[FWP] Royal Bank of Canada Free Writing Prospectus

Rhea-AI Filing Summary

Royal Bank of Canada (RY) is marketing an Auto-Callable Contingent Coupon Barrier Note with a “memory” coupon linked to the worst performer of three high-beta U.S. technology equities: Broadcom (AVGO), Meta Platforms (META) and NVIDIA (NVDA). The $5,000-denominated notes price on 17 Jul 2025, are issued on 22 Jul 2025 and mature on 20 Jul 2028 unless called earlier.

Income profile. Investors are offered a $275 quarterly coupon (5.50%)—equivalent to 22.00% p.a.—but payment is contingent on every underlier closing ≥70% of its initial value (the “Coupon Threshold”) on each quarterly observation date. Missed coupons are stored and may be paid later (memory feature) if the threshold is subsequently met.

Early redemption. On any quarterly Call Observation Date the note is automatically called at par plus all due coupons if every underlier closes ≥ its initial level. This gives the issuer flexibility to retire the note should equity performance be favorable.

Principal risk at maturity. If the note is not called and the Least Performing Underlier closes ≥70% of its initial level on the Valuation Date, principal is repaid in cash. Otherwise, holders receive physical delivery of that underlier based on a $5,000 notional, exposing them to losses of up to 100% if the stock has fallen significantly.

Initial value & fees. RBC estimates the fair value at $4,514.85–$4,764.85 per $5,000 note, reflecting embedded distribution and hedging costs; the public offering price is 100% of par.

Key risks disclosed include full downside exposure below the 70% barrier, possibility of receiving no coupons, “worst-of” payoff structure, limited upside versus direct equity ownership, RBC credit risk, tax uncertainty and thin secondary market liquidity.

The product targets yield-seeking investors prepared to accept issuer credit exposure and the potential for equity-linked principal loss in exchange for high contingent income.

Positive

• 22% annual contingent coupon with memory feature provides high potential income relative to investment-grade credit yields.
• 30% downside buffer (70% barrier) before principal loss occurs at maturity.
• Automatic call can shorten duration and boost annualized return if underlying equities perform well early in the term.

Negative

• Principal is fully at risk below the 70% barrier, with worst-performer settlement in shares that could be worth little or nothing.
• No participation in equity upside beyond scheduled coupons; early call benefits issuer more than investor.
• Initial estimated value (≈90–95% of par) is materially below issue price, reflecting embedded fees.
• Credit exposure to RBC; a downgrade or widening CDS spreads can hurt secondary pricing.
• Liquidity risk: limited secondary market may force sales at significant discounts.

Insights

Structured Products Analyst

TL;DR — High 22% contingent coupon, 30% downside buffer, but worst-of structure and principal-at-risk make risk/return profile aggressive.

The note offers an eye-catching 22% annual coupon with a memory feature, appealing in a range-bound or modestly bullish tech environment. A 70% coupon/strike threshold creates a 30% cushion, but the worst-performer mechanic means a single stock sell-off drags the entire payoff. Because the call trigger is set at the initial level, outperformance benefits the issuer more than the investor—holders are capped at par plus accrued coupons. The estimated value (≈ 90–95% of par) implies a 5–10% placement fee/hedging charge. Credit risk is senior unsecured exposure to RBC, currently high-grade but not risk-free. Overall impact: neutral; attractive headline yield balances significant downside.

Portfolio Manager

TL;DR — Suitable only for tactical yield plays; low diversification, high tech concentration and limited liquidity weaken portfolio fit.

Exposure to three mega-cap tech names concentrates sector risk and correlation, reducing the effectiveness of the 30% barrier. The high coupon may improve cashflows in a flat market, yet investors forfeit any equity upside beyond coupons, meaning opportunity cost versus owning the stocks outright. Physical delivery settlement can create operational friction and tax complexity. Secondary market spreads can easily erase a full quarter of coupon income. From a portfolio construction viewpoint, the note is a specialized tool rather than a core holding; I would size it modestly and monitor call probabilities as equity beta shifts.

 

 

 	 
  Auto-Callable Contingent Coupon Barrier Notes with Memory Coupon Linked to the Least Performing of Three Underliers Due July 20, 2028  

 

PRODUCT CHARACTERISTICS

· Contingent Coupons with Memory Feature — If the Notes have not been automatically called, investors will receive a Contingent Coupon on a quarterly Coupon Payment Date if the closing value of each Underlier is greater than or equal to its Coupon Threshold on the immediately preceding Coupon Observation Date. A Contingent Coupon that is not payable on a Coupon Payment Date may be paid later, but only if the closing value of each Underlier is greater than or equal to its Coupon Threshold on a later Coupon Observation Date. You may not receive any Contingent Coupons during the term of the Notes.

· Call Feature — If, on any quarterly Call Observation Date, the closing value of each Underlier is greater than or equal to its Initial Underlier Value, the Notes will be automatically called for 100% of their principal amount plus the Contingent Coupon and any unpaid Contingent Coupons otherwise due. No further payments will be made on the Notes.

· Contingent Return of Principal at Maturity — If the Notes are not automatically called and the Final Underlier Value of the Least Performing Underlier is greater than or equal to its Barrier Value, at maturity, investors will receive the principal amount of their Notes plus the Contingent Coupon and any unpaid Contingent Coupons otherwise due. If the Notes are not automatically called and the Final Underlier Value of the Least Performing Underlier is less than its Barrier Value, at maturity, investors will receive shares of the Least Performing Underlier that will likely be worth significantly less than the principal amount of their Notes and could be worth nothing.

KEY TERMS
Issuer:	Royal Bank of Canada (“RBC”)
CUSIP:	78015QTD3
Underliers:	The common stock of Broadcom Inc. (Bloomberg symbol “AVGO UW”), the Class A common stock of Meta Platforms, Inc. (Bloomberg symbol “META UW”) and the common stock of NVIDIA Corporation (Bloomberg symbol “NVDA UW”)
Trade Date:	July 17, 2025
Issue Date:	July 22, 2025
Valuation Date:	July 17, 2028
Maturity Date:	July 20, 2028
Payment of Contingent Coupons with Memory Feature:	If the Notes have not been automatically called, investors will receive a Contingent Coupon on a Coupon Payment Date if the closing value of each Underlier is greater than or equal to its Coupon Threshold on the immediately preceding Coupon Observation Date. If a Contingent Coupon is not payable on any Coupon Payment Date, it will be paid on any later Coupon Payment Date on which a Contingent Coupon is payable, if any, together with the payment otherwise due on that later date.   No Contingent Coupon will be payable on a Coupon Payment Date if the closing value of any Underlier is less than its Coupon Threshold on the immediately preceding Coupon Observation Date.  
Contingent Coupon:	If payable, $275.00 per $5,000 principal amount of Notes (corresponding to a rate of 5.50% per quarter or 22.00% per annum)
Coupon Observation Dates:	Quarterly
Coupon Payment Dates:	Quarterly

 

KEY TERMS (continued)
Call Feature:	If, on any Call Observation Date, the closing value of each Underlier is greater than or equal to its Initial Underlier Value, the Notes will be automatically called. Under these circumstances, investors will receive on the Call Settlement Date per $5,000 principal amount of Notes an amount equal to $5,000 plus the Contingent Coupon and any unpaid Contingent Coupons otherwise due. No further payments will be made on the Notes.
Call Observation Dates:	Quarterly
Call Settlement Date:	If the Notes are automatically called on any Call Observation Date, the Coupon Payment Date immediately following that Call Observation Date
Payment at Maturity:	If the Notes are not automatically called, investors will receive on the Maturity Date per $5,000 principal amount of Notes, in addition to any Contingent Coupon and any unpaid Contingent Coupons otherwise due: ·     If the Final Underlier Value of the Least Performing Underlier is greater than or equal to its Barrier Value: $5,000 ·     If the Final Underlier Value of the Least Performing Underlier is less than its Barrier Value, a number of shares of the Least Performing Underlier equal to the Physical Delivery Amount of the Least Performing Underlier. Fractional shares will be paid in cash with a value equal to the number of fractional shares times the Final Underlier Value of the Least Performing Underlier. If the Notes are not automatically called and the Final Underlier Value of the Least Performing Underlier is less than its Barrier Value, you will receive shares of the Least Performing Underlier that will likely be worth significantly less than the principal amount of your Notes and could be worth nothing at maturity.
Physical Delivery Amount:	With respect to each Underlier, a number of shares of that Underlier equal to $5,000 divided by its Initial Underlier Value (rounded to two decimal places)
Coupon Threshold and Barrier Value:	With respect to each Underlier, 70% of its Initial Underlier Value
Underlier Return:	With respect to each Underlier: Final Underlier Value – Initial Underlier Value Initial Underlier Value 
Initial Underlier Value:	With respect to each Underlier, the closing value of that Underlier on the Trade Date
Final Underlier Value:	With respect to each Underlier, the closing value of that Underlier on the Valuation Date
Least Performing Underlier:	The Underlier with the lowest Underlier Return

This document provides a summary of the terms of the Notes. Investors should carefully review the accompanying preliminary pricing supplement, product supplement, prospectus supplement and prospectus, as well as “Selected Risk Considerations” below, before making a decision to invest in the Notes:

https://www.sec.gov/Archives/edgar/data/1000275/000095010325008739/dp231524_424b2-citieln37wof.htm

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 expected to be between $4,514.85 and $4,764.85 per $5,000 principal amount of Notes and will be less than the public offering price of the Notes. We describe the determination of the initial estimated value in more detail in the accompanying preliminary pricing supplement.

 

 

 

 

 	 
         

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 “Selected Risk Considerations” section of the accompanying preliminary pricing supplement and 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.

 

· You May Lose a Portion or All of the Principal Amount at Maturity.

· You May Not Receive Any Contingent Coupons.

· Any Payment on the Notes Will Be Determined Solely by the Performance of the Underlier with the Worst Performance Even If the Other Underliers Perform Better.

· You Will Not Participate in Any Appreciation of Any Underlier, and Any Potential Return on the Notes Is Limited.

· The Notes Are Subject to an Automatic Call.

· 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.

· Any Payment on the Notes Will Be Determined Based on the Closing Values of the Underliers on the Dates Specified.

· The U.S. Federal Income Tax Consequences of an Investment in the Notes Are Uncertain.

· There May Not Be an Active Trading Market for the Notes; Sales in the Secondary Market May Result in Significant Losses.

· The Initial Estimated Value of the Notes Will Be Less Than the Public Offering Price.

· The Initial Estimated Value of the Notes Is Only an Estimate, Calculated as of the Trade Date.

· Our and Our Affiliates’ Business and Trading Activities May Create Conflicts of Interest.

· RBCCM’s Role as Calculation Agent May Create Conflicts of Interest.

· You Will Not Have Any Rights to Any Underlier.

· Any Payment on the Notes May Be Postponed and Adversely Affected by the Occurrence of a Market Disruption Event.

· Anti-dilution Protection Is Limited, and the Calculation Agent Has Discretion to Make Anti-dilution Adjustments.

· Reorganization or Other Events Could Adversely Affect the Value of the Notes or Result in the Notes Being Accelerated.

 

Royal Bank of Canada has filed a registration statement (including a product supplement, prospectus supplement and prospectus) with the SEC for the offering to which this document relates. Before you invest, you should read those documents and the other documents that we have filed with the SEC for more complete information about us and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, we, any agent or any dealer participating in this offering will arrange to send you those documents if you so request by calling toll-free at 1-877-688-2301.

 

As used in this document, “Royal Bank of Canada,” “we,” “our” and “us” mean only Royal Bank of Canada. Capitalized terms used in this document without definition are as defined in the accompanying preliminary pricing supplement.

 

Registration Statement No. 333-275898; filed pursuant to Rule 433

 

 

 

FAQ

What coupon does the Royal Bank of Canada (RY) Auto-Callable Barrier Note pay?

If conditions are met, the note pays $275 per $5,000 (5.50%) quarterly, equal to 22.00% per annum.

When can the RBC notes be automatically called?

On any quarterly observation date if all three underliers close at or above their initial values; investors then receive par plus accrued coupons.

What happens at maturity if one underlier falls below the 70% barrier?

Investors receive shares of the worst-performing stock instead of cash, potentially resulting in substantial principal loss.

Why is the initial estimated value below the $5,000 offering price?

RBC’s fair-value range of $4,514.85–$4,764.85 reflects underwriting discounts, hedging costs and issuer profit.

Are missed coupons on the RBC notes lost forever?

No. Thanks to the memory feature, any unpaid coupon is paid later if all underliers meet the 70% threshold on a subsequent observation date.

What are the tax implications of these notes?

RBC states the U.S. federal tax treatment is uncertain; investors should consult their tax advisers.