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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 2/24/20 Royal Bank of Canada FWP 1:172K Royal Bank of Canada Broadridge Fin’l So… Inc |
Document/Exhibit Description Pages Size 1: FWP Jpm Viac Buff Ds Mult Ac Wmem Coup 78015Kjc9 HTML 97K
Free Writing Prospectus
(To the Prospectus dated September 7, 2018, the Prospectus Supplement dated September 7,
2018, and the Product Prospectus Supplement dated September 10, 2018)
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Filed Pursuant to Rule 433
Registration No. 333-227001
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Royal Bank of Canada
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$
Buffered Phoenix Autocallable Notes with Memory Coupon Due March 10, 2021
Linked to the Class B Common Stock of ViacomCBS Inc.
Senior Global Medium -Term Notes, Series H
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• |
The Notes are designed for investors who wish to receive Contingent Coupons (as defined below) if (i) on any of the Observation Dates (other than the final Observation Date), the closing price of the Class B
common stock of ViacomCBS Inc. (the “Reference Stock”) or (ii) with respect to the final Observation Date, the Final Stock Price (as defined below) is at or above the Coupon Barrier (as defined below). Investors should be willing to
forgo fixed interest and dividend payments, in exchange for the opportunity to receive a Contingent Coupon for each Observation Date. Due to the memory feature described below, a Contingent Coupon that is not payable on a Coupon Payment
Date may be paid on a subsequent Coupon Payment Date or at maturity.
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• |
The Notes are subject to automatic call if the closing price of the Reference Stock on any Observation Date (other than the final Observation Date) is at or above the Initial Stock Price. If the Notes are
not automatically called and the Final Stock Price is below the Buffer Price (as defined below), investors will be exposed to the depreciation in the Reference Stock, and could lose all or a portion of the principal amount. Investors in
the Notes should be willing to accept this risk of loss. All payments on the Notes are subject to our credit risk.
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• |
The Notes are expected to price on or about February 24, 2020(b) (the “trade date”) and are expected to be issued on or about
February 27, 2020(b) (the “issue date”).
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Key Terms
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Terms used in this free writing prospectus, but not defined herein, will have the meanings ascribed to them in the product prospectus supplement.
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Issuer:
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Royal Bank of Canada
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Reference Stock:
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The Class B common stock of ViacomCBS Inc. (Bloomberg symbol: “VIAC”)
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Observation Dates:
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Coupon Payment
Dates:
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Three business days following each Observation Date, except that the final Coupon Payment Date will be the maturity date.
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Contingent Coupons
and Memory Feature:
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The Contingent Coupon will be paid on each Coupon Payment Date if (i) the closing price of the Reference Stock on the applicable Observation Date (other than the final
Observation Date) or (ii) with respect to the final Observation Date, the Final Stock Price, is at or above the Coupon Barrier. If the Contingent Coupon is not payable on any Coupon Payment Date, it will be paid on any later Coupon Payment
Date (or at maturity) on which the Contingent Coupon is payable, together with the payment otherwise due on that later date. For the avoidance of doubt, once a previously unpaid Contingent Coupon has been paid on a later Coupon Payment
Date, it will not be paid again on a subsequent date.
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Contingent Coupon:
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$31.00 per $1,000 in principal amount of the Notes, if payable.
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Coupon Barrier:
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$22.61, which is 80.00% of the Initial Stock Price (rounded to two decimal places).
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Call Feature:
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If the closing price of the Reference Stock on any Observation Date (other than the final Observation Date) is at or above the Initial Stock Price, the Notes will be
automatically called for a cash payment equal to the principal amount plus the applicable Contingent Coupon for the applicable Observation Date, together with any previously unpaid Contingent Coupons.
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Call Settlement
Dates:
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The Coupon Payment Date corresponding to the applicable Observation Date.
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Buffer Price:
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$22.61, which is 80.00% of the Initial Stock Price (rounded to two decimal places). The Buffer Price is subject to the adjustment provisions set forth in the product prospectus supplement.
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Buffer Percentage:
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20.00%
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Downside Multiplier:
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100 divided by 80.00, or 1.25.
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Payment at Maturity:
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If the Notes are not called and on the final Observation Date:
• the Final Stock Price is at or above the Buffer Price, then you will receive a cash amount equal to the principal amount plus the Contingent Coupon otherwise due on the maturity date and any previously unpaid
Contingent Coupons with respect to the prior Coupon Payment Dates; or
Principal amount x [(1 + ((Underlying Return + Buffer Percentage) x Downside Multiplier)].
In this case, you will incur a loss of 1.25% of the principal amount for each 1% that the Final Stock Price is less than the Buffer Price, and you will lose some or all
of your initial investment.
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Underlying Return:
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Final Stock Price – Initial Stock Price
Initial Stock Price
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Initial Stock Price:
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$28.26, which was the closing price of one share of the Reference Stock on February 21, 2020.
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Final Stock Price:
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The arithmetic average of the closing prices of one share of the Reference Stock on each of the Valuation Dates.
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Valuation Dates:
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Maturity Date:
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March 10, 2021(a)(b)
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CUSIP/ISIN:
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78015KJC9/US78015KJC99
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Estimated Value:
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The initial estimated value of the Notes as of the trade date is expected to be between $965.26 and $985.26 per $1,000 in principal amount, and will be less than the
price to public. The final pricing supplement relating to the Notes will set forth our estimate of the initial value of the Notes as of the trade date. 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.
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Price to Public1
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Underwriting Commission2
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Proceeds to Royal Bank of Canada
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|||
Per Note
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$1,000
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$10
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$990
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Total
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$
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$
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$
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Observation Dates Prior to the Final Observation Date
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Final Observation Date
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||||||
Reference
Stock Price
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Percentage
Change in the
Value of the
Reference Stock at
Observation Date
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Payment on
Coupon Payment
Date or Call
Settlement Date (as
applicable)(1)(2)
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Return on the
Notes
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Final Stock
Price (3)
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Underlying
Return at
Final
Observation
Date
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Payment at
Maturity(2)
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Return on the
Notes(4)
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$180.00
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80.00%
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$1,031.00
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3.10%
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$180.00
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80.00%
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$1,031.00
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3.10%
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$170.00
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70.00%
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$1,031.00
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3.10%
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$170.00
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70.00%
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$1,031.00
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3.10%
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$160.00
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60.00%
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$1,031.00
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3.10%
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$160.00
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60.00%
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$1,031.00
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3.10%
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$150.00
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50.00%
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$1,031.00
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3.10%
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$150.00
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50.00%
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$1,031.00
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3.10%
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$140.00
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40.00%
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$1,031.00
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3.10%
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$140.00
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40.00%
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$1,031.00
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3.10%
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$130.00
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30.00%
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$1,031.00
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3.10%
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$130.00
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30.00%
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$1,031.00
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3.10%
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$120.00
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20.00%
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$1,031.00
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3.10%
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$120.00
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20.00%
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$1,031.00
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3.10%
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$110.00
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10.00%
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$1,031.00
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3.10%
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$110.00
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10.00%
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$1,031.00
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3.10%
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$105.00
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5.00%
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$1,031.00
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3.10%
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$105.00
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5.00%
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$1,031.00
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3.10%
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$100.00
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0.00%
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$1,031.00
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3.10%
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$100.00
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0.00%
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$1,031.00
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3.10%
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$95.00
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-5.00%
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$31.00
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3.10%
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$95.00
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-5.00%
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$1,031.00
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3.10%
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$90.00
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-10.00%
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$31.00
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3.10%
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$90.00
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-10.00%
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$1,031.00
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3.10%
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$85.00
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-15.00%
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$31.00
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3.10%
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$85.00
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-15.00%
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$1,031.00
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3.10%
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$80.00
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-20.00%
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$31.00
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3.10%
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$80.00
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-20.00%
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$1,031.00
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3.10%
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$75.00
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-25.00%
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$0.00
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0.00%
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$75.00
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-25.00%
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$993.75
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-6.25%
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$70.00
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-30.00%
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$0.00
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0.00%
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$70.00
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-30.00%
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$875.00
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-12.50%
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$60.00
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-40.00%
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$0.00
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0.00%
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$60.00
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-40.00%
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$750.00
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-25.00%
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$50.00
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-50.00%
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$0.00
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0.00%
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$50.00
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-50.00%
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$625.00
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-37.50%
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$40.00
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-60.00%
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$0.00
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0.00%
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$40.00
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-60.00%
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$500.00
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-50.00%
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$30.00
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-70.00%
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$0.00
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0.00%
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$30.00
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-70.00%
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$375.00
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-62.50%
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$20.00
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-80.00%
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$0.00
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0.00%
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$20.00
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-80.00%
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$250.00
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-75.00%
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$10.00
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-90.00%
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$0.00
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0.00%
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$10.00
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-90.00%
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$125.00
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-87.50%
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$0.00
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-100.00%
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$0.00
|
0.00%
|
$0.00
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-100.00%
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$0.00
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-100.00%
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• |
Potential Early Redemption as a Result of Automatic Call Feature — While the original term of the Notes is approximately one year, the Notes will be called before
maturity if the closing price of the Reference Stock is at or above the Initial Stock Price on the applicable Observation Date (other than the final Observation Date). In such a case, you will receive the principal amount plus the
applicable Contingent Coupon corresponding to that Observation Date, plus any previously unpaid Contingent Coupons with respect to prior Observation Dates.
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• |
Contingent Protection Against Loss — If the Notes are not automatically called and the Final Stock Price is at or above the Buffer Price, you will be entitled to
receive the full principal amount of your Notes at maturity (plus the applicable Contingent Coupon and any previously unpaid Contingent Coupons with respect to prior Observation Dates). If the Notes are not automatically called and the
Final Stock Price is less than the Buffer Price, you will lose 1.25% of the principal amount of your Notes for every 1% that the Final Stock Price is less than the Buffer Price. Under these circumstances, you may lose up to your entire
principal amount.
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Principal at Risk — Investors in the Notes could lose all or a substantial portion of their principal amount if there is a decline in the Reference Stock below the
Buffer Price and the Notes are not automatically called. You will lose 1.25% of the principal amount of your Notes for each 1% that the Final Stock Price is less than the Buffer Price.
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• |
Contingent Repayment of Principal Applies Only at Maturity — You should be willing to hold your Notes to maturity. If you sell your Notes prior to maturity in the
secondary market, if any, you may have to sell your Notes at a loss relative to your initial investment even if the price of the Reference Stock is above the Buffer Price.
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• |
You May Not Receive Any Contingent Coupons — Investors in the Notes will not necessarily receive Contingent Coupons on the Notes. If (i) the closing price of the
Reference Stock on an Observation Date (other than the final Observation Date) or (ii) with respect to the final Observation Date, the Final Stock Price is less than the Coupon Barrier, investors will not receive the Contingent Coupon
applicable to that Observation Date. If the closing price of the Reference Stock is less than the Coupon Barrier on each of the Observation Dates (other than the final Observation Date) and the Final Stock Price is less than the Coupon
Barrier, investors will not receive any Contingent Coupons during the term of the Notes, and will not receive a positive return on the Notes. Contingent Coupon payments should not be viewed as periodic interest payments. Generally, this
non-payment of the Contingent Coupon coincides with a period of greater risk of principal loss on the Notes. Notwithstanding the memory feature described above, there can be no assurance that any unpaid Contingent Coupon will become
payable during the term of the notes.
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Your Return May Be Lower than the Return on a Conventional Debt Security of Comparable Maturity — The return that you will receive on the Notes, which could be
negative, may be less than the return you could earn on other investments. Even if your return is positive, your return may be less than the return you would earn if you bought one of our conventional senior interest bearing debt
securities.
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• |
Reinvestment Risk — If your Notes are automatically called, the term of the Notes may be as short as approximately three months. There is no guarantee that you would be
able to reinvest the proceeds from an investment in the Notes at a comparable return for a similar level of risk if the Notes are automatically called prior to the Maturity Date. In addition, for the avoidance of doubt, the fees and
commissions described in this document will not be rebated or subject to amortization if the Notes are called prior to maturity.
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Credit of Issuer — The Notes are our senior unsecured debt securities. As a result, all payments on the Notes are dependent upon our ability to repay our obligations at
that time. This will be the case even if the Reference Stock increases after the trade date. No assurance can be given as to what our financial condition will be on any payment date.
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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 other affiliate of ours may stop any market-making
activities at any time. Even if a secondary market for the Notes develops, it may not provide significant liquidity or trade at prices advantageous to you. We expect that transaction costs in any secondary market would be high. As a
result, the difference between bid and asked prices for your Notes in any secondary market could be substantial.
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• |
Owning the Notes Is Not the Same as Owning the Reference Stock — The return on your Notes may not reflect the return you would realize if you actually owned the
Reference Stock. For instance, as a holder of the Notes, you will not have voting rights, rights to receive cash dividends or other distributions, or any other rights that holders of the Reference Stock would have. Further, you will not
participate in any appreciation of the Reference Stock, which could be significant.
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There Is No Affiliation Between Us and the Issuer of the Reference Stock, and We Are Not Responsible for any Disclosure by that Company — We are not affiliated with the
issuer of the Reference Stock. However, we and our affiliates may currently, or from time to time in the future engage in business with the issuer of the Reference Stock. Nevertheless, neither we nor our affiliates assume any
responsibilities for the accuracy or the completeness of any information about the Reference Stock that the issuer of the Reference Stock prepares. You, as an investor in the Notes, should make your own investigation into the Reference
Stock and the issuer of the Reference Stock. The issuer of the Reference Stock is not involved in this offering and has no obligation of any sort with respect to your Notes. The issuer of the Reference Stock 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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Single Stock Risk — The price of the Reference Stock can rise or fall sharply due to factors specific to the Reference Stock and its issuer, such as stock price
volatility, earnings, financial conditions, corporate, industry and regulatory developments, management changes and decisions and other events, as well as general market factors, such as general stock market volatility and levels,
interest rates and economic and political conditions. We urge you to review financial and other information filed periodically with the SEC by the issuer of the Reference Stock.
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• |
The Initial Estimated Value of the Notes Will Be Less than the Price to the Public — The initial estimated value that will be set forth in the final pricing supplement
for the Notes does not represent a minimum price at which we, RBCCM or any of our affiliates would be willing to purchase the Notes in any secondary market (if any exists) at any time. If you attempt to sell the Notes prior to
maturity, their market value may be lower than the price you paid for them and the initial estimated value. This is due to, among other things, changes in the price of the Reference Stock, the borrowing rate we pay to issue securities
of this kind, and the inclusion in the price to the public of the underwriting discount and the 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. 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 We Will Provide in the Final Pricing Supplement Will Be an Estimate Only, Calculated as of the Trade Date — 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.
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• |
Market Disruption Events and Adjustments — Whether the Notes will be called prior to maturity, the payment upon an automatic call or at maturity, the Observation Dates,
the Valuation Dates and the Reference Stock are subject to adjustment as described in the product prospectus supplement and this free writing prospectus. For a description of what constitutes a market disruption event as well as the
consequences of that market disruption event and the unavailability of the price of the Reference Stock on an Observation Date or Valuation Date, see “Market Disruption Events on a Valuation Date” below, and “General Terms of the
Notes—Payment at Maturity” and “—Market Disruption Events” in the product prospectus supplement.
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• |
Antidilution Adjustments — For certain corporate events affecting the Reference Stock, the calculation agent may make adjustments to the terms of the Notes. However,
the calculation agent will not make such adjustments in response to all events that could affect the Reference Stock. If an event occurs that does not require the calculation agent to make such adjustments, the value of the Notes may be
materially and adversely affected. In addition, all determinations and calculations concerning any such adjustments will be made in the sole discretion of the calculation agent, which will be binding on you absent manifest error. You
should be aware that the calculation agent may make any such adjustment, determination or calculation in a manner that differs from that discussed in this document or the product prospectus supplement as necessary to achieve an
equitable result.
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• |
The Reference Stock Has Very Limited Historical Information – This Reference Stock commenced trading only on December 5, 2019. Because it has limited trading history,
and because it has only been a public company for a limited period of time, your investment in the Notes linked to this Reference Stock may involve a greater risk than investing in securities linked to one or more equity securities with
a more established record of performance. For example, the limited available performance history for its securities provides only a small amount of information about how this Reference Stock may perform under different market and
economic conditions.
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• |
The Business Activities of Royal Bank and Our Affiliates 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 issuer of the Reference Stock, 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 may affect the price of the Reference Stock and, therefore, the market value of the Notes.
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This ‘FWP’ Filing | Date | Other Filings | ||
---|---|---|---|---|
1/1/23 | ||||
3/10/21 | ||||
3/5/21 | ||||
3/4/21 | ||||
3/3/21 | ||||
3/2/21 | ||||
3/1/21 | ||||
12/3/20 | ||||
9/3/20 | ||||
6/4/20 | ||||
2/27/20 | ||||
Filed on: | 2/24/20 | |||
2/21/20 | 6-K, FWP | |||
12/5/19 | 424B2, FWP | |||
12/31/18 | 10-D, 11-K, 13F-HR, 424B2, ABS-15G, FWP | |||
9/10/18 | 424B5, 6-K, EFFECT, FWP, SC 13G/A | |||
9/7/18 | 424B3, 424B5, 6-K, EFFECT, FWP | |||
List all Filings |