Royal Bank's New Retail-Linked Notes Offer 19% Potential Return with Downside Protection

Rhea-AI Filing Summary

Royal Bank of Canada is offering Barrier Digital Notes linked to the performance of three underlying stocks: Conagra Brands, Starbucks, and Target, maturing September 30, 2026. The notes feature:

• 19.15% Digital Return if the least performing stock's final value is at/above its Digital Barrier Value (55% of initial value)
• Return of principal if the least performing stock's final value is below Digital Barrier but at/above Barrier Value (50% of initial value)
• 1:1 loss of principal if least performing stock falls below Barrier Value

Key risks include potential loss of principal, limited returns, dependence on worst-performing stock, and credit risk of Royal Bank of Canada. Initial estimated value ($929.00-$979.00 per $1,000 principal) is below offering price. Notes do not pay interest and have limited secondary market liquidity. Trade Date: June 25, 2025; Maturity: September 30, 2026.

Positive

• Offers potential 19.15% fixed return if the least performing underlying stock stays above its Digital Barrier Value (55% of initial value)
• Principal protection feature if the least performing stock remains above 50% of its initial value but below 55%

Negative

• High risk of principal loss - investors can lose substantial portion or all principal if worst performing stock falls below 50% barrier
• Return is capped at 19.15% regardless of how well underlying stocks perform
• Product is tied to worst performing of three stocks (Conagra, Starbucks, Target), magnifying downside risk
• Initial estimated value ($929-$979) is less than the principal amount ($1,000), indicating significant embedded costs
• No periodic interest payments during the ~15-month term

 

 

Barrier Digital Notes
Linked to the Least Performing of Three Underliers

Due September 30, 2026

 

PRODUCT CHARACTERISTICS

· Contingent Fixed Return — If the Final Underlier Value of the Least Performing Underlier is greater than or equal to its Digital Barrier Value, at maturity, investors will receive a fixed return equal to the Digital Return of 19.15%.

· Contingent Return of Principal at Maturity — If the Final Underlier Value of the Least Performing Underlier is less than its Digital Barrier Value, but is greater than or equal to its Barrier Value, at maturity, investors will receive the principal amount of their Notes. If the Final Underlier Value of the Least Performing Underlier is less than its Barrier Value, at maturity, investors will lose 1% of the principal amount of their Notes for each 1% that the Final Underlier Value of the Least Performing Underlier is less than its Initial Underlier Value.

KEY TERMS
Issuer:	Royal Bank of Canada (“RBC”)
CUSIP:	78017PBZ3
Underliers:	The common stock of Conagra Brands, Inc. (Bloomberg symbol “CAG UN”), the common stock of Starbucks Corporation (Bloomberg symbol “SBUX UW”) and the common stock of Target Corporation (Bloomberg symbol “TGT UN”)
Trade Date:	June 25, 2025
Issue Date:	June 30, 2025
Valuation Date:	September 25, 2026
Maturity Date:	September 30, 2026
Payment at Maturity:	Investors will receive on the Maturity Date per $1,000 principal amount of Notes: · If the Final Underlier Value of the Least Performing Underlier is greater than or equal to its Digital Barrier Value, an amount equal to: $1,000 + ($1,000 × Digital Return) · If the Final Underlier Value of the Least Performing Underlier is less than its Digital Barrier Value, but is greater than or equal to its Barrier Value: $1,000 · If the Final Underlier Value of the Least Performing Underlier is less than its Barrier Value, an amount equal to: $1,000 + ($1,000 × Underlier Return of the Least Performing Underlier) If the Final Underlier Value of the Least Performing Underlier is less than its Barrier Value, you will lose a substantial portion or all of your principal amount at maturity.
Digital Return:	19.15%
Barrier Value:	With respect to each Underlier, 50% of its Initial Underlier Value
Digital Barrer Value:	With respect to each Underlier, 55% of its Initial Underlier Value

KEY TERMS (continued)
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

PAYOFF DIAGRAM

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/1000275/000095010325007803/dp230585_424b2-us2720.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 $929.00 and $979.00 per $1,000 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.

· Your Potential Return at Maturity Is Limited.

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

· 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.

· 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 is the potential return on RY's Barrier Digital Notes due September 2026?

The notes offer a Digital Return of 19.15% if the Final Underlier Value of the Least Performing Underlier is greater than or equal to its Digital Barrier Value (55% of Initial Value) at maturity. If the Final Underlier Value falls below the Digital Barrier but stays above the Barrier Value (50% of Initial Value), investors receive their principal back. Below the Barrier Value, investors lose 1% of principal for each 1% decline in the Least Performing Underlier.

Which stocks are the underlying assets for RY's Barrier Digital Notes?

The notes are linked to the performance of three stocks: Conagra Brands, Inc. (CAG), Starbucks Corporation (SBUX), and Target Corporation (TGT). The return is determined by the worst-performing of these three stocks.

What is the maturity date and CUSIP for RY's new Barrier Digital Notes?

The Barrier Digital Notes have a CUSIP of 78017PBZ3 and will mature on September 30, 2026. The notes will be issued on June 30, 2025, with the final valuation date occurring on September 25, 2026.

What is the estimated initial value of RY's Barrier Digital Notes?

The initial estimated value of the Notes as of the Trade Date is expected to be between $929.00 and $979.00 per $1,000 principal amount, which will be less than the public offering price.

What are the key risks of investing in RY's Barrier Digital Notes?

Key risks include: potential loss of principal if the Least Performing Underlier falls below the Barrier Value, limited return potential capped at 19.15%, no interest payments, exposure to only the worst-performing of the three underlying stocks, and credit risk of Royal Bank of Canada. Additionally, there may not be an active trading market for the notes.