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Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-227001
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Pricing Supplement
Dated January 25, 2021
To the Product Prospectus Supplement Dated September 10, 2018, the Prospectus Supplement Dated September 7, 2018 and the Prospectus Dated September 7, 2018
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$930,000
Reverse Convertible Notes Linked to the
Common Stock of The Boeing Company,
Due January 30, 2023
Royal Bank of Canada
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Issuer:
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Royal Bank of Canada
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Stock Exchange Listing:
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None
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Trade Date:
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January 25, 2021
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Principal Amount:
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$1,000 per Note
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Issue Date:
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January 28, 2021
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Maturity Date:
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January 30, 2023
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Coupon Payment:
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Each coupon will be paid in equal monthly payments.
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Final Stock Price:
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The closing price of the Reference Stock on the Valuation Date.
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Payment at Maturity
(if held to maturity):
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We will pay an amount at maturity based on the Final Stock Price. For each $1,000 in principal amount of the Notes, the investor will receive at maturity $1,000 plus accrued and unpaid
interest, unless the Final Stock Price is less than the Barrier Price.
If the Final Stock Price is less than the Barrier Price, then the investor will receive at maturity, instead of the principal amount, in addition to accrued and unpaid interest, for each
$1,000 in principal amount, the number of shares of the Reference Stock equal to the Physical Delivery Amount, or at our election, the cash value of those shares.
Investors could lose some or all of their principal amount if the Final Stock Price of the Reference Stock is less than the Barrier Price.
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Physical Delivery
Amount:
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For each $1,000 in principal amount, a number of shares of the Reference Stock equal to the principal amount divided by the Initial Stock Price, subject to adjustment as described in the product prospectus
supplement.
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Monitoring Period:
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The Valuation Date.
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Reference Stock
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Annual
Coupon Rate
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Initial
Stock
Price
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Barrier
Price*
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CUSIP/ISIN
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Principal
Amount
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Price to
Public(1)
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Underwriting
Discounts and
Commissions(1)
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Proceeds to
Royal Bank of
Canada
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The Boeing Company (BA)
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7.50%
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$203.36
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$142.35, which is 70% of the Initial Stock Price
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78013GG82/
US 78013GG822
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$930,000
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100%
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$20,925
2.25%
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$909,075
97.75%
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Reverse Convertible Notes
Royal Bank of Canada
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General:
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This pricing supplement relates to an offering of Reverse Convertible Notes (the “Notes”) linked to the common stock (the “Reference Stock”) of The Boeing Company (the
“Reference Stock Issuer”).
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Issuer:
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Royal Bank of Canada (“Royal Bank”)
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Trade Date (Pricing
Date):
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January 25, 2021
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Issue Date:
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January 28, 2021
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Valuation Date:
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January 25, 2023
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Maturity Date:
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January 30, 2023
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Denominations:
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Minimum denomination of $1,000, and integral multiples of $1,000 thereafter.
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Designated Currency:
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U.S. Dollars
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Coupon Rate:
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7.50% per annum. Each coupon will be paid in equal monthly payments on the applicable Coupon Payment Date.
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Coupon Payment
Dates:
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March 2, 2021, March 30, 2021, April 29, 2021, May 28, 2021, June 30, 2021, July 29, 2021, August 30, 2021, September 30,
2021, October 28, 2021, December 1, 2021, December 30, 2021, January 28, 2022, March 2, 2022, March 30, 2022, April 28, 2022, May 31, 2022, June 30, 2022, July 28, 2022, August 30, 2022, September 29, 2022, October 28, 2022, November 30,
2022, December 30, 2022 and the Maturity Date.
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Record Dates:
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The record date for each Coupon Payment Date will be one business day prior to that scheduled Coupon Payment Date; provided, however, that the Coupon Payment at maturity
will be payable to the person to whom the payment at maturity will be payable.
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Initial Stock Price:
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The closing price of the Reference Stock on the Trade Date, as set forth on the cover page of this pricing supplement.
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Barrier Price:
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70% of the Initial Stock Price, as set forth on the cover page of this pricing supplement.
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Final Stock Price:
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The closing price of the Reference Stock on the Valuation Date.
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Payment at Maturity (if
Notes are held to
maturity):
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For each $1,000 in principal amount of the Notes, the investor will receive $1,000 plus accrued and unpaid interest at maturity, unless the Final Stock Price is less than the Barrier Price.
If the Final Stock Price is less than the Barrier Price, then the investor will receive at maturity, in addition to accrued and unpaid interest, for each $1,000 in principal amount of the Notes, the number of shares of the Reference Stock
equal to the Physical Delivery Amount, or at our election, the Cash Delivery Amount. If we elect to deliver shares of the Reference Stock, fractional shares will be paid in cash.
The value of the cash or shares that you would receive in this case will be less than your principal amount, if anything, resulting in a loss that is proportionate to the decline of the
Reference Stock from the Trade Date to the Valuation Date.
Investors in the Notes could lose some or all of their principal amount if the Final Stock Price of the Reference Stock is less than the Barrier Price.
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Reverse Convertible Notes
Royal Bank of Canada
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Physical Delivery
Amount:
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For each $1,000 in principal amount, 4.92, which is the number of shares equal to $1,000 divided by the Initial Stock Price of the Reference Stock, rounded to two decimal places. The
Physical Delivery Amount is subject to adjustment as described in the product prospectus supplement. Fractional shares will be paid in cash.
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Cash Delivery
Amount:
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The product of the Physical Delivery Amount multiplied by the Final Stock Price of the Reference Stock.
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Monitoring Period:
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The Valuation Date. The price of the Reference Stock between the Trade Date and the Valuation Date will not impact the Payment at Maturity.
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Monitoring Method:
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Close of Trading Day
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Early Redemption:
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The Notes are not subject to redemption prior to maturity, whether at our option, or based upon the closing price of the Reference Stock.
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Calculation Agent:
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RBC Capital Markets, LLC (“RBCCM”)
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U.S. Tax Treatment:
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By purchasing a Note, each holder agrees (in the absence of a change in law, an administrative determination or a judicial ruling to the contrary) to treat the Notes as an investment unit
consisting of (i) a non-contingent debt instrument issued by us to you and (ii) a put option with respect to the Reference Stock written by you and purchased by us.
However, the U.S. federal income tax consequences of your investment in the Notes are uncertain and the Internal Revenue Service could assert that the Notes should be taxed in a manner that is different from that
described in the preceding sentence. Please see the section below, “Supplemental Discussion of U.S. Federal Income Tax Consequences,” and the discussion (including the opinion of our counsel Morrison & Foerster LLP) in the product
prospectus supplement dated September 10, 2018 under “Supplemental Discussion of U.S. Federal Income Tax Consequences,” which apply to the Notes.
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Secondary Market:
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RBCCM (or one of its affiliates), though not obligated to do so, may maintain a secondary market in the Notes after the issue date. The amount that you may receive upon sale of your Notes prior to maturity may be
less than the principal amount.
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Listing:
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The Notes will not be listed on any securities exchange.
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Settlement:
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DTC global (including through its indirect participants Euroclear and Clearstream, Luxembourg as described under “Description of Debt Securities—Ownership and Book-Entry Issuance” in the
prospectus dated September 7, 2018).
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Terms Incorporated in
the Master Note:
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All of the terms appearing on the cover page and above the item captioned “Secondary Market” on pages P-2 and P-3 of this pricing supplement and the terms appearing under the caption “General Terms of the Notes”
in the product prospectus supplement, as modified by this pricing supplement.
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Reverse Convertible Notes
Royal Bank of Canada
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Reverse Convertible Notes
Royal Bank of Canada
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Hypothetical Final
Stock Price of the
Reference Stock
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Payment at Maturity as Percentage of Principal
Amount
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Physical Delivery
Amount as Number
of Shares of the
Reference Stock
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Cash Delivery
Amount
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$150.00
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100.00%
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n/a
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n/a
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$125.00
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100.00%
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n/a
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n/a
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$100.00
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100.00%
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n/a
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n/a
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$90.00
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100.00%
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n/a
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n/a
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$80.00
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100.00%
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n/a
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n/a
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$70.00
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100.00%
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n/a
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n/a
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$69.99
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Physical Delivery Amount or Cash Settlement Amount
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10
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$699.90
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$60.00
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Physical Delivery Amount or Cash Settlement Amount
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10
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$600.00
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$50.00
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Physical Delivery Amount or Cash Settlement Amount
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10
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$500.00
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$40.00
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Physical Delivery Amount or Cash Settlement Amount
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10
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$400.00
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$30.00
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Physical Delivery Amount or Cash Settlement Amount
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10
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$300.00
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$20.00
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Physical Delivery Amount or Cash Settlement Amount
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10
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$200.00
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$10.00
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Physical Delivery Amount or Cash Settlement Amount
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10
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$100.00
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$0
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Physical Delivery Amount or Cash Settlement Amount
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10
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$0.00
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Reverse Convertible Notes
Royal Bank of Canada
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Reverse Convertible Notes
Royal Bank of Canada
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You May Lose Some or All of the Principal Amount at Maturity — Investors in the Notes could lose all or a substantial portion of their principal amount if there is a
decline in the closing price of the Reference Stock between the Trade Date and the Valuation Date. If the Final Stock Price is less than the Barrier Price, the value of the shares or the amount of cash that you receive at maturity will
represent a loss of your principal that is proportionate to the decline in the closing price of the Reference Stock from the Trade Date to the Valuation Date. If we deliver shares of the Reference Stock to you, they may further decline in
value between the Valuation Date and the maturity date. The rate of interest payable on the Notes may not be sufficient to compensate for any such loss.
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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 purchased one of our conventional senior
interest bearing debt securities.
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Payments on the Notes Are Subject to Our Credit Risk, and Changes in Our Credit Ratings Are Expected to Affect the Market Value of the Notes — The Notes are our senior
unsecured debt securities. As a result, the amount due on any relevant payment date is dependent upon our ability to repay our obligations on that date. This will be the case even if the price of the Reference Stock increases after the
Trade Date. No assurance can be given as to what our financial condition will be during the term of the Notes.
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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 of our other affiliates 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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The Initial Estimated Value of the Notes Is Less than the Price to the Public —The initial estimated value that is set forth on the cover page of this pricing supplement
does not represent a minimum price at which we, RBCCM or any of our affiliates would be willing to purchase the Notes in any secondary market (if any exists) at any time. If you attempt to sell the Notes prior to maturity, their market
value may be lower than the price you paid for them and the initial estimated value. This is due to, among other things, changes in the price of the Reference Stock, the borrowing rate we pay to issue securities of this kind, and the
inclusion in the price to the public of the underwriting discount and the estimated costs relating to our hedging of the Notes. These factors, together with various credit, market and economic factors over the term of the Notes, are
expected to reduce the price at which you may be able to sell the Notes in any secondary market and will affect the value of the Notes in complex and unpredictable ways. Assuming no change in market conditions or any other relevant
factors, the price, if any, at which you may be able to sell your Notes prior to maturity may be less than your original purchase price, as any such sale price would not be expected to include the underwriting discount and the hedging costs
relating to the Notes. In addition to bid-ask spreads, the value of the Notes determined by RBCCM for any secondary market price is expected to be based on the secondary rate rather than the internal
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Reverse Convertible Notes
Royal Bank of Canada
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The Initial Estimated Value of the Notes on the Cover Page of this Pricing Supplement Is an Estimate Only, Calculated as of the Time the Terms of the Notes Were Set —The
initial estimated value of the Notes is based on the value of our obligation to make the payments on the Notes, together with the mid-market value of the derivative embedded in the terms of the Notes. See “Structuring the Notes” below.
Our estimate is based on a variety of assumptions, including our credit spreads, expectations as to dividends, interest rates and volatility, and the expected term of the Notes. These assumptions are based on certain forecasts about future
events, which may prove to be incorrect. Other entities may value the Notes or similar securities at a price that is significantly different than we do.
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Our Business Activities 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 prices 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 Reference Stock Issuer, 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 by us or one or more of our affiliates may affect the price of the Reference Stock, and, therefore, the market value of the Notes.
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You Must Rely on Your Own Evaluation of the Merits of an Investment Linked to the Reference Stock — In the ordinary
course of their business, our affiliates may have expressed views on expected movements in the Reference Stock, and may do so in the future. These views or reports may be communicated to our clients and clients of our affiliates. However,
these views are subject to change from time to time. Moreover, other professionals who transact business in markets relating to the Reference Stock may at any time have significantly different views from those of our affiliates. For these
reasons, you are encouraged to derive information concerning the Reference Stock from multiple sources, and you should not rely solely on views expressed by our affiliates.
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Owning the Notes Is Not the Same as Owning the Reference Stock — The return on your Notes is unlikely to reflect the return you would realize if you actually owned the
Reference Stock. For instance, you will not receive or be entitled to receive any dividend payments or other distributions on the Reference Stock during the term of your Notes. As an owner of the Notes, you will not have voting rights or
any other rights that holders of the Reference Stock may have. Furthermore, the Reference Stock may appreciate substantially during the term of the Notes, while your potential return will be limited to the Coupon Payments.
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There Is No Affiliation Between the Reference Stock Issuer and RBCCM, and RBCCM Is Not Responsible for any Disclosure by the Reference Stock Issuer — We are not affiliated
with the Reference
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Reverse Convertible Notes
Royal Bank of Canada
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The Payments on the Notes Are Subject to Postponement Due to Market Disruption Events and Adjustments —The payment at maturity and the Valuation Date are subject to
adjustment as described in the product prospectus supplement. For a description of what constitutes a market disruption event as well as the consequences of that market disruption event, see “General Terms of the Notes—Consequences of
Market Disruption Events” in the product prospectus supplement.
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Reverse Convertible Notes
Royal Bank of Canada
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Reverse Convertible Notes
Royal Bank of Canada
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Reverse Convertible Notes
Royal Bank of Canada
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Reverse Convertible Notes
Royal Bank of Canada
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Reverse Convertible Notes
Royal Bank of Canada
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