Note (Serie J) della banca. Non prevedono interessi periodici e comportano un'esposizione sia al rischio di credito di RY sia al rischio di mercato legato all'indice di riferimento.
I termini economici principali includono: (i) una data unica di osservazione per il rimborso anticipato il 23 giugno 2026; se il sottostante chiude al livello iniziale del 17 giugno 2025 pari a 496,78 o superiore, le note vengono rimborsate automaticamente al 111,55% del valore nominale, garantendo un rendimento dell'11,55% in circa un anno; (ii) se non richiamate, il rimborso finale il 23 giugno 2028 offre una partecipazione al rialzo del 100%; (iii) un buffer al ribasso del 20% — gli investitori ottengono un rendimento positivo “valore assoluto” (fino al 20%) se l'indice termina tra l'80% e il 100% del livello iniziale; (iv) le perdite si realizzano in modo proporzionale al di sotto del buffer del 20%.
I punti salienti del pricing mostrano uno sconto di sottoscrizione dello 0,50% e proventi netti pari al 99,50% del valore nominale. Il valore stimato iniziale della banca è di 983,46 dollari per ogni 1.000 dollari, inferiore dell'1,65% rispetto al prezzo di offerta, indicando margini dealer incorporati e costi di copertura. Le note non saranno quotate in borsa, potrebbero avere una liquidità secondaria limitata e sono esenti da bail-in secondo la normativa canadese.
Gli investitori devono valutare l'attrattiva di un potenziale rendimento dell'11,55% in un anno con un buffer limitato del 20% rispetto al rischio di capitale oltre il buffer, all'assenza di cedole intermedie, all'esposizione creditizia a RY e a una valutazione iniziale sotto la pari. La dimensione contenuta dell'operazione suggerisce principalmente un finanziamento piuttosto che una raccolta di capitale strategica per la banca.
Royal Bank of Canada (RY) está registrando una pequeña emisión de 1,58 millones de dólares de Auto-Callable Dual Directional Buffer Notes vinculadas al índice S&P 500 Futures Excess Return. Las notas son obligaciones senior no garantizadas de RY, emitidas al 100% del valor nominal y ofrecidas bajo el Programa Global de Notas a Medio Plazo (Serie J) del banco. No pagan intereses periódicos y exponen a los inversores tanto al riesgo crediticio de RY como al riesgo de mercado ligado al índice de referencia.
Los términos económicos clave incluyen: (i) una única fecha de observación para el llamado anticipado el 23 de junio de 2026; si el subyacente cierra en o por encima del nivel inicial del 17 de junio de 2025 de 496,78, las notas se redimen automáticamente al 111,55% del valor nominal, ofreciendo un retorno del 11,55% en aproximadamente un año; (ii) si no se llaman, el reembolso final el 23 de junio de 2028 ofrece una participación al alza del 100%; (iii) un buffer a la baja del 20% — los inversores reciben un retorno positivo de “valor absoluto” (limitado al 20%) cuando el índice termina entre el 80% y el 100% del nivel inicial; (iv) las pérdidas se producen de manera proporcional por debajo del buffer del 20%.
Los aspectos destacados del precio muestran un descuento de suscripción del 0,50% y un producto neto del 99,50% del valor nominal. El valor estimado inicial del banco es de 983,46 dólares por cada 1.000 dólares, un 1,65% por debajo del precio de oferta, lo que indica márgenes incorporados de los distribuidores y costos de cobertura. Las notas no estarán listadas en bolsa, pueden tener liquidez secundaria limitada y están exentas de bail-in según la regulación canadiense.
Los inversores deben sopesar el atractivo de un posible rendimiento del 11,55% en un año y un buffer limitado del 20% frente al riesgo de principal más allá del buffer, la ausencia de cupones intermedios, la exposición crediticia a RY y una valoración que comienza por debajo del valor nominal. El tamaño modesto de la operación sugiere principalmente financiamiento en lugar de una captación estratégica de capital para el banco.
로열 뱅크 오브 캐나다(RY)는 S&P 500 선물 초과 수익 지수에 연동된 자동 상환형 이중 방향 버퍼 노트 158만 달러 소규모 공모를 등록하고 있습니다. 이 노트는 RY의 선순위 무담보 채무로, 액면가 100%로 발행되며 은행의 글로벌 중기채권 프로그램(시리즈 J) 하에 제공됩니다. 정기 이자는 지급되지 않으며, 투자자는 RY의 신용 위험과 참조 지수에 따른 시장 위험에 노출됩니다.
주요 경제 조건은 다음과 같습니다: (i) 2026년 6월 23일 단일 콜 관찰일; 기초 자산이 2025년 6월 17일 초기 수준인 496.78 이상으로 마감하면 노트는 액면가의 111.55%로 자동 상환되어 약 1년 만에 11.55% 수익을 제공합니다; (ii) 콜되지 않을 경우, 2028년 6월 23일 최종 상환 시 100% 상승 참여가 가능합니다; (iii) 20% 하락 버퍼 — 지수가 초기 수준의 80%에서 100% 사이에서 마감하면 투자자는 최대 20%의 긍정적 “절대 가치” 수익을 받습니다; (iv) 버퍼 이하에서는 1:1 비율로 손실이 발생합니다.
가격 관련 주요 사항은 0.50% 인수 할인율과 액면가의 99.50% 순수익을 보여줍니다. 은행의 초기 추정 가치는 1,000달러당 983.46달러로 제안가보다 1.65% 낮아 딜러 마진 및 헤지 비용이 내포되어 있음을 나타냅니다. 노트는 거래소 상장이 되지 않으며, 2차 유동성이 제한적일 수 있고, 캐나다 규정에 따라 베일인 면제 대상입니다.
투자자는 11.55%의 1년 잠재 수익과 제한된 20% 버퍼의 매력을 버퍼를 초과하는 원금 위험, 중간 쿠폰 부재, RY에 대한 신용 노출, 액면가 이하의 평가와 비교하여 신중히 고려해야 합니다. 소규모 거래 규모는 은행의 전략적 자본 조달보다는 주로 자금 조달 목적임을 시사합니다.
La Royal Bank of Canada (RY) procède à l'enregistrement d'une petite émission de 1,58 million de dollars de billets Auto-Callable Dual Directional Buffer Notes liés à l'indice S&P 500 Futures Excess Return. Ces billets sont des obligations senior non garanties de RY, émises à 100 % de leur valeur nominale et proposées dans le cadre du programme Global Medium-Term Note (série J) de la banque. Ils ne portent pas d'intérêts périodiques et exposent les investisseurs au risque de crédit de RY ainsi qu'au risque de marché lié à l'indice de référence.
Les conditions économiques clés comprennent : (i) une date unique d'observation pour le remboursement anticipé le 23 juin 2026 ; si le sous-jacent clôture au niveau initial du 17 juin 2025 à 496,78 ou au-dessus, les billets sont automatiquement remboursés à 111,55 % de la valeur nominale, offrant un rendement de 11,55 % en environ un an ; (ii) en cas de non-exercice, le remboursement final le 23 juin 2028 offre une participation à 100 % à la hausse ; (iii) un buffer de protection à la baisse de 20 % — les investisseurs reçoivent un rendement positif en « valeur absolue » (plafonné à 20 %) lorsque l'indice termine entre 80 % et 100 % du niveau initial ; (iv) les pertes sont supportées au taux de 1 pour 1 en dessous du buffer de 20 %.
Les points forts du prix montrent une remise de souscription de 0,50 % et un produit net de 99,50 % de la valeur nominale. La valeur estimée initiale par la banque est de 983,46 $ pour 1 000 $, soit 1,65 % en dessous du prix d'offre, ce qui indique une marge intégrée pour les intermédiaires et des coûts de couverture. Les billets ne seront pas cotés en bourse, peuvent avoir une liquidité secondaire limitée et sont exemptés de bail-in selon la réglementation canadienne.
Les investisseurs doivent peser l'attrait d'un rendement potentiel de 11,55 % en un an et d'un buffer limité de 20 % face au risque de perte de capital au-delà du buffer, à l'absence de coupons intermédiaires, à l'exposition au crédit de RY et à une valorisation initiale inférieure à la valeur nominale. La taille modeste de l'opération suggère principalement un financement plutôt qu'une levée de capital stratégique pour la banque.
Die Royal Bank of Canada (RY) registriert ein kleines Angebot in Höhe von 1,58 Millionen US-Dollar von Auto-Callable Dual Directional Buffer Notes, die an den S&P 500 Futures Excess Return Index gekoppelt sind. Die Notes sind unbesicherte vorrangige Verbindlichkeiten von RY, werden zum Nennwert von 100% ausgegeben und im Rahmen des Global Medium-Term Note Programms der Bank (Serie J) angeboten. Sie tragen keine periodischen Zinsen und setzen Investoren sowohl dem Kreditrisiko von RY als auch dem Marktrisiko des Referenzindex aus.
Wichtige wirtschaftliche Bedingungen umfassen: (i) ein einziger Call-Beobachtungstag am 23. Juni 2026; schließt der Basiswert am oder über dem Anfangsniveau vom 17. Juni 2025 von 496,78, werden die Notes automatisch zu 111,55% des Nennwerts zurückgezahlt, was in etwa einem Jahr eine Rendite von 11,55% ergibt; (ii) falls nicht zurückgerufen, erfolgt die Endrückzahlung am 23. Juni 2028 mit 100% Partizipation am Aufwärtspotenzial; (iii) ein 20%iger Abwärtspuffer — Investoren erhalten eine positive „absolute Wert“-Rendite (begrenzt auf 20%), wenn der Index zwischen 80% und 100% des Anfangswerts schließt; (iv) Verluste werden eins zu eins unterhalb des 20%-Buffers getragen.
Die Preisgestaltung zeigt einen Underwriting-Abschlag von 0,50% und Nettoerlöse von 99,50% des Nennwerts. Der anfängliche geschätzte Wert der Bank liegt bei 983,46 USD pro 1.000 USD, 1,65% unter dem Angebotspreis, was eingebettete Händler-Margen und Absicherungskosten signalisiert. Die Notes werden nicht börsennotiert sein, können eine begrenzte Sekundärliquidität aufweisen und sind gemäß kanadischer Regulierung vom Bail-in ausgenommen.
Investoren müssen die Attraktivität einer potenziellen Rendite von 11,55% in einem Jahr und des begrenzten 20%-Buffers gegen das Risiko eines Kapitalverlusts über den Buffer hinaus, das Fehlen von Zwischenkupons, die Kreditexponierung gegenüber RY und eine Bewertung unter pari abwägen. Die geringe Deal-Größe deutet hauptsächlich auf eine Finanzierung und nicht auf eine strategische Kapitalaufnahme der Bank hin.
 |
Registration Statement No. 333-275898 Filed Pursuant to Rule 424(b)(2) |
|
Pricing Supplement Pricing Supplement dated June 17, 2025 to the Prospectus dated December 20, 2023, the Prospectus Supplement dated December 20, 2023, the Underlying Supplement No. 1A dated May 16, 2024 and the Product Supplement No. 1A dated May 16, 2024 |
$1,580,000
Royal Bank of Canada | |
Royal Bank of Canada is offering Auto-Callable Dual Directional Buffer Notes (the “Notes”) linked to the performance of the S&P 500® Futures Excess Return Index (the “Underlier”).
| · | Call Feature — If, on the Call Observation Date, the closing value of the Underlier is greater than or equal to the Initial Underlier Value, the Notes will be automatically called for a return of 11.55%. No further payments will be made on the Notes. |
| · | Return Potential — If the Notes are not automatically called and the Final Underlier Value is greater than the Initial Underlier Value, at maturity, investors will receive a return equal to 100% of the Underlier Return. |
| · | Absolute Value Return — If the Notes are not automatically called and the Final Underlier Value is less than or equal to the Initial Underlier Value, but is greater than or equal to the Buffer Value (80% of the Initial Underlier Value), at maturity, investors will receive a one-for-one positive return equal to the absolute value of the Underlier Return. |
| · | Principal at Risk — If the Notes are not automatically called and the Final Underlier Value is less than the Buffer Value, at maturity, investors will lose 1% of the principal amount of their Notes for each 1% that the Final Underlier Value is less than the Initial Underlier Value in excess of the Buffer Percentage of 20%. |
| · | The Notes do not pay interest. |
| · | Any payments on the Notes are subject to our credit risk. |
| · | The Notes will not be listed on any securities exchange. |
CUSIP: 78017K5L2
Investing in the Notes involves a number of risks. See “Selected Risk Considerations” beginning on page P-8 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% | $1,580,000 |
| Underwriting discounts and commissions(1) |
0.50% |
$7,900 |
| Proceeds to Royal Bank of Canada | 99.50% | $1,572,100 |
(1) We or one of our affiliates may pay varying selling concessions of up to $5.00 per $1,000 principal amount of Notes in connection with the distribution of the Notes to other registered broker-dealers. Certain dealers who purchase the Notes for sale to certain fee-based advisory accounts may forgo some or all of their underwriting discount or selling concessions. The public offering price for investors purchasing the Notes in these accounts may be between $995.00 and $1,000.00 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 Trade Date, which we refer to as the initial estimated value, is $983.46 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
| Auto-Callable Dual Directional Buffer |
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, underlying 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 | ||
| Underlier: | The S&P 500® Futures Excess Return Index | ||
| Bloomberg Ticker | Initial Underlier Value(1) | Buffer Value(2) | |
| SPXFP | 496.78 | 397.42 | |
| (1) The closing value of the Underlier on the Trade Date | |||
| (2) 80% of the Initial Underlier Value (rounded to two decimal places) | |||
| Trade Date: | June 17, 2025 | ||
| Issue Date: | June 23, 2025 | ||
| Valuation Date:* | June 20, 2028 | ||
| Maturity Date:* | June 23, 2028 | ||
| Call Feature: | If, on the Call Observation Date, the closing value of the Underlier is greater than or equal to the Initial Underlier Value, the Notes will be automatically called. Under these circumstances, investors will receive on the Call Settlement Date per $1,000 principal amount of Notes an amount equal to $1,115.50 (111.55% of the principal amount). No further payments will be made on the Notes. | ||
| Payment at Maturity: |
If the Notes are not automatically called, investors will receive on the Maturity Date per $1,000 principal amount of Notes:
· If the Final Underlier Value is greater than the Initial Underlier Value, an amount equal to:
$1,000 + ($1,000 × Underlier Return × Participation Rate)
· If the Final Underlier Value is less than or equal to the Initial Underlier Value, but is greater than or equal to the Buffer Value, an amount equal to:
$1,000 + (-1 × $1,000 × Underlier Return)
In this case, you will receive a positive return on the Notes equal to the absolute value of the Underlier Return, even though the Underlier Return is negative. In no event will this return exceed 20%.
· If the Final Underlier Value is less than the Buffer Value, an amount equal to:
$1,000 + [$1,000 × (Underlier Return + Buffer Percentage)]
If the Notes are not automatically called and the Final Underlier Value is less than the Buffer Value, you will lose some or a substantial portion of your principal amount at maturity. All payments on the Notes are subject to our credit risk. | ||
| Participation Rate: | 100% (applicable only at maturity if the Notes are not automatically called) | ||
| Buffer Percentage: | 20% | ||
| P-2 | RBC Capital Markets, LLC |
| Auto-Callable Dual Directional Buffer |
| Underlier Return: |
The Underlier Return, expressed as a percentage, is calculated using the following formula:
Final Underlier Value – Initial Underlier
Value |
| Final Underlier Value: | The closing value of the Underlier on the Valuation Date |
| Call Observation Date:* | June 23, 2026 |
| Call Settlement Date:* | June 26, 2026 |
| Calculation Agent: | RBCCM |
* Subject to postponement. See “General Terms of the Notes—Postponement of a Determination Date” and “General Terms of the Notes—Postponement of a Payment Date” in the accompanying product supplement.
| P-3 | RBC Capital Markets, LLC |
| Auto-Callable Dual Directional Buffer |
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, the underlying supplement no. 1A dated May 16, 2024 and the product supplement no. 1A dated May 16, 2024. 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
| · | Underlying Supplement No. 1A dated May 16, 2024: |
https://www.sec.gov/Archives/edgar/data/1000275/000095010324006773/dp211259_424b2-us1a.htm
| · | Product Supplement No. 1A dated May 16, 2024: |
https://www.sec.gov/Archives/edgar/data/1000275/000095010324006777/dp211286_424b2-ps1a.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 |
| Auto-Callable Dual Directional Buffer |
Supplemental Terms of the Notes
Notwithstanding anything to the contrary in the accompanying product supplement, for purposes of the Notes:
| · | a market disruption event will occur with respect to the Underlier if one or more of the following events occurs, in each case as determined by the Calculation Agent in its sole discretion: (i) the occurrence of a market disruption event with respect to the S&P 500® Index pursuant to the provisions of “General Terms of the Notes—Indices—Market Disruption Events” in the accompanying product supplement; or (ii) the occurrence of a market disruption event with respect to the Underlier pursuant to the provisions of “General Terms of the Notes—Indices—Market Disruption Events” in the accompanying product supplement, where “components” as used in that section means, for this purpose, any futures contract included in the Underlier; |
| · | “scheduled trading day” as used in the accompanying product supplement means, with respect to the Underlier, any day on which the exchanges on which all futures contracts included in the Underlier are scheduled to be open for trading, as determined by the Calculation Agent in its sole discretion; and |
| · | “Fallback Value” as used in the accompanying product supplement means, with respect to the Underlier and the Final Disrupted Determination Date (as defined in the accompanying product supplement) for a Determination Date (as defined in the accompanying product supplement), the closing value of the Underlier on that Final Disrupted Determination Date determined by the Calculation Agent in accordance with the formula for and method of calculating the closing value of the Underlier last in effect prior to the commencement of the market disruption event, using the closing price (or, if trading in the relevant futures contract has been materially suspended or materially limited, the Calculation Agent’s good faith estimate of the closing price that would have prevailed but for that suspension or limitation) on that Final Disrupted Determination Date of each futures contract most recently constituting the Underlier, as well as any futures contract required to roll any expiring futures contract in accordance with the method of determining the composition of the Underlier. |
| P-5 | RBC Capital Markets, LLC |
| Auto-Callable Dual Directional Buffer |
HYPOTHETICAL RETURNS
The table and examples set forth below illustrate hypothetical payments at maturity for hypothetical performance of the Underlier, based on the Buffer Value of 80% of the Initial Underlier Value, the Participation Rate of 100% and the Buffer Percentage of 20%. The table and examples below also assume that the Notes are not automatically called. The table and examples are only for illustrative purposes and may not show the actual return applicable to investors.
| Hypothetical Underlier Return |
Payment at Maturity per $1,000 Principal Amount of Notes |
Payment at Maturity as Percentage of Principal Amount |
| 50.00% | $1,500.00 | 150.000% |
| 40.00% | $1,400.00 | 140.000% |
| 30.00% | $1,300.00 | 130.000% |
| 20.00% | $1,200.00 | 120.000% |
| 10.00% | $1,100.00 | 110.000% |
| 5.00% | $1,050.00 | 105.000% |
| 2.00% | $1,020.00 | 102.000% |
| 0.00% | $1,000.00 | 100.000% |
| -5.00% | $1,050.00 | 105.000% |
| -10.00% | $1,100.00 | 110.000% |
| -20.00% | $1,200.00 | 120.000% |
| -20.01% | $999.90 | 99.990% |
| -30.00% | $900.00 | 90.000% |
| -40.00% | $800.00 | 80.000% |
| -50.00% | $700.00 | 70.000% |
| -60.00% | $600.00 | 60.000% |
| -70.00% | $500.00 | 50.000% |
| -80.00% | $400.00 | 40.000% |
| -90.00% | $300.00 | 30.000% |
| -100.00% | $200.00 | 20.000% |
| Example 1 — | The value of the Underlier increases from the Initial Underlier Value to the Final Underlier Value by 2%. | |
| Underlier Return: | 2% | |
| Payment at Maturity: | $1,000 + ($1,000 × 2% × 100%) = $1,000 + $20 = $1,020 | |
|
In this example, the payment at maturity is $1,020 per $1,000 principal amount of Notes, for a return of 2%.
Because the Final Underlier Value is greater than the Initial Underlier Value, investors receive a return equal to 100% of the Underlier Return. | ||
| P-6 | RBC Capital Markets, LLC |
| Auto-Callable Dual Directional Buffer |
| Example 2 — | The value of the Underlier decreases from the Initial Underlier Value to the Final Underlier Value by 10% (i.e., the Final Underlier Value is below the Initial Underlier Value but above the Buffer Value). | |
| Underlier Return: | -10% | |
| Payment at Maturity: | $1,000 + (-1 × $1,000 × -10%) = $1,000 + $100 = $1,100 | |
|
In this example, the payment at maturity is $1,100 per $1,000 principal amount of Notes, for a return of 10%.
Because the Final Underlier Value is less than the Initial Underlier Value but greater than or equal to the Buffer Value, even though the Underlier Return is negative, investors receive a positive return equal to the absolute value of the Underlier Return. | ||
| Example 3 — | The value of the Underlier decreases from the Initial Underlier Value to the Final Underlier Value by 50% (i.e., the Final Underlier Value is below the Buffer Value). | |
| Underlier Return: | -50% | |
| Payment at Maturity: | $1,000 + [$1,000 × (-50% + 20%)] = $1,000 – $300 = $700 | |
|
In this example, the payment at maturity is $700 per $1,000 principal amount of Notes, representing a loss of 30% of the principal amount.
Because the Final Underlier Value is less than the Buffer Value, investors do not receive a full return of the principal amount of their Notes. | ||
Investors in the Notes could lose some or a substantial portion of the principal amount of their Notes at maturity. The table and examples above assume that the Notes are not automatically called. However, if the Notes are automatically called, investors will not receive any further payments after the Call Settlement Date.
| P-7 | RBC Capital Markets, LLC |
| Auto-Callable Dual Directional Buffer |
SELECTED RISK CONSIDERATIONS
An investment in the Notes involves significant risks. 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
| · | You May Lose a Substantial Portion of the Principal Amount at Maturity — If the Notes are not automatically called and the Final Underlier Value is less than the Buffer Value, you will lose 1% of the principal amount of your Notes for each 1% that the Final Underlier Value is less than the Initial Underlier Value in excess of the Buffer Percentage. You could lose some or a substantial portion of your principal amount at maturity. |
| · | Your Potential Payment If the Notes Are Automatically Called Is Limited — If the Notes are automatically called, the payment upon automatic call will be a fixed amount, regardless of any appreciation in the value of the Underlier, which may be significant. Accordingly, your return on the Notes may be less than your return would be if you made an investment in a security directly linked to the positive performance of the Underlier. |
| · | Your Potential for a Positive Return from Depreciation of the Underlier Is Limited — The absolute value return feature applies only if the Final Underlier Value is less than the Initial Underlier Value but greater than or equal to the Buffer Value. Thus, any return potential of the Notes in the event that the Final Underlier Value is less than the Initial Underlier Value is limited by the Buffer Value. Any decline in the Final Underlier Value below the Buffer Value will result in a loss, rather than a positive return, on the Notes. |
| · | The Notes Do Not Pay Interest, and Your Return on the Notes May Be Lower Than the Return on a Conventional Debt Security of Comparable Maturity — There will be no periodic interest payments on the Notes as there would be on a conventional fixed-rate or floating-rate debt security having the same maturity. The return that you will receive on the Notes, which could be negative, may be less than the return you could earn on other investments. Even if your return is positive, your return may be less than the return you would earn if you purchased one of our conventional senior interest-bearing debt securities. |
| · | The Notes Are Subject to an Automatic Call — If, on the Call Observation Date, the closing value of the Underlier is greater than or equal to the Initial Underlier Value, the Notes will be automatically called, and you will not receive any further payments on the Notes. You may be unable to reinvest your proceeds from the automatic call in an investment with a return that is as high as the return on the Notes would have been if they had not been called. |
| · | 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. |
| · | Any Payment on the Notes Will Be Determined Based on the Closing Values of the Underlier on the Dates Specified — Any payment on the Notes will be determined based on the closing values of the Underlier on the dates specified. You will not benefit from any more favorable value of the Underlier determined at any other time. |
| · | The U.S. Federal Income Tax Consequences of an Investment in the Notes Are Uncertain — There is no direct legal authority regarding the proper U.S. federal income tax treatment of the Notes, and significant aspects of the tax treatment of the Notes are uncertain. You should review carefully the section entitled “United States Federal Income Tax Considerations” herein, in combination with the section entitled “United States Federal Income Tax Considerations” |
| P-8 | RBC Capital Markets, LLC |
| Auto-Callable Dual Directional Buffer |
in the accompanying product supplement, and consult your tax adviser regarding the U.S. federal income tax consequences of an investment in 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 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 value of the Underlier, 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 Trade 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 dividends, 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 Trade 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 |
| P-9 | RBC Capital Markets, LLC |
| Auto-Callable Dual Directional Buffer |
the value of the Notes. Trading by us and our affiliates may adversely affect the value of the Underlier 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 values of the Underlier 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 Underlier” 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. |
Risks Relating to the Underlier
| · | You Will Not Have Any Rights to the Futures Contracts Included in the Underlier or the Securities Included in the Reference Index — As an investor in the Notes, you will not have voting rights or rights to receive dividends or other distributions or any other rights with respect to the futures contracts included in the Underlier or the securities included in the S&P 500® Index (the “Reference Index”). |
| · | The Underlier Reflects the Price Return of the Futures Contracts Composing the Underlier, Not the Total Return — The return on the Notes is based on the performance of the Underlier, which reflects changes in the market prices of the futures contracts composing the Underlier and positive or negative yields associated with rolling those futures contracts. The Underlier is not a “total return” index that, in addition to reflecting those price and roll returns, would also reflect interest on a hypothetical cash position collateralizing the futures contracts composing the Underlier. |
| · | The Performance of the Underlier Will Differ from the Performance of the Reference Index — A variety of factors can lead to a disparity between the performance of an equity index futures contract and the index referenced by those futures contracts, including the expected dividend yields of the equity securities included in that index, an implicit financing cost associated with the futures contract and policies of the exchange on which the futures contracts are traded, such as margin requirements. A decline in expected dividends yields or an increase in margin requirements may adversely affect the performance of the Underlier. In addition, the implicit financing cost will negatively affect the performance of the Underlier, with a greater negative effect when market interest rates are higher. During periods of high market interest rates, the Underlier is likely to underperform the Reference Index, perhaps significantly. |
| · | Negative Roll Returns Associated with the Futures Contracts Composing the Underlier May Adversely Affect the Level of the Underlier and the Value of the Notes — Unlike equity securities, the futures contracts composing the Underlier, by their terms, have stated expirations. As the futures contracts composing the Underlier approach expiration, they are replaced by contracts of the same series that have a later expiration. For example, a futures contract notionally purchased and held in June may specify a September expiration date. As time passes, the contract expiring in September is replaced by a contract for delivery in December. This is accomplished by notionally selling the September contract and notionally purchasing the December contract. This process is referred to as “rolling.” Excluding other considerations, if prices are higher in the distant delivery months than in the nearer delivery months, the notional purchase of the December contract would take place at a price that is higher than the price of the September contract, thereby creating a negative “roll return.” Negative roll returns adversely affect the returns on the futures contracts composing the Underlier and, therefore, the value of the Underlier and any payments on, and the value of, the Notes. Because of the potential effects of negative roll returns, it is possible for the value of the Underlier to decrease significantly over time, even when the levels of the Reference Index are stable or increasing. |
| · | The Underlier Is Subject to Significant Risks Associated with Futures Markets — Futures markets are subject to temporary distortions or other disruptions due to various factors, including lack of liquidity, the participation of speculators and government regulation and intervention. In addition, futures exchanges generally have regulations that limit the amount of the futures contract price fluctuations that may occur in a single day. These limits are generally referred to as “daily price fluctuation limits” and the maximum or minimum price of a contract on any given day as a result of those limits is referred to as a “limit price.” Once the limit price has been reached in a particular contract, no trades may be made at a price beyond the limit, or trading may be limited for a set period of time. Limit prices have the |
| P-10 | RBC Capital Markets, LLC |
| Auto-Callable Dual Directional Buffer |
effect of precluding trading in a particular contract or forcing the liquidation of contracts at potentially disadvantageous times or prices. These circumstances could delay the calculation of the value of the Underlier. These factors and others can cause the prices of the futures contracts composing the Underlier to be volatile and could adversely affect the value of the Underlier and any payments on, and the value of, your Notes.
| · | Any Payment on the Notes May Be Postponed and Adversely Affected by the Occurrence of a Market Disruption Event — The timing and amount of any payment on the Notes is subject to adjustment upon the occurrence of a market disruption event affecting the Underlier. If a market disruption event persists for a sustained period, the Calculation Agent may make a determination of the closing value of the Underlier. See “General Terms of the Notes—Indices—Market Disruption Events,” “General Terms of the Notes—Postponement of a Determination Date” and “General Terms of the Notes—Postponement of a Payment Date” in the accompanying product supplement as supplemented by “Supplemental Terms of the Notes” in this pricing supplement. |
| · | Adjustments to the Underlier or the Reference Index Could Adversely Affect Any Payments on the Notes — The sponsor of the Reference Index may add, delete, substitute or adjust the securities composing the Reference Index or the sponsor of the Underlier or the Reference Index may make methodological changes to the Underlier or the Reference Index, as applicable, that could affect its performance. The Calculation Agent will calculate the value to be used as the closing value of the Underlier in the event of certain material changes in, or modifications to, the Underlier. In addition, the sponsor of the Underlier may also discontinue or suspend calculation or publication of the Underlier at any time. Under these circumstances, the Calculation Agent may select a successor index that the Calculation Agent determines to be comparable to the Underlier or, if no successor index is available, the Calculation Agent will determine the value to be used as the closing value of the Underlier. Any of these actions could adversely affect the value of the Underlier and, consequently, the value of the Notes. See “General Terms of the Notes—Indices—Discontinuation of, or Adjustments to, an Index” in the accompanying product supplement. |
| P-11 | RBC Capital Markets, LLC |
| Auto-Callable Dual Directional Buffer |
INFORMATION REGARDING THE UNDERLIER
The Underlier measures the performance of a rolling position in the nearest maturing quarterly E-mini® S&P 500® futures contracts trading on the Chicago Mercantile Exchange. E-mini® S&P 500® futures contracts are U.S. dollar-denominated futures contracts based on the S&P 500® Index. The S&P 500® Index consists of stocks of 500 companies selected to provide a performance benchmark for the U.S. equity markets. For more information about the Underlier, see “Indices—The S&P 500® Futures Excess Return Index” in the accompanying underlying supplement.
Historical Information
The following graph sets forth historical closing values of the Underlier for the period from January 1, 2015 to June 17, 2025. The red line represents the Buffer Value. We obtained the information in the graph from Bloomberg Financial Markets, without independent investigation. We cannot give you assurance that the performance of the Underlier will result in the return of all of your initial investment.
S&P 500® Futures Excess Return Index
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
| P-12 | RBC Capital Markets, LLC |
| Auto-Callable Dual Directional Buffer |
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, including consequences that may arise due to any other investments relating to the Underlier. You should consult your tax adviser regarding the effect any such circumstances may have on the U.S. federal income tax consequences of your ownership of a Note.
In the opinion of our counsel, it is reasonable to treat the Notes for U.S. federal income tax purposes as prepaid financial contracts that are “open transactions,” as described in the section entitled “United States Federal Income Tax Considerations—Tax Consequences to U.S. Holders—Notes Treated as Prepaid Financial Contracts that are Open Transactions” in the accompanying product supplement. There is uncertainty regarding this treatment, and the Internal Revenue Service (the “IRS”) or a court might not agree with it. A different tax treatment could be adverse to you. Generally, if this treatment is respected, (i) you should not recognize taxable income or loss prior to the taxable disposition of your Notes (including upon maturity or an earlier redemption, if applicable) and (ii) the gain or loss on your Notes should be treated as short-term capital gain or loss unless you have held the Notes for more than one year, in which case your gain or loss should be treated as long-term capital gain or loss.
We do not plan to request a ruling from the IRS regarding the treatment of the Notes. An alternative characterization of the Notes could materially and adversely affect the tax consequences of ownership and disposition of the Notes, including the timing and character of income recognized. In addition, the U.S. Treasury Department and the IRS have requested comments on various issues regarding the U.S. federal income tax treatment of “prepaid forward contracts” and similar financial instruments and have indicated that such transactions may be the subject of future regulations or other guidance. Furthermore, members of Congress have proposed legislative changes to the tax treatment of derivative contracts. Any legislation, Treasury regulations or other guidance promulgated after consideration of these issues could materially and adversely affect the tax consequences of an investment in the Notes, possibly with retroactive effect.
Non-U.S. Holders. As discussed under “United States Federal Income Tax Considerations—Tax Consequences to Non-U.S. Holders—Dividend Equivalents under Section 871(m) of the Code” in the accompanying product supplement, Section 871(m) of the Internal Revenue Code and Treasury regulations promulgated thereunder (“Section 871(m)”) generally impose a 30% withholding tax on dividend equivalents paid or deemed paid to Non-U.S. Holders with respect to certain financial instruments linked to U.S. equities or indices that include U.S. equities. The Treasury regulations, as modified by an IRS notice, exempt financial instruments issued prior to January 1, 2027 that do not have a “delta” of one. Based on certain determinations made by us, our counsel is of the opinion that Section 871(m) should not apply to the Notes with regard to Non-U.S. Holders. Our determination is not binding on the IRS, and the IRS may disagree with this determination.
We will not be required to pay any additional amounts with respect to U.S. federal withholding taxes.
You should consult your tax adviser regarding the U.S. federal income tax consequences of an investment in the Notes, including possible alternative treatments, 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)
The Notes are offered initially to investors at a purchase price equal to par, except with respect to certain accounts as indicated on the cover page of this pricing supplement. We or one of our affiliates may pay the underwriting discount as set forth on the cover page of this pricing supplement.
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
| P-13 | RBC Capital Markets, LLC |
| Auto-Callable Dual Directional Buffer |
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.
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
| P-14 | RBC Capital Markets, LLC |
| Auto-Callable Dual Directional Buffer |
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, 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-15 | RBC Capital Markets, LLC |
FAQ
What is the auto-call feature on Royal Bank of Canada’s 424B2 notes (RY)?
How much downside protection do the RY dual-directional buffer notes provide?
Do the Royal Bank of Canada notes pay interest during the term?
What is the initial estimated value versus the offering price for these RY notes?
When do the RBC buffer notes mature if not called?
