ROYAL BANK OF CANADA (RY) SEC Filings, Jul 11-14, 2025

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.

Royal Bank of Canada (RY) is offering US$11.4 million of Trigger Autocallable Contingent Yield Notes due 13 July 2028 linked to the worst performer of the Russell 2000 Index (RTY) and the EURO STOXX 50 Index (SX5E). The notes pay a quarterly contingent coupon of 2.05 % (8.20 % p.a.) only if on the relevant observation date each underlying closes at or above its coupon barrier, set at 70 % of its initial value (RTY 1,576.743; SX5E 3,811.96). Beginning six months after trade date, the notes will be automatically called at par plus the coupon if both indices are at or above their respective initial values.

If not called, principal is protected only if, on the final valuation date (10 Jul 2028), the worst-performing index is at or above its 70 % downside threshold. Otherwise investors receive $10 + ($10 × worst index return), exposing them to up to 100 % loss of principal. All payments are senior unsecured obligations of RY and depend on its creditworthiness.

• Issue price: $10.00 per note; minimum investment $1,000.
• Initial estimated value: $9.70 per note, below the public offering price.
• Distribution: UBS receives a $0.20 per-note selling concession; RBC Capital Markets acts as calculation agent and may make markets but is not obliged to do so.
• Liquidity: Unlisted; secondary market, if any, expected to exhibit wide bid/ask spreads and pricing below issue price.
• Key risks: potential loss of principal, credit risk, no guaranteed coupons, correlation risk between RTY and SX5E, early-call reinvestment risk, tax uncertainty, and exposure to Canadian bank resolution powers.

The product targets investors who can tolerate full downside exposure to the least-performing index, are comfortable with holding to maturity, and are seeking enhanced contingent income rather than direct equity upside.

Royal Bank of Canada (RY) has filed a 424B2 preliminary pricing supplement for an Auto-Callable Contingent Coupon Barrier Note linked to the Class A subordinate voting shares of Shopify Inc. (SHOP). The $1,000-denominated senior unsecured notes will be issued on 25 July 2025, mature on 27 August 2026, and form part of RBC’s Senior Global Medium-Term Notes, Series J.

Key economic terms

• Contingent coupon: 1.21% monthly (14.52% p.a.) paid only if the underlying share closes ≥56 % of its Initial Value on the relevant observation date. Investors may receive zero coupons for the entire term.
• Automatic call: From the sixth observation date (22 Jan 2026) onward, the notes will be redeemed at par plus the current coupon if SHOP closes ≥ its Initial Value on any monthly call date—potentially after just six months.
• Barrier / coupon threshold: 56 % of Initial Value. If at final valuation (24 Aug 2026) SHOP is <56 %, holders receive a physical delivery of SHOP shares (or cash for fractions) worth only 1/Initial Value × $1,000, exposing investors to up to 100 % principal loss.
• Initial estimated value: expected between $916 and $966 per $1,000 note—3.4 %-8.4 % below public offer price. This reflects underwriting fees (1.50 %), referral fees (up to $6.50 per $1,000), hedging costs and RBC’s lower internal funding rate.
• Liquidity: Unlisted; secondary market, if any, will be made solely by RBCCM and could involve wide bid-ask spreads.
• Credit exposure: Senior unsecured obligation of RBC; payments subject to RBC credit risk and Canadian bail-in legislation exclusion.

Risk highlights

• Investors do not participate in any upside of SHOP; maximum return equals received coupons.
• Principal is at risk below the 56 % barrier; hypothetical table shows losses accelerate one-for-one beyond –44 % underlying decline.
• Possible early call limits income compounding and reinvestment options.
• Tax treatment is uncertain; Davis Polk opines prepaid financial contract characterization but IRS could disagree; non-U.S. holders may face 30 % withholding.
• Initial value discount and lack of active market may result in significant secondary-market losses.

The filing is preliminary; final pricing supplement will confirm the Initial Value, barrier level and initial estimated value.

Royal Bank of Canada (RY) is issuing $250,000 principal amount of three-year Barrier Digital Notes linked to the common stock of Zscaler, Inc. (NASDAQ: ZS). The notes provide a fixed 33.50% digital return at maturity if ZS’s closing price on 10 July 2028 is at least 50% of its initial level ($316.50 ➞ barrier $158.25). If ZS closes below the barrier, principal is repaid on a 1-for-1 downside basis, exposing investors to a loss of up to 100% of invested capital.

Key commercial terms: issue price 100%, minimum investment $1,000; trade date 9 July 2025, issue date 14 July 2025, maturity 13 July 2028. The initial estimated value is $972.17 per $1,000, 2.8% lower than the public offering price, reflecting underwriting fees (2.50%) and hedging costs. The notes carry no periodic interest, are senior unsecured obligations of RBC, and will not be listed on an exchange. Payments are subject to RBC’s credit risk.

Illustrative payoff: any Underlier return ≥ -50% results in the same $1,335 per $1,000 payout (133.5%). Returns below –50% incur proportional capital loss; e.g., a –60% Underlier return pays $400 (-60%).

Investor considerations: the structure caps upside well below potential equity performance, offers no coupon, and features significant downside if ZS falls more than 50%. Secondary market liquidity is uncertain, the initial value is below issue price, and tax treatment under U.S. rules is uncertain. The note is principal-at-risk and intended for buy-and-hold accounts comfortable with both RBC credit exposure and single-stock volatility.