 |
Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-259205
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Pricing Supplement
Dated October 24, 2023
To the Product Prospectus Supplement ERN-ES-1 Dated August 1, 2023, and the Prospectus Supplement and the Prospectus, Each Dated
September 14, 2021
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$1,515,000
Buffered Return Notes Linked to a Basket
of Five Common Stocks, Due November
29, 2024
Royal Bank of Canada
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||
Royal Bank of Canada is offering Buffered Return Notes (the “Notes”) linked to the performance of an equally-weighted basket (the “Basket”) consisting of five equity securities (each, a
“Basket Component”).
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Basket Component
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Component Weight
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Initial Stock Price
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Microsoft Corporation (“MSFT”)
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1/5
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$330.53
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||
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Meta Platforms, Inc. (“META”)
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1/5
|
$312.55
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||
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Amazon.com, Inc. (“AMZN”)
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1/5
|
$128.56
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||
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Apple Inc. (“AAPL”)
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1/5
|
$173.44
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||
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Netflix, Inc. (“NFLX”)
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1/5
|
$413.73
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| • |
The Notes provide a positive return equal to the Percentage Change if the value of the Basket increases, subject to the Maximum Redemption Amount of 116.35% of the principal amount of the Notes.
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| • |
If the Final Basket Level is less than the Initial Basket Level by no more than 20%, investors will receive the principal amount. However, investors will lose 1% of the principal amount of the Notes for
each 1% decrease from the Initial Basket Level to the Final Basket Level of more than 20%.
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| • |
All payments on the Notes are subject to our credit risk.
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| • |
The Notes do not pay interest.
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| • |
The Notes will not be listed on any securities exchange.
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Issue Date: October 27, 2023
Maturity Date: November 29, 2024
CUSIP: 78016NV20
Investing in the Notes involves a number of risks. See “Selected Risk Considerations” beginning on page P-7 of this pricing supplement, “Risk Factors” beginning on page PS-4 of
the product prospectus supplement dated August 1, 2023, and “Risk Factors” beginning on page S-2 of the prospectus supplement dated September 14, 2021.
The Notes will not constitute deposits insured by the Canada Deposit Insurance Corporation, the U.S. Federal Deposit Insurance Corporation or any other Canadian or U.S.
government agency or instrumentality. The Notes are not subject to conversion into our common shares under subsection 39.2(2.3) of the Canada Deposit Insurance Corporation Act.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Notes or determined that this pricing supplement is truthful
or complete. Any representation to the contrary is a criminal offense.
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Per Note
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Total
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||
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Price to public(1)
|
100.00%
|
$1,515,000
|
|
|
Underwriting discounts and commissions(1)
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0.65%
|
$9,847.50
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|
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Proceeds to Royal Bank of Canada
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99.35%
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$1,505,152.50
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(1) We or one of our affiliates may pay varying selling concessions of up to $6.50 per $1,000 in principal amount of the Notes in connection with the distribution of
the Notes to other registered broker dealers. Certain dealers who purchase the Notes for sale to certain fee-based advisory accounts may forego some or all of their underwriting discount or selling concessions. The public offering price for
investors purchasing the Notes in these accounts may be between $993.50 and $1,000 per $1,000 in principal amount. See “Supplemental Plan of Distribution (Conflicts of Interest)” below.
The initial estimated value of the Notes as of the Trade Date was $977.09 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. We describe our determination of the initial estimated value in more detail below.
RBC Capital Markets, LLC
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|
|
Buffered Return Notes
Linked to a Basket of Five Common Stocks
|
SUMMARY
The information in this “Summary” section is qualified by the more detailed information set forth in this pricing supplement, the product prospectus
supplement, the prospectus supplement, and the prospectus.
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Issuer:
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Royal Bank of Canada (the “Bank”)
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Underwriter:
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RBC Capital Markets, LLC (“RBCCM”)
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Reference Assets:
|
The Notes are linked to the value of a basket (the “Basket”) of five equity securities (each, a “Basket Component,” collectively, the “Basket Components”). The Basket Components
and their respective Component Weights are indicated in the table on the cover page of this document.
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Denominations:
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$1,000 and minimum denominations of $1,000 in excess thereof
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|
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Trade Date (Pricing
Date):
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October 24, 2023
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Issue Date:
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October 27, 2023
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Valuation Date:
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November 25, 2024
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Maturity Date:
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November 29, 2024
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Payment at Maturity
(if held to maturity):
|
If the Final Basket Level is greater than the Initial Basket Level (that is, the Percentage Change is positive), then the investor will receive, for each $1,000 in principal amount, the
lesser of:
1. $1,000 + [$1,000 x (Percentage Change x Participation Rate)] and
2. The Maximum Redemption Amount
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If the Final Basket Level is less than or equal to the Initial Basket Level, but is not
less than the Buffer Level (that is, the Percentage Change is between 0% and -20%), then the investor will receive the principal amount.
If the Final Basket Level is less than the Buffer Level (that is, the Percentage Change is between -20.01% and -100%), then the investor will receive, for each $1,000 in principal amount:
$1,000 + [$1,000 x (Percentage Change + Buffer Percentage)]
In this case, the payment on the Notes will be less than the principal amount, and you could lose some or a substantial portion of the principal amount.
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||
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Maximum
Redemption
Amount:
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$1,163.50 per $1,000 in principal amount (116.35% multiplied by the principal amount)
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Participation Rate:
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100%
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Buffer Percentage:
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20%
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Initial Basket Level:
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100
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Buffer Level:
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80
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|
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Buffered Return Notes
Linked to a Basket of Five Common Stocks
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Final Basket Level:
|
The Final Basket Level will be calculated as follows:
100 x [1 + (the sum of, for each Basket Component, the Basket Component return multiplied by its Component Weight)]
Each of the Basket Component returns set forth above refers to the percentage change from the applicable Initial Stock Price to the applicable Final Stock Price, calculated as follows:
Final Stock Price – Initial Stock Price
Initial Stock Price
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Percentage
Change:
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The Percentage Change of the Basket, expressed as a percentage and rounded to two decimal places, will be equal to:
Final Basket Level – Initial Basket Level
Initial Basket Level
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Initial Stock Price:
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With respect to each Basket Component, its closing price per share on the Trade Date, as set forth on the cover page of this pricing supplement.
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Final Stock Price:
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With respect to each Basket Component, its closing price on the Valuation Date.
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Principal at Risk:
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The Notes are NOT principal protected. You may lose a substantial portion of your principal amount at
maturity if the Final Basket Level is less than 80.
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Calculation Agent:
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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 Note as a pre-paid
cash-settled derivative contract linked to the Basket Components for U.S. federal income tax purposes. 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 Ashurst LLP, our special U.S. tax counsel) in the product prospectus supplement dated August 1, 2023 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 substantially less than the principal amount of your Notes.
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Listing:
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The Notes will not be listed on any securities exchange.
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Clearance and
Settlement: |
DTC global (including through its indirect participants Euroclear and Clearstream, Luxembourg as described under “Ownership and Book-Entry Issuance” in the prospectus
dated September 14, 2021).
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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” in this section and the terms appearing under the caption “General Terms of
the Notes” in the product prospectus supplement dated August 1, 2023, as modified by this pricing supplement.
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Buffered Return Notes
Linked to a Basket of Five Common Stocks
|
ADDITIONAL TERMS OF YOUR NOTES
You should read this pricing supplement together with the prospectus dated September 14, 2021, as supplemented by the prospectus supplement dated September 14, 2021 and the
product prospectus supplement dated August 1, 2023, relating to our Senior Global Medium-Term Notes, Series I, of which these Notes are a part. Capitalized terms used but not defined in this pricing supplement will have the meanings given to
them in the product prospectus supplement. In the event of any conflict, this pricing supplement will control. The Notes vary from the terms described in the product prospectus supplement
in several important ways. You should read this pricing supplement carefully.
This pricing supplement, together with the documents listed below, contains the terms of the Notes and supersedes all prior or contemporaneous oral statements as well as any
other written materials including preliminary or indicative pricing terms, correspondence, trade ideas, structures for implementation, sample structures, brochures or other educational materials of ours. You should carefully consider, among
other things, the matters set forth in “Risk Factors” in the prospectus supplement dated September 14, 2021 and in the product prospectus supplement dated August 1, 2023, as the Notes involve risks not associated with conventional debt
securities. We urge you to consult your investment, legal, tax, accounting and other advisors before you invest in the Notes. You may access these documents on the Securities and Exchange Commission (the “SEC”) website at www.sec.gov as
follows (or if that address has changed, by reviewing our filings for the relevant date on the SEC website):
Prospectus dated September 14, 2021:
Prospectus Supplement dated September 14, 2021:
Product Prospectus Supplement ERN-ES-1 dated August 1, 2023:
Our Central Index Key, or CIK, on the SEC website is 1000275. As used in this pricing supplement, “we,” “us,” or “our” refers to Royal Bank of Canada.
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Buffered Return Notes
Linked to a Basket of Five Common Stocks
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HYPOTHETICAL RETURNS
The examples set out below are included for illustration purposes only. The hypothetical Percentage Changes of the Basket used to
illustrate the calculation of the Payment at Maturity are not estimates or forecasts of the price of any Basket Component on any trading day prior to the Maturity Date. All examples are based on the Initial Basket Level of 100, the Buffer
Percentage of 20%, resulting in a Buffer Level of 80 and the Maximum Redemption Amount of 116.35% of the principal amount, and assume that a holder purchased Notes with an aggregate principal amount of $1,000.00 and that no market disruption
event occurs on the Valuation Date.
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Example 1 —
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Calculation of the Payment at Maturity where the Percentage Change is positive.
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|
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Percentage Change:
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5%
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|
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Payment at Maturity:
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$1,000 + [$1,000 x (5% x 100%)] = $1,000 + $50 = $1,050.00
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On a $1,000 investment, a 5% Percentage Change results in a Payment at Maturity of $1,050.00, a 5.00% return on the Notes.
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Example 2 —
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Calculation of the Payment at Maturity where the Percentage Change is positive (and the Payment at Maturity is subject to the Maximum Redemption Amount).
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|
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Percentage Change:
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20%
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|
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Payment at Maturity:
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$1,000 + [$1,000 x (20% x 100%)] = $1,000 + $200 = $1,200.00
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|
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On a $1,000 investment, a 20% Percentage Change result would result in a Payment at Maturity of $1,163.50. However, the Maximum Redemption Amount is $1,163.50.
Accordingly, the payment on the Notes will be $1,163.50, equal to a return of 16.35%.
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Example 3 —
|
Calculation of the Payment at Maturity where the Percentage Change is negative (but not by more than the Buffer Percentage).
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|
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Percentage Change:
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-5%
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|
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Payment at Maturity:
|
$1,000
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|
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On a $1,000 investment, a -5% Percentage Change results in a Payment at Maturity of $1,000, a 0% return on the Notes.
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Example 4 —
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Calculation of the Payment at Maturity where the Percentage Change is negative (by more than the Buffer Percentage).
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Percentage Change:
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-40%
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|
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Payment at Maturity:
|
$1,000 + [$1,000 x (-40% + 20%)] = $1,000 - $200 = $800
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|
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On a $1,000 investment, a -40% Percentage Change results in a Payment at Maturity of $800, a -20% return on the Notes.
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||
| |
|
|
Buffered Return Notes
Linked to a Basket of Five Common Stocks
|
The table set forth below is included for illustration purposes only. The table illustrates the hypothetical Redemption Amount of the Notes for a hypothetical range of
performance for the Basket, based on the Initial Basket Level of 100, the Buffer Level of 80, the Buffer Percentage of 20%, the Participation Rate of 100%, and the Maximum Redemption Amount of 116.35% of the principal amount.
Hypothetical Final Basket Levels are shown in the first column on the left. The second column shows the hypothetical Percentage Changes for these hypothetical Final Basket
Levels. The third column shows the Redemption Amount for these hypothetical Final Basket Levels, expressed as a percentage of the principal amount of the Notes. The fourth column shows the Redemption Amount to be paid on the Notes per $1,000
in principal amount.
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Hypothetical Final
Basket Level
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Hypothetical
Percentage Change
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Redemption Amount as
Percentage of Principal Amount
|
Redemption Amount per $1,000
in Principal Amount
|
|
140.00
|
40.00%
|
116.35%
|
$1,163.50
|
|
130.00
|
30.00%
|
116.35%
|
$1,163.50
|
|
120.00
|
20.00%
|
116.35%
|
$1,163.50
|
|
116.35
|
16.35%
|
116.35%
|
$1,163.50
|
|
110.00
|
10.00%
|
110.00%
|
$1,100.00
|
|
105.00
|
5.00%
|
105.00%
|
$1,050.00
|
|
102.50
|
2.50%
|
102.50%
|
$1,025.00
|
|
100.00
|
0.00%
|
100.00%
|
$1,000.00
|
|
98.00
|
-2.00%
|
100.00%
|
$1,000.00
|
|
95.00
|
-5.00%
|
100.00%
|
$1,000.00
|
|
90.00
|
-10.00%
|
100.00%
|
$1,000.00
|
|
80.00
|
-20.00%
|
100.00%
|
$1,000.00
|
|
70.00
|
-30.00%
|
90.00%
|
$900.00
|
|
60.00
|
-40.00%
|
80.00%
|
$800.00
|
|
40.00
|
-60.00%
|
60.00%
|
$600.00
|
|
20.00
|
-80.00%
|
40.00%
|
$400.00
|
|
10.00
|
-90.00%
|
30.00%
|
$300.00
|
|
0.00
|
-100.00%
|
20.00%
|
$200.00
|
| |
|
|
Buffered Return Notes
Linked to a Basket of Five Common Stocks
|
SELECTED RISK CONSIDERATIONS
An investment in the Notes involves significant risks. Investing in the Notes is not equivalent to investing directly in any Basket Component. These risks are explained in
more detail in the section “Risk Factors” in the product prospectus supplement. In addition to the risks described in the prospectus supplement and the product prospectus supplement, you should consider the following:
Risks Relating to the Terms of the Notes
| • |
You May Receive Less Than the Principal Amount at Maturity — Investors in the Notes will lose some or a substantial
portion of their principal amount if the Final Basket Level is less than the Buffer Level. In such a case, you will lose 1% of the principal amount of your Notes for each 1% that the Percentage Change is less than -20%. You could
lose up to 80% of the principal amount at maturity.
|
| • |
The Notes Do Not Pay Interest and Your Return May Be Lower than the Return on a Conventional Debt Security of Comparable Maturity — There will be no periodic interest payments on the Notes as there would be on a conventional fixed-rate or floating-rate debt security having the same 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.
|
| • |
Your Potential Payment at Maturity Is Limited — The Notes will provide less opportunity to participate in the
appreciation of the Basket Components than an investment in a security linked to the Basket Components providing full participation in the appreciation, because the payment at maturity will not exceed the Maximum Redemption Amount.
Accordingly, your return on the Notes may be less than your return would be if you made an investment in a security directly linked to the positive performance of the Basket.
|
| • |
You Will Not Have Any Rights to the Basket Components — As a holder of the Notes, you will not have voting rights or
rights to receive cash dividends or other distributions or other rights that holders of a Basket Component would have. The Final Stock Prices of the Basket Components will not reflect any dividends paid on the securities included in
the Basket Components; accordingly, any positive return on the Notes may be less than the potential positive return on those securities.
|
| • |
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, your receipt of the amount due on the maturity date is dependent upon our ability to repay our obligations at that time. This will be the case
even if the value of the Basket increases after the Trade Date. No assurance can be given as to what our financial condition will be at the maturity of the Notes.
|
| • |
Changes in the Price of One Basket Component May Be Offset by Changes in the Prices of the Other Basket Components — A
change in the price of one Basket Component may not correlate with changes in the prices of the other Basket Components. The price of one Basket Component may increase, while the prices of the other Basket Components may not
increase as much, or may even decrease. Therefore, in determining the value of the Basket as of any time, increases in the price of one Basket Component may be moderated, or wholly offset, by lesser increases or decreases in the
prices of the other Basket Components.
|
Risks Relating to the Secondary Market for the Notes
| • |
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
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| |
|
|
Buffered Return Notes
Linked to a Basket of Five Common Stocks
|
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.
Risks Relating to the Estimated Value of the Notes
| • |
The Initial Estimated Value of the Notes Is Less than the Price to the Public — The initial estimated value of the
Notes 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 value of the Basket,
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 or the hedging costs relating to the Notes. In addition to bid-ask spreads, the value of the Notes determined for any secondary market price is expected to be based on the
secondary rate rather than the internal funding rate used to price the Notes and determine the initial estimated value. As a result, the secondary price will be less than if the internal funding rate was used. The Notes are not
designed to be short-term trading instruments. Accordingly, you should be able and willing to hold your Notes to maturity.
|
| • |
The Initial Estimated Value of the Notes that Is Set Forth on the Cover Page of this Pricing Supplement Is an Estimate Only, Calculated as of the Time the
Terms of the Notes Are 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.
|
The value of the Notes at any time after the Trade 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 initial estimated value of your Notes.
Risks Relating to Conflicts of Interest and Our Trading Activities
| • |
Our Business Activities May Create Conflicts of Interest — We and our affiliates expect to engage in trading
activities related to the Basket 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 Basket Components, 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 issuers of the Basket
Components (the “Basket Component Issuers”), 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 Basket Components. 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 prices of the Basket Components, and, therefore, the market value of the Notes.
|
| |
|
|
Buffered Return Notes
Linked to a Basket of Five Common Stocks
|
Risks Relating to the Basket Components
| • |
The Basket Components Are Concentrated in One Sector — All of the Basket Components are issued by companies in the technology sector. Although an investment in the
Notes will not give holders any ownership or other direct interests in the Basket Components, the return on an investment in the Notes will be subject to certain risks associated with a direct equity investment in companies in the
technology sector. Accordingly, by investing in the Notes, you will not benefit from the diversification which could result from an investment linked to companies that operate in multiple sectors.
|
| • |
There Is No Affiliation Between the Basket Component Issuers and RBCCM, and RBCCM Is Not Responsible for any Disclosure by the Basket Component Issuers — We are not affiliated with the Basket Component Issuers. However, we and our affiliates may currently, or from time to time in the future, engage in business with the Basket Component Issuers. Nevertheless,
neither we nor our affiliates assume any responsibilities for the accuracy or the completeness of any information that any other company prepares. You, as an investor in the Notes, should make your own investigation into the Basket
Components. The Basket Component Issuers are not involved in this offering and have no obligation of any sort with respect to your Notes. The Basket Component Issuers have 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.
|
| • |
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—Market
Disruption Events” in the product prospectus supplement.
|
| |
|
|
Buffered Return Notes
Linked to a Basket of Five Common Stocks
|
INFORMATION REGARDING THE BASKET COMPONENT ISSUERS
The Basket Components are registered under the Securities Exchange Act of 1934 (the “Exchange Act”). Companies with securities registered under that Act are required to file periodically certain
financial and other information specified by the SEC. Information filed with the SEC can be obtained through the SEC’s website at www.sec.gov. In addition, information regarding the Basket Components may be obtained from other sources
including, but not limited to, press releases, newspaper articles and other publicly disseminated documents.
The following information regarding the Basket Component Issuers is derived from publicly available information.
We have not independently verified the accuracy or completeness of reports filed by the Basket Component Issuers with the SEC, information published by it on its website or in any other format,
information about it obtained from any other source or the information provided below.
Microsoft Corporation (“MSFT”)
Microsoft Corporation operates as a software company. The company offers applications, cloud storage, and security solutions.
The company’s common stock is listed on the Nasdaq Global Select Market under the ticker symbol “MSFT.”
Meta Platforms, Inc. (“META”)
Meta Platforms, Inc. operates as a social technology company. The company builds applications and technologies that help people connect, find communities, and grow
businesses.
The company’s common stock is listed on the Nasdaq Global Select Market under the ticker symbol “META.”
Amazon.com, Inc. (“AMZN”)
Amazon.com, Inc. is an online retailer that offers a wide range of products. The company’s products include books, music, computers, electronics, and numerous other
products.
The company’s common stock is listed on the Nasdaq Global Select Market under the ticker symbol “AMZN.”
Apple Inc. (“AAPL”)
Apple Inc. designs, manufactures and markets personal computers and related personal computing and mobile communication devices along with related software, services,
peripherals, and networking solutions. The company sells its products through its online stores, its retail stores, its direct sales force, third-party wholesalers, and resellers.
The company’s common stock is listed on the Nasdaq Global Select Market under the ticker symbol “AAPL.”
Netflix, Inc. (“NFLX”)
Netflix, Inc. operates as a subscription streaming service and production company. The company offers a wide variety of TV shows, movies, anime, and documentaries on
internet-connected devices.
The company’s common stock is listed on the Nasdaq Global Select Market under the ticker symbol “NFLX.”
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Buffered Return Notes
Linked to a Basket of Five Common Stocks
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HISTORICAL INFORMATION
The graphs below set forth the information relating to the historical performance of the Basket Components from January 1, 2013 to October 24, 2023. We obtained the information
in the graphs below from Bloomberg Financial Markets.
We have not independently verified the accuracy or completeness of the information obtained from Bloomberg Financial Markets. The historical performance of any Basket Component should not be
taken as an indication of its future performance, and no assurance can be given as to the prices of the Basket Components, or the value of the Basket, at any time.
Microsoft Corporation (“MSFT”)
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
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Buffered Return Notes
Linked to a Basket of Five Common Stocks
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Meta Platforms, Inc. (“META”)
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
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Buffered Return Notes
Linked to a Basket of Five Common Stocks
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Amazon.com, Inc. (“AMZN”)
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
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Buffered Return Notes
Linked to a Basket of Five Common Stocks
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Apple Inc. (“AAPL”)
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
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Buffered Return Notes
Linked to a Basket of Five Common Stocks
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Netflix, Inc. (“NFLX”)
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
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Buffered Return Notes
Linked to a Basket of Five Common Stocks
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SUPPLEMENTAL DISCUSSION OF
U.S. FEDERAL INCOME TAX CONSEQUENCES
The following disclosure supplements, and to the extent inconsistent supersedes, the discussion in the product prospectus supplement dated August 1, 2023 under “Supplemental Discussion of U.S.
Federal Income Tax Consequences.”
Under Section 871(m) of the Code, a “dividend equivalent” payment is treated as a dividend from sources within the United States. Such payments generally would be subject to a 30% U.S. withholding
tax if paid to a non-U.S. holder. Under U.S. Treasury Department regulations, payments (including deemed payments) with respect to equity-linked instruments (“ELIs”) that are “specified ELIs” may be treated as dividend equivalents if such
specified ELIs reference, directly or indirectly, an interest in an “underlying security,” which is generally any interest in an entity taxable as a corporation for U.S. federal income tax purposes if a payment with respect to such interest
could give rise to a U.S. source dividend. However, the Internal Revenue Service (the “IRS”) has issued guidance that states that the U.S. Treasury Department and the IRS intend to amend the effective dates of the U.S. Treasury Department
regulations to provide that withholding on dividend equivalent payments will not apply to specified ELIs that are not delta-one instruments and that are issued before January 1, 2025. Based on our determination that the Notes are not
delta-one instruments, non-U.S. holders should not be subject to withholding on dividend equivalent payments, if any, under the Notes. However, it is possible that the Notes could be treated as deemed reissued for U.S. federal income tax
purposes upon the occurrence of certain events affecting the Basket Components or the Notes, and following such occurrence the Notes could be treated as subject to withholding on dividend equivalent payments. Non-U.S. holders that enter, or
have entered, into other transactions in respect of the Basket Components or the Notes should consult their tax advisors as to the application of the dividend equivalent withholding tax in the context of the Notes and their other
transactions. If any payments are treated as dividend equivalents subject to withholding, we (or the applicable withholding agent) would be entitled to withhold taxes without being required to pay any additional amounts with respect to
amounts so withheld.
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Buffered Return Notes
Linked to a Basket of Five Common Stocks
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SUPPLEMENTAL PLAN OF DISTRIBUTION (CONFLICTS OF INTEREST)
Delivery of the Notes will be made against payment for the Notes on October 27, 2023, which is the third (3rd) business day following the Trade Date (this settlement cycle being
referred to as “T+3”). See “Plan of Distribution” in the prospectus dated September 14, 2021. For additional information as to the relationship between us and RBCCM, please see the section “Plan of Distribution—Conflicts of Interest” in the
prospectus dated September 14, 2021.
We will deliver the Notes on a date that is greater than two business days following the Trade Date. Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to
settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Notes more than two business days prior to the original issue date will be required to specify
alternative settlement arrangements to prevent a failed settlement.
In the initial offering of the Notes, they will be offered to investors at a purchase price equal to par, except with respect to certain accounts as indicated on the cover page
of this document. In addition to the underwriting discount set forth on the cover page of this document, we or one of our affiliates may also pay an expected fee to a broker-dealer that is unaffiliated with us for providing certain electronic
platform services with respect to this offering.
The value of the Notes shown on your account statement may be based on RBCCM’s estimate of the value of the Notes if RBCCM or another of our affiliates were to make a market in
the Notes (which it is not obligated to do). That estimate will be based upon the price that RBCCM may pay for the Notes in light of then prevailing market conditions, our creditworthiness and transaction costs. For a period of approximately
three months after the issue date of the Notes, the value of the Notes that may be shown on your account statement may be higher than RBCCM’s estimated value of the Notes at that time. This is because the estimated value of the Notes will not
include the underwriting discount or our hedging costs and profits; however, the value of the Notes shown on your account statement during that period may be a higher amount, reflecting the addition of RBCCM’s underwriting discount and our
estimated costs and profits from hedging the Notes. This excess is expected to decrease over time until the end of this period. After this period, if RBCCM repurchases your Notes, it expects to do so at prices that reflect their estimated
value.
We may use this pricing supplement in the initial sale of the Notes. In addition, RBCCM or another of our affiliates may use this pricing supplement in a market-making transaction in the Notes
after their initial sale. Unless we or our agent informs the purchaser otherwise in the confirmation of sale, this pricing supplement is being used in a market-making transaction.
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Buffered Return Notes
Linked to a Basket of Five Common Stocks
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STRUCTURING THE NOTES
The Notes are our debt securities, the return on which is linked to the performance of the Basket Components. As is the case for all of our debt securities, including our
structured notes, the economic terms of the Notes reflect our actual or perceived creditworthiness at the time of pricing. In addition, because structured notes result in increased operational, funding and liability management costs to us, we
typically borrow the funds under these Notes at a rate that is more favorable to us than the rate that we might pay for a conventional fixed or floating rate debt security of comparable maturity. Using this relatively lower implied borrowing
rate rather than the secondary market rate, is a factor that reduced the initial estimated value of the Notes at the time their terms were set. Unlike the estimated value that is set forth on the cover page of this pricing supplement, any
value of the Notes determined for purposes of a secondary market transaction may be based on a different funding rate, which may result in a lower value for the Notes than if our initial internal funding rate were used.
In order to satisfy our payment obligations under the Notes, we may choose to enter into certain hedging arrangements (which may include call options, put options or other
derivatives) on the issue date with RBCCM or one of our other subsidiaries. The terms of these hedging arrangements take into account a number of factors, including our creditworthiness, interest rate movements, the volatility of the Basket
Components, and the tenor of the Notes. The economic terms of the Notes and their initial estimated value depend in part on the terms of these hedging arrangements.
The lower implied borrowing rate is a factor that reduced the economic terms of the Notes to you. The initial offering price of the Notes also reflects the underwriting discount
and our estimated hedging costs. These factors resulted in the initial estimated value for the Notes on the Trade Date being less than their public offering price. See “Selected Risk Considerations—The Initial Estimated Value of the Notes Is
Less than the Price to the Public” above.
VALIDITY OF THE NOTES
In the opinion of Norton Rose Fulbright Canada LLP, the issue and sale of the Notes has been duly authorized by all necessary corporate action of the Bank in conformity with the
Indenture, and when the Notes have been duly executed, authenticated and issued in accordance with the Indenture and delivered against payment therefor, the Notes will be validly issued and, to the extent validity of the Notes is a matter
governed by the laws of the Province of Ontario or Québec, or the laws of Canada applicable therein, will be valid obligations of the Bank, subject to equitable remedies which may only be granted at the discretion of a court of competent
authority, subject to applicable bankruptcy, to rights to indemnity and contribution under the Notes or the Indenture which may be limited by applicable law, to insolvency and other laws of general application affecting creditors’ rights, to
limitations under applicable limitations statutes, and to limitations as to the currency in which judgments in Canada may be rendered, as prescribed by the Currency Act (Canada). This opinion is given as of the date hereof and is limited to
the laws of the Provinces of Ontario and Québec and the federal laws of Canada applicable thereto. In addition, this opinion is subject to customary assumptions about the Trustee’s authorization, execution and delivery of the Indenture and
the genuineness of signatures and certain factual matters, all as stated in the letter of such counsel dated September 14, 2021, which has been filed as Exhibit 5.3 to the Bank’s Form 6-K filed with the SEC on September 14, 2021.
In the opinion of Ashurst LLP, when the Notes have been duly completed in accordance with the Indenture and issued and sold as contemplated by the prospectus supplement and the prospectus, the
Notes will be valid, binding and enforceable obligations of the Bank, entitled to the benefits of the Indenture, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and subject to general principles of equity, public policy considerations and the discretion of the court before which any suit or proceeding may be brought. This opinion is given as of
the date hereof and is limited to the laws of the State of New York. This opinion is subject to customary assumptions about the Trustee’s authorization, execution and delivery of the Indenture and the genuineness of signatures and to such
counsel’s reliance on the Bank and other sources as to certain factual matters, all as stated in the legal opinion dated September 14, 2021, which has been filed as Exhibit 5.4 to the Bank’s Form 6-K dated September 14, 2021.
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P-18
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RBC Capital Markets, LLC
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