Filed Pursuant to Rule 433
Registration Statement 333-259205
CAPPED NOTES WITH ABSOLUTE RETURN BUFFER
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Capped Notes with Absolute Return Buffer Linked to an International Equity Index Basket
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Issuer
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Royal Bank of Canada (“RBC”)
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Principal Amount
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$10.00 per unit
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Term
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Approximately two years
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Market Measure
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An international equity index basket comprised of the EURO STOXX 50® Index (Bloomberg symbol: “SX5E”), the FTSE® 100 Index (Bloomberg symbol: “UKX”), the Nikkei Stock Average (Bloomberg
symbol: “NKY”), the Swiss Market Index (Bloomberg symbol: “SMI”), the S&P/ASX 200 Index (Bloomberg symbol: “AS51”) and the FTSE® China 50 Index (Bloomberg symbol: “XIN0I”). The EURO STOXX 50® Index will be given
an initial weight of 40.00%, each of the FTSE® 100 Index and the Nikkei Stock Average will be given an initial weight of 20.00%, each of the Swiss Market Index and the S&P/ASX 200 Index will be given an initial weight of
7.50%, and the FTSE® China 50 Index will be given an initial weight of 5.00%.
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Payout Profile at
Maturity
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• 1-to-1 upside exposure to increases in the Market Measure, subject to the Capped Value
• A positive return equal to the absolute value of the percentage decline in the level of the Market Measure, but only if the Market Measure does not
decline by more than [13.00% to 19.00%] (e.g., if the negative return of the Market Measure is -5.00%, you will receive a positive return of +5.00%)
• 1-to-1 downside exposure to decreases in the Market Measure beyond a [13.00% to 19.00%] decline, with up to [87.00% to 81.00%] of your principal at risk
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Capped Value
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$12.50 per unit, a 25.00% return over the principal amount
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Threshold Value
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[87.00% to 81.00%] of the Starting Value of the Market Measure, to be determined on the pricing date.
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Investment
Considerations
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This investment is designed for investors who anticipate that the Market Measure will either increase moderately over the term of the notes or decrease to a level which is not below the Threshold Value, and
are willing to accept a capped return, take downside risk below a threshold and forgo interim interest payments.
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Preliminary
Offering
Documents
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https://www.sec.gov/Archives/edgar/data/1000275/000114036123026881/brhc20053403_fwp.htm |
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Exchange Listing
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No
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Depending on the performance of the Market Measure as measured shortly before the maturity date, your investment may result in a loss; there is no guaranteed return of principal.
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Any positive return on the notes is limited. The notes provide for a positive return if the level of the Market Measure increases or does not decrease by more than [13.00% to 19.00%]. However, any positive
return on the notes based on the appreciation of the Market Measure will be limited to the return represented by the Capped Value. In addition, the absolute value return feature applies only if the Ending Value is less than the Starting
Value but is greater than or equal to the Threshold Value. Because the Threshold Value will be [87.00% to 81.00%] of the Starting Value, any positive return due to the depreciation of the Market Measure will be limited to [13.00% to
19.00%]. The actual Threshold Value, and by extension, the cap on the positive return due to the depreciation of the Market Measure, will be determined on the pricing date. Any decline in the Ending Value from the Starting Value by more
than [13.00% to 19.00%] will result in a loss, rather than a positive return, on the notes.
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Payments on the notes, including repayment of principal, are subject to the credit risk of RBC. If RBC becomes insolvent or is unable to pay its obligations, you may lose your entire investment.
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Your investment return may be less than a comparable investment directly in the stocks included in the Basket Components.
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Changes in the level of one Basket Component may be offset by changes in the level of the other Basket Components.
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The initial estimated value of the notes on the pricing date will be less than their public offering price.
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If you attempt to sell the notes prior to maturity, their market value may be lower than both the public offering price and the initial estimated value of the notes on the pricing date.
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You will have no rights of a holder of the securities represented by the Basket Components, and you will not be entitled to receive securities or dividends or other distributions by the issuers of those
securities.
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RBC, MLPF&S, BofAS and their respective affiliates do not control any company included in the Basket Components, and have not verified any disclosure made by any other company.
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Your return on the notes may be affected by factors affecting the international securities markets, specifically changes in the countries represented by the Basket Components. In addition, you will not obtain
the benefit of any increase in the value of the currencies in which the securities included in the Basket Components trade against the U.S. dollar, which you would have received if you had owned the securities in the Basket Components
during the term of your notes, although the value of the Basket Components may be adversely affected by general exchange rate movements in the market.
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Hypothetical
Percentage Change
from the Starting
Value to the Ending
Value
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Hypothetical
Redemption Amount
per Unit
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Hypothetical Total Rate of
Return on the Notes
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-100.00%
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$1.60
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-84.00%
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-50.00%
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$6.60
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-34.00%
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-40.00%
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$7.60
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-24.00%
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-20.00%
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$9.60
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-4.00%
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-16.00%(1)
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$11.60
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16.00%
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-10.00%
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$11.00
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10.00%
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-5.00%
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$10.50
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5.00%
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-3.00%
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$10.30
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3.00%
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0.00%
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$10.00
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0.00%
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2.00%
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$10.20
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2.00%
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4.00%
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$10.40
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4.00%
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10.00%
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$11.00
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10.00%
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20.00%
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$12.00
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20.00%
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25.00% |
$12.50(2)
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25.00% |
30.00%
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$12.50
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25.00%
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40.00%
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$12.50
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25.00%
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(1)
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This hypothetical percentage change corresponds to the hypothetical Threshold Value.
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(2)
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Any positive return based on the appreciation of the Market Measure cannot exceed the return represented by the Capped Value.
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