Pricing Supplement
(To the Prospectus dated September 7, 2018, the Prospectus Supplement dated September 7, 2018, and the Product Prospectus Supplement dated
September 10, 2018)
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Filed Pursuant to Rule 424(b)(2)
Registration No. 333-227001
June 10, 2019
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$1,800,000
Phoenix Autocallable Notes with Memory Coupon due June 24, 2020
Linked to the Common Stock of DocuSign, Inc.
Senior Global Medium-Term Notes, Series H
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The Notes are designed for investors who wish to receive Contingent Coupons (as defined below) if (i) on any of the Observation Dates (other than the final
Observation Date), the closing price of the common stock of DocuSign, Inc. (the “Reference Stock”) or (ii) with respect to the final Observation Date, the Final Stock Price (as defined below) is at or above the Coupon Barrier (as
defined below). Investors should be willing to forgo fixed interest and dividend payments, in exchange for the opportunity to receive a Contingent Coupon for each Observation Date. Due to the memory feature described below, a Contingent
Coupon that is not payable on a Coupon Payment Date may be paid on a subsequent Coupon Payment Date or at maturity.
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Investors in the Notes should be willing to accept the risk of receiving shares of the Reference Stock that are worth less than the principal amount and the risk
that no Contingent Coupon payment may be made with respect to some or all of the Observation Dates. Contingent Coupon payments should not be viewed as periodic interest payments.
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The Notes are subject to automatic call if the closing price of the Reference Stock on any Observation Date (other than the final Observation Date) is at or above
the Initial Stock Price. If the Notes are not automatically called and the Final Stock Price is below the Trigger Price (as defined below), investors will be exposed on a leveraged basis to the depreciation in the Reference Stock.
Investors in the Notes should be willing to accept this risk of loss. All payments on the Notes are subject to our credit risk.
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Senior unsecured obligations of Royal Bank of Canada maturing June 24, 2020.(a)
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Minimum denominations of $10,000 and integral multiples of $1,000 in excess thereof.
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The Notes priced on June 10, 2019 (the “trade date”) and will be issued on June 13, 2019 (the “issue date”).
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Key Terms
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Terms used in this pricing supplement, but not defined herein, will have the
meanings ascribed to them in the product prospectus supplement.
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Issuer:
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Royal Bank of Canada
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Reference Stock:
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The common stock of DocuSign, Inc. (Bloomberg symbol: “DOCU”)
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Observation Dates:
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September 19, 2019, December 19, 2019, March 19, 2020 and June 19, 2020(a)
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Coupon Payment Dates:
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Three business days following each Observation Date, except that the final Coupon Payment Date will be the maturity date.
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Contingent Coupons and
Memory Feature:
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The Contingent Coupon will be paid on each Coupon Payment Date if (i) the closing price of the Reference Stock on the
applicable Observation Date (other than the final Observation Date) or (ii) with respect to the final Observation Date, the Final Stock Price, is at or above the Coupon Barrier. If the Contingent Coupon is not payable on any Coupon Payment
Date, it will be paid on any later Coupon Payment Date (or at maturity) on which the Contingent Coupon is payable, together with the payment otherwise due on that later date. For the avoidance of doubt, once a previously unpaid Contingent
Coupon has been paid on a later Coupon Payment Date, it will not be paid again on a subsequent date.
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Contingent Coupon:
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$33.50 per $1,000 in principal amount of the Notes, if payable.
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Coupon Barrier and
Trigger Price:
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$33.71, which is 70% of the Initial Stock Price (rounded to two decimal places)
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Call Feature:
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If the closing price of the Reference Stock on any Observation Date (other than the final Observation Date) is at or
above the Initial Stock Price, the Notes will be automatically called for a cash payment equal to the principal amount plus the applicable Contingent Coupon for the applicable Observation Date, together with any previously unpaid Contingent
Coupons.
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Call Settlement Dates:
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The Coupon Payment Date corresponding to the applicable Observation Date.
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Payment at Maturity:
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If the Notes are not called and on the final Observation Date:
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the Final Stock Price is at or above the Trigger Price, then you will receive a cash amount equal to the principal amount plus the Contingent Coupon otherwise due
on the maturity date and any previously unpaid Contingent Coupons with respect to the prior Coupon Payment Dates; or
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the Final Stock Price is below the Trigger Price, then you will receive, for each $1,000 in principal amount of the Notes, the Physical Delivery Amount, which we
expect to be worth less than the principal amount, and you may lose some or all of your investment.
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Physical Delivery
Amount:
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29.66, which is equal to $1,000 divided by the Trigger Price (rounded to two decimal places). If the number of shares
that we are required to deliver to you is not a round number, then the number of shares of the Reference Stock to be delivered will be rounded down and the fractional shares will be paid in cash.
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Initial Stock Price:
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$48.16, which was the closing price of one share of the Reference Stock on June 7, 2019.
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Final Stock Price:
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The arithmetic average of the closing prices of one share of the Reference Stock on each of the Valuation Dates.
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Valuation Dates:
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June 15, 2020, June 16, 2020, June 17, 2020, June 18, 2020 and the final Observation Date(a)
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Maturity Date:
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June 24, 2020(a)
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CUSIP/ISIN:
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78013GHF5/US78013GHF54
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Estimated Value:
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The initial estimated value of the Notes as of the trade date was $985.19 per $1,000 in principal amount, which is less
than the price to public. The actual value of the Notes at any time will reflect many factors, cannot be predicted with accuracy, and may be less than this amount.
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Price to Public1
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Underwriting Commission2
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Proceeds to Royal Bank of Canada
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Per Note
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$1,000
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$10
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$990
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Total
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$1,800,000
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$18,000
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$1,782,000
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Observation Dates Prior to the Final Observation Date
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Final Observation Date
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||||||
Reference Stock Price
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Percentage Change
in the Value of the
Reference Stock at
Observation Date
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Payment on
Coupon Payment
Date or Call
Settlement Date
(as applicable)(1)(2)
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Return on the
Notes
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Final Stock
Price(3)
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Underlying
Return at
Final
Observation
Date
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Payment at Maturity(2)(4)
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Return on the
Notes(5)
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$180.00
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80.00%
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$1,033.50
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3.35%
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$180.00
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80.00%
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$1,033.50
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3.35%
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$170.00
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70.00%
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$1,033.50
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3.35%
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$170.00
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70.00%
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$1,033.50
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3.35%
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$160.00
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60.00%
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$1,033.50
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3.35%
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$160.00
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60.00%
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$1,033.50
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3.35%
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$150.00
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50.00%
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$1,033.50
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3.35%
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$150.00
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50.00%
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$1,033.50
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3.35%
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$140.00
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40.00%
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$1,033.50
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3.35%
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$140.00
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40.00%
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$1,033.50
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3.35%
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$130.00
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30.00%
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$1,033.50
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3.35%
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$130.00
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30.00%
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$1,033.50
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3.35%
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$120.00
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20.00%
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$1,033.50
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3.35%
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$120.00
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20.00%
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$1,033.50
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3.35%
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$110.00
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10.00%
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$1,033.50
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3.35%
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$110.00
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10.00%
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$1,033.50
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3.35%
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$105.00
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5.00%
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$1,033.50
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3.35%
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$105.00
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5.00%
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$1,033.50
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3.35%
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$100.00
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0.00%
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$1,033.50
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3.35%
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$100.00
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0.00%
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$1,033.50
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3.35%
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$95.00
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-5.00%
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$33.50
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3.35%
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$95.00
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-5.00%
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$1,033.50
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3.35%
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$90.00
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-10.00%
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$33.50
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3.35%
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$90.00
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-10.00%
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$1,033.50
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3.35%
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$80.00
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-20.00%
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$33.50
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3.35%
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$80.00
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-20.00%
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$1,033.50
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3.35%
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$70.00
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-30.00%
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$33.50
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3.35%
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$70.00
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-30.00%
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$1,033.50
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3.35%
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$60.00
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-40.00%
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$0.00
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0.00%
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$60.00
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-40.00%
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14.2857 shares of the Reference Stock: $857.14
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-14.29%
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$50.00
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-50.00%
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$0.00
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0.00%
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$50.00
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-50.00%
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14.2857 shares of the Reference Stock: $714.29
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-28.57%
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$40.00
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-60.00%
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$0.00
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0.00%
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$40.00
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-60.00%
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14.2857 shares of the Reference Stock: $571.43
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-42.86%
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$30.00
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-70.00%
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$0.00
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0.00%
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$30.00
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-70.00%
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14.2857 shares of the Reference Stock: $428.57
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-57.14%
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$20.00
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-80.00%
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$0.00
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0.00%
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$20.00
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-80.00%
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14.2857 shares of the Reference Stock: $285.71
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-71.43%
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$10.00
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-90.00%
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$0.00
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0.00%
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$10.00
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-90.00%
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14.2857 shares of the Reference Stock: $142.86
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-85.71%
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$0.00
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-100.00%
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$0.00
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0.00%
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$0.00
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-100.00%
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14.2857 shares of the Reference Stock: $0.00
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-100.00%
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Capped Appreciation Potential — The return potential of the
Notes is limited to the Contingent Coupons and you will not participate in any appreciation in the price of the Reference Stock, which may be significant.
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Potential Early Redemption as a Result of Automatic Call Feature
— While the original term of the Notes is just over one year, the Notes will be called before maturity if the closing price of the Reference Stock is at or above the Initial Stock Price on the applicable Observation Date (other than the
final Observation Date). In such a case, you will receive the principal amount plus the applicable Contingent Coupon corresponding to that Observation Date, plus any previously unpaid Contingent Coupons with respect to prior Observation
Dates.
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Contingent Protection Against Loss — If the Notes are not
automatically called and the Final Stock Price is at or above the Trigger Price, you will be entitled to receive the full principal amount of your Notes at maturity (plus the applicable Contingent Coupon and any previously unpaid
Contingent Coupons with respect to prior Observation Dates). If the Notes are not automatically called and the Final Stock Price is less than the Trigger Price, you will receive the Physical Delivery Amount, and you will lose
approximately 1.42857% of the principal amount of your Notes for every 1% that the Final Stock Price is less than the Trigger Price (measured as of the final Valuation Date). If you receive shares of the Reference Stock, they may
decrease in value between the Valuation Dates and the maturity date, further reducing your return on the Notes. Under these circumstances, you may lose up to your entire principal amount.
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Principal at Risk — Investors in the Notes could lose all or a
substantial portion of their principal amount if there is a decline in the Reference Stock below the Trigger Price and the Notes are not automatically called. As of the final Valuation Date, the value of the Physical Delivery Amount
will represent a loss of 1.42857% of the principal amount for each 1% that the Final Stock Price is less than the Trigger Price.
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Contingent Repayment of Principal Applies Only at Maturity —
You should be willing to hold your Notes to maturity. If you sell your Notes prior to maturity in the secondary market, if any, you may have to sell your Notes at a loss relative to your initial investment even if the price of the
Reference Stock is above the Trigger Price.
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You May Not Receive Any Contingent Coupons — Investors in the
Notes will not necessarily receive Contingent Coupons on the Notes. If (i) the closing price of the Reference Stock on an Observation Date (other than the final Observation Date) or (ii) with respect to the final Observation Date, the
Final Stock Price, is less than the Coupon Barrier, investors will not receive the Contingent Coupon applicable to that Observation Date. If the closing price of the Reference Stock is less than the Coupon Barrier on each of the
Observation Dates (other than the final Observation Date) and the Final Stock Price is less than the Coupon Barrier, investors will not receive any Contingent Coupons during the term of the Notes, and will not receive a positive return
on the Notes. Contingent Coupon payments should not be viewed as periodic interest payments. Generally, this non-payment of the Contingent Coupon coincides with a period of greater risk of principal loss on the Notes. Notwithstanding
the memory feature described above, there can be no assurance that any unpaid Contingent Coupon will become payable during the term of the notes.
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Your Return May Be Lower than the Return on a Conventional Debt
Security of Comparable Maturity — The return that you will receive on the Notes, which could be negative, may be less than the return you could earn on other investments. Even if your return is positive, your return may be
less than the return you would earn if you bought one of our conventional senior interest bearing debt securities.
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Reinvestment Risk — If your Notes are automatically called, the
term of the Notes may be as short as approximately three months. There is no guarantee that you would be able to reinvest the proceeds from an investment in the Notes at a comparable return for a similar level of risk if the Notes are
automatically called prior to the maturity date. In addition, for the avoidance of doubt, the fees and commissions described in this document will not be rebated or subject to amortization if the Notes are called.
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Credit of Issuer — The Notes are our senior unsecured debt
securities. As a result, all payments on the Notes are dependent upon our ability to repay our obligations at that time. This will be the case even if the Reference
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There May Not Be an Active Trading Market for the Notes—Sales in the
Secondary Market May Result in Significant Losses — There may be little or no secondary market for the Notes. The Notes will not be listed on any securities exchange. RBCCM and our other affiliates may make a market for the
Notes; however, they are not required to do so. RBCCM or any other affiliate of ours may stop any market-making activities at any time. Even if a secondary market for the Notes develops, it may not provide significant liquidity or
trade at prices advantageous to you. We expect that transaction costs in any secondary market would be high. As a result, the difference between bid and asked prices for your Notes in any secondary market could be substantial.
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If You Receive Shares of the Reference Stock at Maturity, the Value of
Those Shares May Be Less on the Maturity Date than on the Valuation Dates – If the Final Stock Price is less than the Trigger Price, at maturity you may receive a number of shares of the Reference Stock equal to the Physical
Delivery Amount. Under these circumstances, the value of the Physical Delivery Amount as of the final Valuation Date could decrease further during the period between the final Valuation Date and the maturity date. We will make no
adjustments to the Physical Delivery Amount to account for any fluctuations in the price of the Reference Stock, and you will bear the risk of any decrease in the price of the Reference Stock and consequently, the value of the Physical
Delivery Amount between the final Valuation Date and the maturity date.
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Owning the Notes Is Not the Same as Owning the Reference Stock
— The return on your Notes may not reflect the return you would realize if you actually owned the Reference Stock. For instance, as a holder of the Notes, you will not have voting rights, rights to receive cash dividends or other
distributions, or any other rights that holders of the Reference Stock would have (unless you receive shares of the Reference Stock at maturity). Further, you will not participate in any appreciation of the Reference Stock, which could
be significant.
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There Is No Affiliation Between Us and the Issuer of the Reference
Stock, and We Are Not Responsible for any Disclosure by that Company — We are not affiliated with the issuer of the Reference Stock. However, we and our affiliates may currently, or from time to time in the future engage in
business with the issuer of the Reference Stock. Nevertheless, neither we nor our affiliates assume any responsibilities for the accuracy or the completeness of any information about the Reference Stock that the issuer of the Reference
Stock prepares. You, as an investor in the Notes, should make your own investigation into the Reference Stock and the issuer of the Reference Stock. The issuer of the Reference Stock is not involved in this offering and has no
obligation of any sort with respect to your Notes. The issuer of the Reference Stock has no obligation to take your interests into consideration for any reason, including when taking any corporate actions that might affect the value of
your Notes.
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Single Stock Risk — The price of the Reference Stock can rise
or fall sharply due to factors specific to the Reference Stock and its issuer, such as stock price volatility, earnings, financial conditions, corporate, industry and regulatory developments, management changes and decisions and other
events, as well as general market factors, such as general stock market volatility and levels, interest rates and economic and political conditions. We urge you to review financial and other information filed periodically with the SEC
by the issuer of the Reference Stock.
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Many Economic and Market Factors Will Impact the Value of the Notes
— In addition to the price of the Reference Stock on any day, the value of the Notes will be affected by a number of economic and market factors that may either offset or magnify each other, including:
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the expected volatility of the Reference Stock;
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the time to maturity of the Notes;
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the dividend rate on the Reference Stock;
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interest and yield rates in the market generally;
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a variety of economic, financial, political, regulatory or judicial events; and
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our creditworthiness, including actual or anticipated downgrades in our credit ratings.
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The Estimated Initial Value of the Notes Is Less than the Price to the
Public — The estimated initial value that is set forth on the cover page of this pricing supplement does not represent a minimum price at which we,
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The Estimated Initial Value of the Notes Is an Estimate Only,
Calculated as of the Pricing Date — The value of the Notes at any time after the pricing date will vary based on many factors, including changes in market conditions, and cannot be predicted with accuracy. As a result, the
actual value you would receive if you sold the Notes in any secondary market, if any, should be expected to differ materially from the estimated initial value of your Notes.
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Market Disruption Events and Adjustments — Whether the Notes
will be called prior to maturity, the payment upon an automatic call or at maturity, the Observation Dates, the Valuation Dates and the Reference Stock are subject to adjustment as described in the product prospectus supplement and this
pricing supplement. For a description of what constitutes a market disruption event as well as the consequences of that market disruption event and the unavailability of the price of the Reference Stock on an Observation Date or
Valuation Date, see “Market Disruption Events on a Valuation Date” below, and “General Terms of the Notes—Payment at Maturity” and “—Market Disruption Events” in the product prospectus supplement. In addition, certain events that may
occur at or prior to maturity, which are beyond our control, could result in us delivering cash to you in lieu of the Physical Delivery Amount, as described in the section below, “Cash Delivery Amount.”
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Antidilution Adjustments — For certain corporate events
affecting the Reference Stock, the calculation agent may make adjustments to the terms of the Notes. However, the calculation agent will not make such adjustments in response to all events that could affect the Reference Stock. If an
event occurs that does not require the calculation agent to make such adjustments, the value of the Notes may be materially and adversely affected. In addition, all determinations and calculations concerning any such adjustments will be
made in the sole discretion of the calculation agent, which will be binding on you absent manifest error. You should be aware that the calculation agent may make any such adjustment, determination or calculation in a manner that differs
from that discussed in this document or the product prospectus supplement as necessary to achieve an equitable result.
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The Business Activities of Royal Bank and Our Affiliates May Create
Conflicts of Interest — We and our affiliates expect to engage in trading activities related to the Reference Stock that are not for the account of holders of the Notes or on their behalf. These trading activities may present
a conflict between the holders’ interests in the Notes and the interests we and our affiliates will have in their proprietary accounts, in facilitating transactions, including options and other derivatives transactions, for their
customers and in accounts under their management. These trading activities, if they influence the price of the Reference Stock, could be adverse to the interests of the holders of the Notes. We and one or more of our affiliates may,
at present or in the future, engage in business with the issuer of the Reference Stock, including making loans to or providing advisory services. These services could include investment banking and merger and acquisition advisory
services. These activities may present a conflict between our or one or more of our affiliates’ obligations, and your interests as a holder of the Notes. Moreover, we and our affiliates may have published, and in the future expect to
publish, research reports with respect to the Reference Stock. This research is modified from time to time without notice and may express opinions or provide recommendations that are inconsistent with purchasing or holding the Notes.
Any of these activities may affect the price of the Reference Stock and, therefore, the market value of the Notes.
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The Reference Stock Has Limited Historical Information — The
Reference Stock commenced trading in April 2018. Because this Reference Stock has a limited trading history, your investment in the Notes may involve a greater risk than investing in securities linked to one or more equity securities
with a more established record of performance.
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