FWP 1 c525100fwp.htm 78008H5E6 c525100fwp.htm
     
                  RBC Capital Markets®
Filed Pursuant to Rule 433 
Registration Statement No. 333-163632 
     
The information in this terms supplement is not complete and may be changed.
 
 
    
Terms Supplement
 
Subject to Completion:
Dated May 25, 2010
 
Pricing Supplement Dated June ●, 2010 to the
Product Prospectus Supplement FIN-1 Dated January 11,
2010, Prospectus Dated January 11, 2010, and
Prospectus Supplement Dated January 11, 2010
      
$ __________
 
Redeemable Step Up Notes,
Due December 7, 2012
Royal Bank of Canada
 
 
      
 
    
 
Royal Bank of Canada is offering the Redeemable Step Up Notes (the “Notes”) described below.
 
The CUSIP number for the Notes is 78008H5E6.
 
The Notes will accrue interest at the following rates during the indicated year of their term:
 
 
·
Year 1:
1.00%
 
 
·
Year 2:
1.30%
 
 
·
Year 2.5:
2.50%
 
We may call the Notes in whole, but not in part, on each Interest Payment Date (as defined below), commencing on December 7, 2010, upon 30 days prior written notice. Any payments on the Notes are subject to our credit risk.
 
The Notes will not be listed on any U.S. securities exchange.
 
Investing in the Notes involves a number of risks. See “Risk Factors” beginning on page S-1 of the prospectus supplement dated January 11, 2010, and “Additional Risk Factors Specific to the Notes” beginning on page PS-5 of the product prospectus supplement FIN-1 dated January 11, 2010.
 
The Notes will not constitute deposits insured by the Canada Deposit Insurance Corporation, the U.S. Federal Deposit Insurance Corporation (the “FDIC”) or any other Canadian or U.S. government agency or instrumentality.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined that this terms supplement is truthful or complete. Any representation to the contrary is a criminal offense.
 
Per Note
  
Total
Price to public
    %
  
$
Underwriting discounts and commissions
    %
  
$
Proceeds to Royal Bank of Canada
    %
  
$
 
We may use this terms supplement in the initial sale of the Notes.  In addition, RBC Capital Markets Corporation or another of our affiliates may use this terms 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 terms supplement is being used in a market-making transaction.
 
We will deliver the Notes in book-entry only form through the facilities of The Depository Trust Company on or about June 7, 2010, against payment in immediately available funds.
 
RBC Capital Markets Corporation
 
 
   
 
 
  
 
 
   
Redeemable Step Up Notes,
Due December 7, 2012
 
 
 
 
  
 
 
SUMMARY
 
The information in this “Summary” section is qualified by the more detailed information set forth in this terms supplement, the product prospectus supplement FIN-1, the prospectus supplement, and the prospectus.
 
Issuer:
Royal Bank of Canada (“Royal Bank”)
   
Issue:
Senior Global Medium-Term Notes, Series D
   
Underwriter:
RBC Capital Markets Corporation
   
Currency:
U.S. Dollars
   
Minimum Investment:
$1,000 and minimum denominations of $1,000 in excess of $1,000
   
Pricing Date:
June ●, 2010
   
Issue Date:
June 7, 2010
   
Maturity Date:
December 7, 2012
   
CUSIP:
78008H5E6
   
Interest Rate:
Year 1:          1.00%
   
 
Year 2:          1.30%
   
 
Year 2.5:       2.50%
   
Interest Payment
Dates:
Semi-Annually, on June 7th and December 7th of each year, commencing on December 7, 2010. If the Interest Payment Date is not a New York or Toronto business day, interest shall be paid on the next New York or Toronto business day, without adjustment for period end dates and no interest shall be paid in respect of the delay.
   
Redemption:
Redeemable at our option.
   
Call Date(s):
The notes are callable, in whole, but not in part, on each Interest Payment Date, commencing on December 7, 2010, upon 30 days prior written notice.
   
Survivor’s Option:
Applicable. See “General Terms of the Notes—Survivor’s Option” beginning on page PS-17 of the product prospectus supplement FIN-1 dated January 11, 2010.
   
U.S. Tax Treatment:
 
Please see the discussion (including the opinion of our counsel Morrison & Foerster LLP) in the product prospectus supplement FIN-1 dated January 11, 2010 under “Supplemental Discussion of U.S. Federal Income Tax Consequences” and specifically the discussion under “Supplemental Discussion of U.S. Federal Income Tax Consequences—Supplemental U.S. Tax Considerations— Where the term of your notes exceeds one year—Fixed Rate Notes, Floating Rate Notes, Inverse Floating Rate Notes, Step Up Notes, Leveraged Notes, Range Accrual Notes, Dual Range Accrual Notes and Non-Inversion Range Accrual Notes,” and “Supplemental Discussion of U.S. Federal Income Tax Consequences—Supplemental U.S. Tax Considerations— Where the term of your notes exceeds one year —Sale, Redemption or Maturity of Notes that Are Not Treated as Contingent Payment Debt Instruments,” which apply to your Notes.
   
Listing:
The Notes will not be listed on any securities exchange.
   
Clearance and
Settlement:
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 January 11, 2010).
 
RBC Capital Markets Corporation
P-2
 
   
 
 
  
 
 
   
Redeemable Step Up Notes,
Due December 7, 2012
 
 
 
 
  
 
 
Terms Incorporated in
the Master Note:
All of the terms appearing above the item captioned “Listing” on page P-2 of this terms supplement and the terms appearing under the caption “General Terms of the Notes” in the product prospectus supplement FIN-1dated January 11, 2010, as modified by this terms supplement.
 

 

 
 
 
 
RBC Capital Markets Corporation
P-3
 
   
 
 
  
 
 
   
Redeemable Step Up Notes,
Due December 7, 2012
 
 
 
 
  
 
 
ADDITIONAL TERMS OF YOUR NOTES
 
You should read this terms supplement together with the prospectus dated January 11, 2010, as supplemented by the prospectus supplement dated January 11, 2010 and the product prospectus supplement FIN-1 dated January 11, 2010, relating to our Senior Global Medium-Term Notes, Series D, of which these Notes are a part. Capitalized terms used but not defined in this terms supplement will have the meanings given to them in the product prospectus supplement FIN-1. In the event of any conflict, this terms supplement will control.  The Notes vary from the terms described in the product prospectus supplement FIN-1 in several important ways.  You should read this terms supplement carefully.
 
This terms 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 January 11, 2010 and “Additional Risk Factors Specific to the Notes” in the product prospectus supplement FIN-1 dated January 11, 2010, 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 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 January 11, 2010:

Prospectus Supplement dated January 11, 2010:

Product Prospectus Supplement FIN-1 dated January 11, 2010:

 

 
Our Central Index Key, or CIK, on the SEC website is 1000275.  As used in this terms supplement, the “Company,” “we,” “us,” or “our” refers to Royal Bank of Canada.
 
Royal Bank of Canada has filed a registration statement (including a product prospectus supplement, a prospectus supplement, and a prospectus) with the SEC for the offering to which this terms supplement relates.  Before you invest, you should read those documents and the other documents relating to this offering that we have filed with the SEC for more complete information about us and this offering.  You may obtain these documents without cost by visiting EDGAR on the SEC Website at www.sec.gov.  Alternatively, Royal Bank of Canada, any agent or any dealer participating in this offering will arrange to send you the product prospectus supplement FIN-1, the prospectus supplement and the prospectus if you so request by calling toll-free at 1-866-609-6009.
 
RBC Capital Markets Corporation
P-4
 
   
 
 
  
 
 
   
Redeemable Step Up Notes,
Due December 7, 2012
 
 
 
 
  
 
 
RISK FACTORS
 
The Notes involve risks not associated with an investment in ordinary fixed rate notes. This section describes the most significant risks relating to the terms of the Notes. For additional information as to these risks, please see the product prospectus supplement FIN-1 dated January 11, 2010 and the prospectus supplement dated January 11, 2010. You should carefully consider whether the notes are suited to your particular circumstances before you decide to purchase them. Accordingly, prospective investors should consult their financial and legal advisors as to the risks entailed by an investment in the Notes and the suitability of the Notes in light of their particular circumstances.
 
Early Redemption Risk. We have the option to redeem the Notes on any semi-annual Call Date, commencing December 7, 2010. It is more likely that we will redeem the Notes prior to their stated maturity date to the extent that the interest payable on the Notes is greater than the interest that would be payable on our other instruments of a comparable maturity, terms and credit rating trading in the market. If the Notes are redeemed prior to their stated maturity date, you may have to re-invest the proceeds in a lower rate environment.
 
Investors Are Subject to Our Credit Risk, and Our Credit Ratings and Credit Spreads May Adversely Affect the Market Value of the Notes. Investors are dependent on Royal Bank’s ability to pay all amounts due on the Notes on the interest payment dates and at maturity, and, therefore, investors are subject to the credit risk of Royal Bank and to changes in the market’s view of Royal Bank’s creditworthiness. Any decrease in Royal Bank’s credit ratings or increase in the credit spreads charged by the market for taking Royal Bank’s credit risk is likely to adversely affect the market value of the Notes.
 

 
SUPPLEMENTAL PLAN OF DISTRIBUTION
 
We expect that delivery of the Notes will be made against payment for the Notes on or about June 7, 2010, which is the third (3rd) business day following the Pricing Date (this settlement cycle being referred to as “T+3”).  See “Plan of Distribution” in the prospectus supplement dated January 11, 2010.
 

 

 
RBC Capital Markets Corporation
P-5