RBC offers 10.25%-11.25% Auto-Callable Notes linked to Uber (UBER)
Royal Bank of Canada (RY) has filed a Free Writing Prospectus for an offering of Auto-Callable Contingent Coupon Barrier Notes with a Memory Coupon linked to the common stock of Uber Technologies, Inc. (UBER).
Rhea-AI Filing Summary
Royal Bank of Canada (RY) has filed a Free Writing Prospectus for an offering of Auto-Callable Contingent Coupon Barrier Notes with a Memory Coupon linked to the common stock of Uber Technologies, Inc. (UBER). The $1,000-denominated notes mature on 30 June 2028 and can be automatically called on any quarterly observation date starting roughly six months after the 26 June 2025 trade date if Uber’s closing price is at or above its initial level.
Income profile. If the notes are not called, investors may receive quarterly contingent coupons of 2.5625 %-2.8125 % (annualized 10.25 %-11.25 %) provided the underlying closes at or above the 65 % coupon threshold on the preceding observation date. A memory feature accrues unpaid coupons for future payment if a subsequent observation date meets the threshold.
Principal repayment. At maturity, holders receive par only if the final Uber price is ≥ 65 % of the initial level; otherwise the redemption amount falls one-for-one with the underlying decline, exposing investors to substantial principal loss. The same 65 % level acts as both coupon threshold and barrier value.
Pricing and liquidity. RBC’s initial estimated value is $898-$948 per $1,000 note—5 %-10 % below issue price—reflecting embedded fees and hedging costs. Secondary market trading is not assured and may occur at prices that reflect issuer credit spreads and market volatility.
Key risks highlighted by RBC include potential loss of principal, possibility of receiving no coupons, limited upside versus direct equity ownership, issuer credit risk, tax uncertainty, and conflicts of interest arising from RBC Capital Markets’ role as calculation agent.
Positive
- Double-digit contingent coupon of 10.25 %-11.25 % per annum enhances income potential.
- Memory feature allows previously missed coupons to be recovered if conditions improve.
- Automatic call can return principal early with accrued coupons, shortening effective duration.
Negative
- Principal loss becomes dollar-for-dollar if Uber falls below the 65 % barrier at maturity.
- No participation in Uber upside; returns are capped at coupon plus par.
- Issuer credit risk; payments depend on Royal Bank of Canada’s ability to pay.
- Initial estimated value ($898-$948) is up to 10 % below the $1,000 offering price, implying embedded fees.
- Secondary market liquidity is uncertain; investors may face significant bid-ask spreads or be unable to exit early.
- U.S. tax treatment is uncertain, potentially complicating after-tax returns.
Insights
TL;DR – High coupon with 65 % barrier; principal at risk, upside capped, credit & liquidity concerns.
The notes deliver double-digit headline yields via contingent quarterly coupons and a memory feature, which may appeal to income-oriented investors expecting Uber to remain above 65 % of its current price. Automatic call mechanics limit duration risk but also cap total return. The 35 % downside buffer is modest for a single volatile growth stock, and any breach converts exposure into a linear equity loss. The issuer’s initial value discount of up to 10 % underscores embedded costs. Overall, the structure balances attractive carry with meaningful tail risk and is suitable only for investors comfortable with both Uber volatility and RBC credit exposure.
TL;DR – Product skews risk to investors; limited upside, full downside beyond 35 % drop.
From a portfolio-construction viewpoint, this note behaves like short volatility plus credit risk. Investors surrender Uber’s upside, accept 100 % loss potential below the barrier, and rely on RBC solvency. The automatic call can terminate the income stream early, creating reinvestment risk if markets rally. Lack of active secondary liquidity compounds mark-to-market uncertainty. Given these factors and the discounted initial value, I view the offer as risk-heavy relative to reward, appropriate only within a well-diversified alternatives sleeve.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What coupon rate do Royal Bank of Canada (RY) Auto-Callable Notes linked to UBER pay?
When can the RY notes be automatically called?
What happens at maturity if Uber stock drops more than 35 %?
Why is the initial estimated value ($898-$948) below the $1,000 issue price?
Do investors receive any benefit if Uber stock rises sharply?
Is there secondary market trading for these notes?
AI-generated analysis. How Rhea-AI works. Not financial advice.
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Due June 30, 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 the Underlier is greater than or equal to the 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 the Underlier is greater than or equal to the 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 beginning approximately six months following the Trade Date, the closing value of the Underlier is greater than or equal to the 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 is greater than or equal to the 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 is less than the Barrier 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. |
| KEY TERMS | |
| Issuer: | Royal Bank of Canada (“RBC”) |
| CUSIP: | 78017PBJ9 |
| Underlier: | The common stock of Uber Technologies, Inc. (Bloomberg symbol “UBER UN”) |
| Trade Date: | June 26, 2025 |
| Issue Date: | June 30, 2025 |
| Valuation Date: | June 27, 2028 |
| Maturity Date: | June 30, 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 the Underlier is greater than or equal to the 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 the Underlier is less than the Coupon Threshold on the immediately preceding Coupon Observation Date. |
| Contingent Coupon: | If payable, [$25.625-$28.125] per $1,000 principal amount of Notes (corresponding to a rate of [2.5625%-2.8125%] per quarter or [10.25%-11.25%] per annum), to be determined on the Trade Date |
| Coupon Observation Dates: | Quarterly |
| Coupon Payment Dates: | Quarterly |
| KEY TERMS (continued) | |
| Call Feature: | If, on any 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 $1,000 plus the Contingent Coupon and any unpaid Contingent Coupons otherwise due. No further payments will be made on the Notes. |
| Call Observation Dates: | Quarterly, beginning approximately six months following the Trade Date |
| 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 $1,000 principal amount of Notes, in addition to any Contingent Coupon and any unpaid Contingent Coupons otherwise due: · If the Final Underlier Value is greater than or equal to the Barrier Value: $1,000 · If the Final Underlier Value is less than the Barrier Value, an amount equal to: $1,000 + ($1,000 × Underlier Return) If the Notes are not automatically called and the Final Underlier Value is less than the Barrier Value, you will lose a substantial portion or all of your principal amount at maturity. |
| Coupon Threshold and Barrier Value: | 65% of the Initial Underlier Value |
| Underlier Return: | Final Underlier Value – Initial Underlier Value Initial Underlier Value |
| Initial Underlier Value: | The closing value of the Underlier on the Trade Date |
| Final Underlier Value: | The closing value of the Underlier on the Valuation Date |
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/1000275/000095010325007565/dp230362_424b2-us2702.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 $898.00 and $948.00 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.
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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. |
| · | You Will Not Participate in Any Appreciation of the 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 Underlier 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 the 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