Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-275898
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The information in this preliminary terms supplement is not complete and may be changed.
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Preliminary Terms Supplement
Subject to Completion:
Dated April 26, 2024
Pricing Supplement Dated May __, 2024 to the Product Prospectus Supplement No. CCBN-1, the Prospectus Supplement and the Prospectus, Each Dated
September 14, 2021
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$
Auto-Callable Contingent Coupon Buffered Notes
Linked to the Common Stock of NVIDIA
Corporation, Due June 20, 2025
Royal Bank of Canada
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Issuer:
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Royal Bank of Canada
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Stock Exchange Listing:
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None
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Trade Date:
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May 14, 2024
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Principal Amount:
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$1,000 per Note
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Issue Date:
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May 17, 2024
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Maturity Date:
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June 20, 2025
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Observation Dates:
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Monthly, as set forth below.
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Coupon Payment Dates:
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Monthly, as set forth below.
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Valuation Date:
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June 16, 2025
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Contingent Coupon Rate:
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13.00% per annum
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Initial Stock Price:
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The closing price of the Reference Stock on the Trade Date.
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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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Coupon Barrier and
Buffer Price:
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75% of the Initial Stock Price.
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Contingent Coupon:
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If the closing price of the Reference Stock is greater than or equal to the Coupon Barrier on the applicable Observation Date, we will pay the
Contingent Coupon applicable to that Observation Date. You may not receive any Contingent Coupons during the term of the Notes.
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Payment at Maturity
(if held to maturity):
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If the Notes are not previously called, we will pay you at maturity an amount based on the Final Stock Price:
For each $1,000 in principal amount, $1,000, plus the Contingent Coupon payable at maturity, unless the Final Stock Price is less than the
Buffer Price.
If the Final Stock Price is less than the Buffer Price, then the investor will receive at maturity, for each $1,000 in principal amount, the
number of shares of the Reference Stock equal to the Physical Delivery Amount, or under the circumstances described below, the cash value of those shares.
Investors in the Notes will lose some of their principal amount if the Final Stock Price is less than the
Buffer Price.
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Physical Delivery
Amount:
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For each $1,000 in principal amount, a number of shares of the Reference Stock equal to the Cash Delivery Amount (as defined below) divided by
the Final Stock Price, subject to adjustment as described in the product prospectus supplement. As of the Valuation Date, these shares will be worth less than the principal amount, in proportion to the decrease in the price of the
Reference Stock below the Buffer Price.
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Call Feature:
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If the closing price of the Reference Stock is greater than or equal to the Initial Stock Price, beginning on November
14, 2024, and on any Observation Date thereafter, the Notes will be automatically called for 100% of their principal amount, plus the Contingent Coupon applicable to the corresponding Observation Date.
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CUSIP:
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78015QJP7
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Per Note
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Total
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Price to public(1)
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100.00
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$
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Underwriting discounts and commissions(1)
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1.50%
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$
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Proceeds to Royal Bank of Canada
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98.50%
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$
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|
Auto-Callable Contingent Coupon Buffered Notes
Royal Bank of Canada
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General:
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This terms supplement relates to an offering of Auto-Callable Contingent Coupon Buffered Notes (the “Notes”) linked to the common stock (the “Reference Stock”) of NVIDIA
Corporation (the “Reference Stock Issuer”).
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Issuer:
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Royal Bank of Canada (the “Bank”)
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Trade Date:
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May 14, 2024
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Issue Date:
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May 17, 2024
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Valuation Date:
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June 16, 2025
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Maturity Date:
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June 20, 2025, subject to extension for market and other disruptions, as described in the product prospectus supplement dated December 20, 2023.
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Denominations:
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Minimum denomination of $1,000, and integral multiples of $1,000 thereafter.
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Contingent Coupon:
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We will pay you a Contingent Coupon during the term of the Notes, periodically in arrears on each Coupon Payment Date, under the conditions described below:
• If the closing price of the Reference Stock is greater than or equal to the Coupon Barrier on the applicable Observation Date, we will pay the Contingent Coupon applicable to that
Observation Date.
• If the closing price of the Reference Stock is less than the Coupon Barrier on the applicable Observation Date, we will not pay you the Contingent Coupon applicable to that Observation Date.
You may not receive a Contingent Coupon for one or more monthly periods during the term of the Notes.
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Contingent Coupon Rate:
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13.00% per annum (approximately 1.0833% per month)
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Observation Dates and
Coupon Payment Dates:
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Monthly, as set forth in the table below:
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Observation Dates
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Coupon Payment Dates
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June 14, 2024
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June 20, 2024
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July 15, 2024
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July 18, 2024
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August 14, 2024
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August 19, 2024
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September 16, 2024
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September 19, 2024
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October 14, 2024
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October 17, 2024
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November 14, 2024
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November 19, 2024
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December 16, 2024
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December 19, 2024
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January 14, 2025
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January 17, 2025
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February 14, 2025
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February 20, 2025
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March 14, 2025
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March 19, 2025
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April 14, 2025
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April 17, 2025
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May 14, 2025
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May 19, 2025
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June 16, 2025 (the Valuation Date)
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June 20, 2025 (the Maturity Date)
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Record Dates:
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The record date for each Coupon Payment Date will be one business day prior to that scheduled Coupon Payment Date; provided, however, that any Contingent Coupon payable at maturity or
upon a call will be payable to the person to whom the payment at maturity or upon the call, as the case may be, will be payable.
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|
Auto-Callable Contingent Coupon Buffered Notes
Royal Bank of Canada
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Call Feature:
|
If, on any monthly Observation Date, beginning on November 14, 2024, the closing price of the Reference Stock is greater than or equal to the Initial Stock Price, then the Notes will be automatically
called.
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Call Settlement Dates:
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If the Notes are called on any Observation Date, the Call Settlement Date will be the Coupon Payment Date corresponding to that Observation Date.
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Payment if Called:
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If the Notes are automatically called, then, on the applicable Call Settlement Date, for each $1,000 in principal amount, you will receive $1,000 plus the Contingent Coupon otherwise due on that Call
Settlement Date.
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Initial Stock Price:
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The closing price of the Reference Stock on the Trade Date.
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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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Coupon Barrier and
Buffer Price:
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75% of the Initial Stock Price.
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Payment at Maturity (if
not previously called and
held to maturity):
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If the Notes are not previously called, we will pay you at maturity an amount based on the Final Stock Price:
• If the Final Stock Price is greater than or equal to the Buffer Price, we will pay you a cash payment equal to the principal amount plus the Contingent Coupon otherwise
due on the Maturity Date.
• If the Final Stock Price is less than the Buffer Price, you will receive at maturity, for each $1,000 in principal amount, the number of shares of the Reference Stock equal to the Physical Delivery Amount, or under the
circumstances described below, the Cash Delivery Amount. If we deliver shares of the Reference Stock, fractional shares will be paid in cash.
In this case, the value of the shares or cash that you will receive, if any, will be less than your principal amount, resulting in a loss that is approximately equal to
the decline of the Reference Stock beyond the Buffer Price from the Trade Date to the Valuation Date.
Investors in the Notes will lose some or a significant portion of their principal amount if the Final Stock Price is less than the
Buffer Price.
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Physical Delivery
Amount:
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For each $1,000 in principal amount, a number of shares of the Reference Stock equal to the Cash Delivery Amount divided by the Final Stock Price, subject to
adjustment as described in the product prospectus supplement, and in the discretion of the Calculation Agent. Fractional shares will be paid in cash, in an amount determined by the Calculation Agent.
If, due to an event beyond our control, we determine it is impossible, impracticable (including unduly burdensome) or illegal for us to deliver shares of the Reference
Stock to you at maturity, or if the Final Stock Price is $0, we will pay the Cash Delivery Amount in lieu of delivering shares.
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Cash Delivery Amount:
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$1,000 + [($1,000 x (Percentage Change + Buffer Percentage)]
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Percentage Change:
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Final Stock Price – Initial Stock Price
Initial Stock Price
The Percentage Change will be expressed as a percentage.
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Buffer Percentage:
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25%
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Calculation Agent:
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RBC Capital Markets, LLC (“RBCCM”)
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|
Auto-Callable Contingent Coupon Buffered Notes
Royal Bank of Canada
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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 Notes as a callable
pre-paid contingent income-bearing derivative contract linked to the Reference Stock 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 December 20, 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 less than the principal amount.
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Listing:
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The Notes will not be listed on any securities exchange.
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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 terms supplement.
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|
Auto-Callable Contingent Coupon Buffered Notes
Royal Bank of Canada
|
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Auto-Callable Contingent Coupon Buffered Notes
Royal Bank of Canada
|
Hypothetical Initial Stock Price:
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$100.00*
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Hypothetical Coupon Barrier and Buffer Price:
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$75, which is 75% of the hypothetical Initial
Stock Price
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Contingent Coupon Rate:
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13.00% per annum (or approximately
1.0833% per month)
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Contingent Coupon Amount:
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Approximately $10.833 per month.
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Observation Dates:
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Monthly
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Principal Amount:
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$1,000 per Note
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Hypothetical Final
Stock Price
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Percentage
Change of the
Reference
Stock
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Cash Delivery
Amount
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Payment at Maturity (assuming that
the Notes were not previously
called)
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Physical Delivery Amount
as Number of Shares of the
Reference Stock
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$150.00
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50.00%
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n/a
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$1,010.833*
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n/a
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$140.00
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40.00%
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n/a
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$1,010.833*
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n/a
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$130.00
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30.00%
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n/a
|
$1,010.833*
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n/a
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$120.00
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20.00%
|
n/a
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$1,010.833*
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n/a
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$110.00
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10.00%
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n/a
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$1,010.833*
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n/a
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$100.00
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0.00%
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n/a
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$1,010.833*
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n/a
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$90.00
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-10.00%
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n/a
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$1,010.833*
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n/a
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$80.00
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-20.00%
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n/a
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$1,010.833*
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n/a
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$75.00
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-25.00%
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n/a
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$1,010.833*
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n/a
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$70.00
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-30.00%
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$950.00
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Physical or Cash Delivery Amount
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13.57**
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$60.00
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-40.00%
|
$850.00
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Physical or Cash Delivery Amount
|
14.17**
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$50.00
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-50.00%
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$750.00
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Physical or Cash Delivery Amount
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15.00
|
$40.00
|
-60.00%
|
$650.00
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Physical or Cash Delivery Amount
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16.25**
|
$30.00
|
-70.00%
|
$550.00
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Physical or Cash Delivery Amount
|
18.33**
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$20.00
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-80.00%
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$450.00
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Physical or Cash Delivery Amount
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22.50**
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$10.00
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-90.00%
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$350.00
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Physical or Cash Delivery Amount
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35.00
|
$0.00
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-100.00%
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$250.00
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Cash Delivery Amount
|
n/a
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|
Auto-Callable Contingent Coupon Buffered Notes
Royal Bank of Canada
|
|
|
Auto-Callable Contingent Coupon Buffered Notes
Royal Bank of Canada
|
• |
You May Lose Some or a Portion of the Principal Amount at Maturity — Investors in the Notes could lose some or a substantial portion of their principal amount if there
is a decline in the trading price of the Reference Stock between the Trade Date and the Valuation Date. If the Notes are not automatically called and the Final Stock Price is less than the Buffer Price, the value of the shares of the
Reference Stock or cash that you receive at maturity will represent a loss of your principal that is proportionate to the decline in the closing price of the Reference Stock beyond the Buffer Price from the Trade Date to the Valuation
Date. If you receive shares of the Reference Stock, their value could decrease between the Valuation Date and the Maturity Date. Any Contingent Coupons received on the Notes prior to the Maturity Date may not be sufficient to compensate
for any such loss.
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• |
The Notes Are Subject to an Automatic Call — If on any Observation Date beginning in November 2024, the closing price of the Reference Stock is greater than or equal
to the Initial Stock Price, then the Notes will be automatically called. If the Notes are automatically called, then, on the applicable Call Settlement Date, for each $1,000 in principal amount of the Notes, you will receive $1,000 plus
the Contingent Coupon otherwise due on the applicable Call Settlement Date. You will not receive any Contingent Coupons after the Call Settlement Date. You may be unable to reinvest your proceeds from the automatic call in an investment
with a return that is as high as the return on the Notes would have been if they had not been called.
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• |
You May Not Receive Any Contingent Coupons — We will not necessarily make any coupon payments on the Notes. If the closing price of the Reference Stock on an
Observation Date is less than the Coupon Barrier, we will not pay you 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 and on the Valuation Date, we will not pay you any Contingent Coupons during the term of, and you will not receive a positive return on, your Notes. Generally, this non-payment of the Contingent Coupon coincides with a period of
greater risk of principal loss on your Notes. Accordingly, if we do not pay the Contingent Coupon on the Maturity Date, you will also incur a loss of principal, because the Final Stock Price will be less than the Buffer Price.
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• |
The Call Feature and the Contingent Coupon Feature Limit Your Potential Return — The return potential of the Notes is limited to the pre-specified Contingent Coupon
Rate, regardless of the appreciation of the Reference Stock. In addition, the total return on the Notes will vary based on the number of Observation Dates on which the Contingent Coupon becomes payable prior to maturity or an automatic
call. Further, if the Notes are called due to the Call Feature, you will not receive any Contingent Coupons or any other payment in respect of any Observation Dates after the applicable Call Settlement Date. Since the Notes could be
called as early as November 2024, the total return on the Notes could be limited. If the Notes are not called, you may be subject to the full downside performance of the Reference Stock even though your potential return is limited to
the Contingent Coupon Rate. As a result, the return on an investment in the Notes could be less than the return on a direct investment in the Reference Stock.
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• |
Your Return on the Notes 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 purchased one of our conventional senior interest bearing
debt securities.
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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 any Contingent Coupons, if payable, and the amount due on any relevant payment date is dependent upon our ability to repay our obligations on the applicable payment dates. 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 any time during the term of the Notes.
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|
Auto-Callable Contingent Coupon Buffered Notes
Royal Bank of Canada
|
• |
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 that transaction costs in any secondary market would be high. As a
result, the difference between bid and ask prices for your Notes in any secondary market could be substantial.
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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 on the cover page of the final
pricing supplement for the Notes will 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, 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 underwriting discount, 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 We Will Provide in the Final Pricing Supplement Will Be an Estimate Only, Calculated as of the Time the Terms of the Notes Are
Set — The initial estimated value of the Notes will be 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 will be 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 and Those of 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 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
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Auto-Callable Contingent Coupon Buffered Notes
Royal Bank of Canada
|
• |
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 instance, 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. 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, while your potential return will be limited to the applicable Contingent
Coupon payments.
|
• |
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.
|
• |
The Payments on the Notes Are Subject to Postponement Due to Market Disruption Events and Adjustments — The payment at maturity, each Observation
Date 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.
|
|
|
Auto-Callable Contingent Coupon Buffered Notes
Royal Bank of Canada
|
|
|
Auto-Callable Contingent Coupon Buffered Notes
Royal Bank of Canada
|
|
|
Auto-Callable Contingent Coupon Buffered Notes
Royal Bank of Canada
|
|
|
Auto-Callable Contingent Coupon Buffered Notes
Royal Bank of Canada
|
|
|
Auto-Callable Contingent Coupon Buffered Notes
Royal Bank of Canada
|
P-15
|
RBC Capital Markets, LLC
|