Royal Bank of Canada
|
Free Writing Prospectus Relating to
MSELN-482-C, Registration Statement
No. 333- 259205; Dated September 23,
2021; Filed Pursuant to Rule 433
|
Summary Terms
|
|||
Issuer:
|
Royal Bank of Canada
|
||
Underlying stock:
|
Apple Inc. common stock (“AAPL”)
|
||
Stated principal
amount:
|
$10 per security
|
||
Issue price:
|
$10 per security
|
||
Pricing date:
|
October 1, 2021
|
||
Original issue date:
|
October 6, 2021 (3 business days after the pricing date)
|
||
Valuation date:
|
October 1, 2024
|
||
Maturity date:
|
October 4, 2024
|
||
Early redemption:
|
If, on any of the determination dates, beginning in April 2022, the determination closing price of the underlying stock is greater than or equal to the redemption threshold price, the
securities will be automatically redeemed for an early redemption payment on the third business day following the related determination date. No further payments will be made on the securities once they have been redeemed.
|
||
Early redemption
payment:
|
The early redemption payment will be an amount equal to (i) the stated principal amount plus (ii) the contingent quarterly coupon with respect to the related determination date.
|
||
Determination
closing price:
|
The closing price of the underlying stock on any determination date other than the final determination date times the adjustment factor on that determination date.
|
||
Contingent quarterly
coupon:
|
• If,
on any determination date, the determination closing price or the final share price, as applicable, is greater than or equal to the downside threshold price, we will pay a contingent quarterly coupon of $0.2125 (2.125% of the
stated principal amount, or 8.50% per annum) per security on the related contingent payment date.
• If,
on any determination date, the determination closing price or the final share price, as applicable, is less than the downside threshold price, no contingent quarterly coupon will be made with respect to that determination date.
|
||
Determination
dates:
|
January 3, 2022, April 1, 2022, July 1, 2022, October 3, 2022, January 3, 2023, April 3, 2023, July 3, 2023, October 2, 2023, January 2, 2024, April 1, 2024, July 1, 2024 and October
1, 2024, subject to postponement for non-trading days and certain market disruption events. We also refer to October 1, 2024 as the final determination date.
|
||
Contingent payment
dates:
|
With respect to each determination date other than the final determination date, the third business day after the related determination date. The payment of the contingent quarterly
coupon, if any, with respect to the final determination date will be made on the maturity date.
|
||
Payment at maturity
|
• If
the final share price is greater than or equal to the downside threshold price:
• If
the final share price is less than the downside threshold price:
|
(i) the stated principal amount plus (ii) the final contingent quarterly coupon
(i) the stated principal amount multiplied by (ii) the share performance factor
|
Share performance factor:
|
Final share price divided by the initial share price
|
Adjustment factor:
|
1.0, subject to adjustment in the event of certain corporate events affecting the underlying stock
|
Redemption threshold price
|
100% of the initial share price
|
Downside threshold price:
|
80% of the initial share price
|
Initial share price:
|
The closing price of the underlying stock on the pricing date
|
Final share price:
|
The closing price of the underlying stock on the final determination date times the adjustment
factor on that date
|
CUSIP / ISIN:
|
78014U533 / US78014U5332
|
Preliminary pricing supplement:
|
Hypothetical Payout at Maturity1
(if the securities have not previously been redeemed)
|
||
Change in Underlying Stock
|
Payment at Maturity (excluding any
coupon payable at maturity)
|
|
+30%
|
$10.00
|
|
+20%
|
$10.00
|
|
+10%
|
$10.00
|
|
0%
|
$10.00
|
|
-10%
|
$10.00
|
|
-20%
|
$10.00
|
|
-21%
|
$7.90
|
|
-30%
|
$7.00
|
|
-40%
|
$6.00
|
|
-50%
|
$5.00
|
|
-60%
|
$4.00
|
|
-70%
|
$3.00
|
|
-80%
|
$2.00
|
|
-90%
|
$1.00
|
|
-100%
|
$0
|
|
• |
The securities do not guarantee the return of any principal.
|
• |
The potential contingent repayment of principal represented by the downside threshold price applies only at maturity.
|
• |
The contingent quarterly coupon, if any, is based solely on the determination closing price or the final share price, as applicable.
|
• |
You will not receive any contingent quarterly coupon for any quarterly period where the determination closing price, or the final share price, as applicable, is less than the downside threshold price.
|
• |
Your return on the securities may be lower than the return on a conventional debt security of comparable maturity.
|
• |
Investors will not participate in any appreciation in the price of the underlying stock.
|
• |
The automatic early redemption feature may limit the term of your investment to approximately six months. If the securities are redeemed early, you may not be able to reinvest at comparable terms or
returns.
|
• |
The securities are subject to our credit risk, and any actual or anticipated changes to our credit ratings or credit spreads may adversely affect the market value of the securities.
|
• |
Investing in the securities is not equivalent to investing in the underlying stock.
|
• |
We will not hold any shares of the underlying stock for your benefit.
|
• |
The initial estimated value of the securities, which is expected to be between $9.15 and $9.65 per security, will be less than the price to the public.
|
• |
Our initial estimated value of the securities is an estimate only, calculated as of the time that the terms of the securities are set.
|
• |
The market price will be influenced by many unpredictable factors.
|
• |
If the price of the shares of the underlying stock changes, the market value of the securities may not change in the same manner.
|
• |
The securities will not be listed on any securities exchange and secondary trading may be limited.
|
• |
The securities are not designed to be short-term trading instruments.
|
• |
We have no affiliation with the underlying company.
|
• |
The historical performance of the underlying stock should not be taken as an indication of its future performance.
|
• |
The antidilution adjustments the calculation agent is required to make do not cover every corporate event that could affect the underlying stock.
|
• |
We or our affiliates may have adverse economic interests to the holders of the securities.
|
• |
Hedging and trading activity by our subsidiaries could potentially adversely affect the value of the securities.
|
• |
We may engage in business with or involving the underlying company without regard to your interests.
|
• |
You must rely on your own evaluation of the merits of an investment linked to the underlying stock.
|
• |
The calculation agent, which is a subsidiary of Royal Bank of Canada, will make determinations with respect to the securities.
|
• |
Significant aspects of the income tax treatment of an investment in the securities are uncertain.
|
• |
A 30% U.S. federal withholding tax will be withheld on contingent quarterly coupons paid to non-U.S. holders.
|