Royal Bk Can SEC Filings

Royal Bank of Canada (RY) has filed a preliminary 424(b)(2) pricing supplement for Auto-Callable Fixed Coupon Barrier Notes due 21 July 2028. The notes are senior unsecured obligations linked to the least-performing of two U.S. equities: Freeport-McMoRan Inc. (FCX) and Palo Alto Networks, Inc. (PANW). Investors receive a fixed coupon of 10.20% per annum (0.85% monthly, $8.50 per $1,000) for any month the notes remain outstanding.

• Call feature: Starting ~6 months after issuance, the notes are automatically called at par plus the monthly coupon if the closing price of each underlier is at or above its initial value on any quarterly observation date. If called, no further coupons accrue.
• Barrier protection: If not called, principal is protected only if the final price of the worst performer is ≥ 60 % of its initial value. Otherwise, holders receive physical delivery of that stock (or cash for fractional shares), potentially worth substantially less than par.
• Key dates: Trade Date 18 Jul 2025, Issue Date 23 Jul 2025, Valuation Date 18 Jul 2028, Maturity 21 Jul 2028.
• Pricing details: Price to public 100%; underwriting discount 2.50%; estimated initial value $900 – $950 per $1,000, below issue price, reflecting fees and hedging costs.
• Liquidity & credit: The notes will not be listed. Secondary trading, if any, will be at the discretion of RBC Capital Markets, LLC (calculation agent and underwriter). Payments are subject to RBC’s credit risk.

Risk highlights (page P-7): potential loss of up to 100% of principal, dependence on worst-performing stock, limited upside (coupons only), early-call reinvestment risk, uncertain U.S. tax treatment, and lack of active secondary market.

Royal Bank of Canada (RY) is marketing two Series J senior unsecured structured notes — Auto-Callable Contingent Coupon Barrier Notes with a “memory” coupon feature — linked separately to PayPal Holdings, Inc. (PYPL) and QUALCOMM Incorporated (QCOM). The securities are offered under the bank’s December 20 2023 shelf registration and are governed by the prospectus, prospectus supplement and Product Supplement No. 1A.

Economic terms

• Principal: $1,000 minimum, $500,000 aggregate per tranche
• Strike Date: 9 Jul 2025  |  Issue: 15 Jul 2025  |  Maturity: 13 Jul 2028 (3-yr term)
• Coupon rates (paid quarterly if conditions met): 10.15 % p.a. (PYPL) and 10.90 % p.a. (QCOM)
• Coupon/Barrier thresholds: 70 % of initial value (PYPL = $52.38; QCOM = $111.55)
• Automatic call: From the 4th observation date (9 Jul 2026) onward, notes are redeemed at par + accrued coupons if the underlier ≥ initial value.
• Principal protection: contingent. If not called and final underlier ≥ barrier, investors receive par; otherwise they receive a fixed number of shares (13.36 PYPL or 6.28 QCOM) worth the depressed value, exposing them to up to a 100 % loss.

Pricing & distribution

• Public offering price: 100 % of principal; underwriting discount 2.35 % ($23.50 per $1,000).
• Initial estimated value: $974.53 (PYPL) and $969.12 (QCOM) — 2.5-3 % below issue price, reflecting internal funding and hedge costs.
• Dealer concessions of up to $23.50 may be re-allowed; fee-based accounts may buy between 97.65 %–100 % of par.

Risk highlights

• Equity risk: Investors bear downside below a 30 % buffer; no upside participation.
• Credit risk: Payments depend solely on RBC’s ability to pay; notes are senior unsecured, not CDIC/FDIC insured and “non-bail-inable.”
• Liquidity: Unlisted; secondary market, if any, only through RBCCM, with wide bid-ask spreads.
• Tax: Treated as prepaid financial contracts with ordinary-income coupons; treatment uncertain and subject to possible future IRS/Treasury changes.

Investor profile: The notes target yield-seeking investors who are moderately bullish-to-neutral on PYPL or QCOM over three years, can tolerate full principal loss, and are comfortable with RBC credit exposure and secondary-market illiquidity.