Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-275898
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Pricing Supplement
Dated May 30, 2024
To the Product Prospectus Supplement ERN-ES-1, the Prospectus Supplement and the Prospectus, Each Dated December
20, 2023
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$335,000
Digital Return Notes Linked to the Common Stock of
Vertiv Holdings Company, Due June 4, 2027 Royal Bank of Canada
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Reference Stock
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Initial Stock Price
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Vertiv Holdings Company (“VRT”)
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$102.28
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If the Final Stock Price of the Reference Stock is greater than or equal to the Initial Stock Price, the Notes will pay at maturity a return equal to the Digital Return. The Digital Return will be 37.00% of
the principal amount. An investor's return on the Notes will not exceed the Digital Return.
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If the Final Stock Price of the Reference Stock is less than the Initial Stock Price, investors will receive the principal amount at maturity, and no additional payment.
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Any 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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Per Note
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Total
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Price to public(1)
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100.00%
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$335,000
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Underwriting discounts and commissions(1)
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0.00%
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$0
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Proceeds to Royal Bank of Canada
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100.00%
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$335,000
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Digital Return Notes Linked to the Vertiv
Holdings Company
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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 Stock:
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The common stock of Vertiv Holdings Company (“VRT”)
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Minimum Investment:
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$1,000 and minimum denominations of $1,000 in excess thereof
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Trade Date (Pricing
Date):
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May 30, 2024
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Issue Date:
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June 4, 2024
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Valuation Date:
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June 1, 2027
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Maturity Date:
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June 4, 2027, subject to extension for market and other disruptions, as described in the product prospectus supplement dated December 20, 2023.
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Payment at Maturity (if
held to maturity):
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If the Final Stock Price is greater than or equal to the Initial Stock Price (that is, the Percentage Change is positive or
zero) then the investor will receive an amount per $1,000 principal amount per Note equal to:
Principal Amount + (Principal Amount × Digital Return)
The return on the Notes will not exceed the Digital Return.
If the Final Stock Price is less than the Initial Stock Price (that is, the Percentage Change is negative), then the investor
will receive a cash amount equal to the principal amount only.
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Percentage Change:
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The Percentage Change, expressed as a percentage, is calculated using the following formula:
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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 document.
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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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Digital Return:
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37.00%. An investor's return on the Notes will not exceed the Digital Return.
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Calculation Agent:
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RBCCM
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U.S. Tax Treatment:
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We intend to take the position that the Notes will be treated as debt instruments subject to the special tax rules governing contingent payment debt instruments for U.S. federal income tax
purposes. Please see the section below, “Supplemental Discussion of U.S. Federal Income Tax Consequences” which applies 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 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:
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DTC global (including through its indirect participants Euroclear and Clearstream, Luxembourg as described under “Ownership and Book-Entry Issuance” in the prospectus dated December 20,
2023).
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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, as modified by this pricing supplement.
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Digital Return Notes Linked to the Vertiv
Holdings Company
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Digital Return Notes Linked to the Vertiv
Holdings Company
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Example 1 —
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Calculation of the Payment at Maturity where the Percentage Change is positive, and exceeds the percentage represented by the Digital Return.
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Percentage Change:
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40%
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Payment at Maturity:
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$1,000 + ($1,000 × 37.00%) = $1,000 + $370.00 = $1,370.00
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On a $1,000 investment, a Percentage Change of 40% results in a Payment at Maturity of $1,370.00, a return of 37.00% on the Notes.
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In this case, the return on the Notes is less than the Percentage Change.
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Example 2 —
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Calculation of the Payment at Maturity where the Percentage Change is positive, but is less than the percentage represented by the Digital Return.
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Percentage Change:
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10%
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Payment at Maturity:
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$1,000 + ($1,000 x 37.00%) = $1,370.00
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On a $1,000 investment, a Percentage Change of 10% results in a Payment at Maturity of $1,370, a return of 37.00% on the Notes.
In this case, the return on the Notes is greater than the Percentage Change.
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Example 3 —
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Calculation of the Payment at Maturity where the Percentage Change is negative.
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Percentage Change:
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-10%
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Payment at Maturity:
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At maturity, even though the Percentage Change is negative, you will receive the principal amount of your Notes.
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On a $1,000 investment, a Percentage Change of -10% results in a Payment at Maturity of $1,000, a return of 0% on the Notes.
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Digital Return Notes Linked to the Vertiv
Holdings Company
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Hypothetical Percentage
Change
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Payment at Maturity as
Percentage of Principal Amount
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Payment at Maturity per $1,000
in Principal Amount
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50.00%
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137.00%
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$1,370.00
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40.00%
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137.00%
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$1,370.00
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37.00%
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137.00%
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$1,370.00
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30.00%
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137.00%
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$1,370.00
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20.00%
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137.00%
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$1,370.00
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10.00%
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137.00%
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$1,370.00
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5.00%
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137.00%
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$1,370.00
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2.00%
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137.00%
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$1,370.00
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0.00%
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137.00%
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$1,370.00
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-10.00%
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100.00%
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$1,000.00
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-20.00%
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100.00%
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$1,000.00
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-30.00%
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100.00%
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$1,000.00
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-40.00%
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100.00%
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$1,000.00
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-50.00%
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100.00%
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$1,000.00
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-60.00%
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100.00%
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$1,000.00
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-70.00%
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100.00%
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$1,000.00
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-80.00%
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100.00%
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$1,000.00
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-90.00%
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100.00%
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$1,000.00
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-100.00%
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100.00%
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$1,000.00
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Digital Return Notes Linked to the Vertiv
Holdings Company
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You May Not Earn a Positive Return on Your Investment – The payment you will receive at maturity will depend on whether
the price of the Reference Stock increases from the Initial Stock Price to the Final Stock Price. If the price of the Reference Stock decreases from the Initial Stock Price to the Final Stock Price, you will not receive any positive
return on the Notes and you will only receive the principal amount.
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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 as little as 0%, may be less than the return you could earn on other investments. 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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Your Potential Payment at Maturity Is Limited — The Notes will provide less opportunity to participate in the
appreciation of the Reference Stock than an investment in a security linked to the Reference Stock providing full participation in the appreciation, because the payment at maturity will not exceed the return represented by the Digital
Return. 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 Reference Stock.
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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, 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 price of the Reference Stock increases after the Trade Date. No assurance can be given as to what our financial condition will be at maturity of the Notes.
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You Will Be Required to Include Income on the Notes Over Their Term Based Upon a Comparable Yield, Even Though You Will Not Receive Any Payments Until Maturity
– We intend to take the position that the Notes will be treated as debt instruments subject to the special tax rules governing contingent payment debt instruments for U.S. federal income tax
purposes. Under such treatment, the Notes are considered to be issued with original issue discount. You will be required to include income on the Notes over their term based upon a comparable yield, even though you will not receive any
payments until maturity. You are urged to review the section entitled “Supplemental Discussion of U.S. Federal Income Tax Consequences” and consult your own tax advisor.
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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—Market Disruption Events” in the product prospectus supplement.
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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
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Digital Return Notes Linked to the Vertiv
Holdings Company
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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 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 referral fee 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 referral fee or 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 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.
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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 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
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 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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Digital Return Notes Linked to the Vertiv
Holdings Company
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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 example, 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;
accordingly, an investment in the Notes may return less than an actual investment in the Reference Stock. 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, and you will not fully participate in such appreciation.
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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 Stock Issuer. However, we and our affiliates may currently, or from time to time in the future engage, in business with the Reference Stock Issuer. 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 Reference Stock.
The Reference Stock Issuer is not involved in this offering and has no obligation of any sort with respect to your Notes. The Reference Stock Issuer 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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Digital Return Notes Linked to the Vertiv
Holdings Company
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Digital Return Notes Linked to the Vertiv
Holdings Company
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Digital Return Notes Linked to the Vertiv
Holdings Company
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Digital Return Notes Linked to the Vertiv
Holdings Company
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Digital Return Notes Linked to the Vertiv
Holdings Company
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Digital Return Notes Linked to the Vertiv
Holdings Company
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Digital Return Notes Linked to the Vertiv
Holdings Company
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Digital Return Notes Linked to the Vertiv
Holdings Company
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Digital Return Notes Linked to the Vertiv
Holdings Company
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P-17
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RBC Capital Markets, LLC
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