Filed Pursuant to Rule 433
Registration Statement No. 333-259205
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Preliminary Terms Supplement
Subject to Completion:
Dated December 2, 2021
Pricing Supplement Dated December __, 2021 to the Product Prospectus Supplement No. CCBN-2, Dated September 14, 2021, the Prospectus Supplement
Dated September 14, 2021, and the Prospectus Dated September 14, 2021
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$____________
Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index, due
December 19, 2022
Royal Bank of Canada
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Reference Index
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Initial Level
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Coupon Barrier and Trigger Level*
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S&P 500® Index (“SPX”)
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4,513.04
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2,933.48, which is 65% of its Initial Level
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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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December 2, 2021
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Principal Amount:
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$1,000 per Note
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Issue Date:
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December 7, 2021
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Maturity Date:
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December 19, 2022
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Observation Dates:
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March 16, 2022, June 15, 2022, September 14, 2022 and the Valuation Date.
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Coupon Payment
Dates:
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March 21, 2022, June 21, 2022, September 19, 2022 and the Maturity Date.
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Valuation Date:
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December 14, 2022
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Contingent Coupon:
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$11.50 per $1,000 in principal amount, if payable.
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Initial Level:
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4,513.04, which was the closing level of the Reference Index on December 1, 2021.
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Final Level:
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The closing level of the Reference Index on the Valuation Date.
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Contingent Coupon
and Memory Feature:
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If the Notes have not been previously called, and if the closing level of the Reference Index is greater than or equal to the Coupon Barrier on the
applicable Observation Date, we will pay the Contingent Coupon on the applicable Coupon Payment Date. You may not receive any Contingent Coupons during the term of the Notes.
If a 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 then payable, together with
the payment otherwise due on that later date.
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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 Level:
For each $1,000 in principal amount, $1,000 plus the Contingent Coupon (together with any previously unpaid Contingent Coupons) at maturity, unless the Final Level is less than the Trigger Level.
If the Final Level is less than the Trigger Level, then the investor will receive at maturity, for each $1,000 in principal amount, a cash payment equal to:
$1,000 + ($1,000 x Underlying Return)
Investors could lose some or all of the principal amount if the Final Level is less than the Trigger Level.
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Call Feature:
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The Notes will be automatically called on any Coupon Payment Date (other than the final Coupon Payment Date) if the closing level of the Reference Index on the immediately preceding Observation
Date is greater than or equal to the Initial Level, as described below.
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CUSIP/ISIN:
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78016F7D0 / US78016F7D01
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Per Note
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Total
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Price to public(1)
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100.00%
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$
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Underwriting discounts and commissions(1)
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1.00%
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$
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Proceeds to Royal Bank of Canada
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99.00%
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$
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RBC Capital Markets, LLC
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JPMorgan
Chase Bank, N.A.
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J.P. Morgan
Securities LLC
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Placement Agents
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |
General:
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This terms supplement relates to an offering of Auto-Callable Contingent Coupon Barrier Notes (the “Notes”) linked to the S&P 500® Index (the “Reference Index”).
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Issuer:
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Royal Bank of Canada (“Royal Bank”)
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Trade Date:
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December 2, 2021
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Issue Date:
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December 7, 2021
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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
and Memory Feature:
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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 level of the
Reference Index is greater than or equal to the Coupon Barrier on the applicable Observation Date, we will pay the Contingent Coupon applicable to that Coupon Payment Date, together with any previously unpaid Contingent Coupons.
• If the closing level of the
Reference Index 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 will not receive any Contingent Coupons on the Maturity Date if the Final
Level is less than the Coupon Barrier.
You may not receive a Contingent Coupon on one or more Coupon Payment Dates during the term of the Notes.
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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$11.50 per $1,000 in principal amount, if payable.
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Observation Dates:
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March 16, 2022, June 15, 2022, September 14, 2022 and the Valuation Date.
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Coupon Payment
Dates:
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The Contingent Coupon, if payable, will be paid on March 21, 2022, June 21, 2022, September 19, 2022 and 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 Coupons 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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Automatic Call
Feature:
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The Notes will be automatically called on any Coupon Payment Date (other than the final Coupon Payment Date) if the closing level of the Reference Index on the immdiately preceding Observation Date is greater than or
equal to the Initial Level.
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Payment if Called:
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If the Notes are automatically called, then, on the applicable Coupon Payment Date, for each $1,000 principal amount, you will receive $1,000 plus the Contingent Coupon otherwise due on that Coupon Payment Date
(together with any previously unpaid Contingent Coupons).
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Valuation Date:
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December 14, 2022
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Maturity Date:
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December 19, 2022
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Initial Level:
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The closing level of the Reference Index on December 1, 2021, as set forth on the cover page of this document.
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Final Level:
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The closing level of the Reference Index on the Valuation Date.
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Coupon Barrier
and Trigger Level:
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65% of the Initial Level, as set forth on the cover page of this document.
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |
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 Level:
• If the Final Level is greater
than or equal to the Trigger Level, we will pay you a cash payment equal to the principal amount plus the Contingent Coupon otherwise due on the Maturity Date, together with any previously unpaid Contingent Coupons.
• If the Final Level is less than the
Trigger Level, you will receive at maturity, for each $1,000 in principal amount, a cash payment equal to:
$1,000 + ($1,000 x Underlying Return)
The amount of cash that you receive will be less than your principal amount, if anything, resulting in a loss that is proportionate to the decline from the Initial Level to the Final Level. Investors in the Notes could lose some or all of their investment if the Final Level is less than the Trigger Level.
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Underlying Return:
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Final Level – Initial Level
Initial Level
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Market Disruption
Events:
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The occurrence of a market disruption event (or a non-trading day) as to the Reference Index will result in the postponement of an Observation Date or the Valuation Date, as described in the
product prospectus supplement.
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Calculation Agent:
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RBC Capital Markets, LLC (“RBCCM”)
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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
cash-settled contingent income-bearing derivative contract linked to the Reference Index 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 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 September 14, 2021).
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Terms Incorporated in
the Master Note:
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All of the terms appearing above the item captioned “Secondary Market” on pages P-2 and P-3 of this terms supplement and the terms appearing under the caption “General Terms of the Notes” in the
product prospectus supplement dated September 14, 2021, as modified by this terms supplement.
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |
Hypothetical Initial Level:
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100.00*
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Hypothetical Trigger Level:
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65, which is 65% of the hypothetical Initial Level
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Hypothetical Coupon Barrier:
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65, which is 65% of the hypothetical Initial Level
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Contingent Coupon:
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$11.50 for each Coupon Payment Date upon which it is payable.
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Principal Amount:
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$1,000 per Note
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Hypothetical Final Level
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Payment at Maturity as
Percentage of Principal Amount
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Cash Payment Amount
per $1,000 in Principal
Amount
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130.00
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100.00%
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$1,000.00*
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120.00
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100.00%
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$1,000.00*
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110.00
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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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90.00
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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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70.00
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100.00%
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$1,000.00*
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65.00
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100.00%
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$1,000.00*
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64.99
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64.99%
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$649.90
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60.00
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60.00%
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$600.00
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50.00
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50.00%
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$500.00
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40.00
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40.00%
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$400.00
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25.00
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25.00%
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$250.00
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0.00
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0.00%
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$0.00
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |
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You May Receive Less than the Principal Amount at Maturity — Investors in the Notes could lose all or a substantial portion of their principal amount if there is a decline in
the level of the Reference Index between the date that the Initial Level was determined and the Valuation Date. If the Notes are not automatically called and the Final Level is less than the Trigger Level, the amount of cash that you receive at
maturity will represent a loss of your principal that is proportionate to the decline in the closing level of the Reference Index from the Initial Level to the Final Level. 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 March 2022, the closing level of the Reference Index is greater than or equal to its
Initial Level, then the Notes will be automatically called. If the Notes are automatically called, then, on the applicable Coupon Payment Date, for each $1,000 in principal amount, you will receive $1,000 plus the Contingent Coupon otherwise
due on the applicable Coupon Payment Date (together with any previously unpaid Contingent Coupons). You will not receive any Contingent Coupons after that payment. 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 level of the Reference Index on an Observation Date
is less than the Coupon Barrier, we will not pay you the applicable Contingent Coupon. If the closing level of the Reference Index is less than the Coupon Barrier on each of the Observation Dates, and if the Final Level is less than the Coupon
Barrier, 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 Level will be less than its Trigger Level.
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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,
regardless of the appreciation of the Reference Index. 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 automatically called, you will not receive any Contingent Coupons or any other payment in respect of any Observation Dates after the applicable Coupon Payment Date. Since the Notes could be called as early as the first
Observation Date, the total return on the Notes could be minimal. If the Notes are not called, you may be subject to the full downside performance of the Reference Index even though your potential return is limited to the Contingent Coupons
that may paid on the Notes. As a result, the return on an investment in the Notes could be less than the return on a direct investment in securities included in the Reference Index.
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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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Owning the Notes Is Not the Same as Owning the Securities Represented by the Reference Index — The return on your Notes is unlikely to reflect the return you would realize if
you actually owned the securities represented by the Reference Index. For instance, you will not receive or be entitled to receive any dividend payments or other distributions on those securities 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 securities represented by the Reference Index may have. Furthermore, the Reference Index may appreciate substantially during the term of the Notes, while your
potential return will be limited to the applicable Contingent Coupon payments.
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |
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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 level of the Reference Index increases after the date that its Initial Level was determined. 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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The Tax Treatment of the Notes Is Uncertain — Significant aspects of the tax treatment of an investment in the Notes are uncertain. You should consult your tax adviser about
your tax situation.
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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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Many Economic and Market Factors Will Impact the Value of the Notes — In addition to the level of the Index on any day, the value of the Notes will be affected by a number of
economic and market factors that may either offset or magnify each other, including:
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the expected volatility of the Reference Index;
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the time to maturity of the Notes;
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the dividend rate on the securities included in the Reference Index;
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interest and yield rates in the market generally;
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a variety of economic, financial, political, regulatory or judicial events; and
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our creditworthiness, including actual or anticipated downgrades in our credit ratings.
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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 relating
to 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 level of the Reference Index, 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 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 and 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,
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |
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Our Business Activities May Create Conflicts of Interest — We, RBCCM and our other respective affiliates trade the securities represented by the Reference Index, and other
financial instruments related to the Reference Index, on a regular basis, for their accounts and for other accounts under our or their management. We, RBCCM and our other affiliates may also issue or underwrite or assist unaffiliated entities
in the issuance or underwriting of other securities or financial instruments that relate to the Reference Index. To the extent that we or any of our affiliates serves as issuer, agent or underwriter for such securities or financial instruments,
our or their interests with respect to such products may be adverse to those of the holders of the Notes. Any of these trading activities could potentially affect the performance of the Reference Index and, accordingly, could affect the value
of the Notes, and the amounts, if any, payable on the Notes.
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We May Issue Research That Is Inconsistent with an Investment in the Notes — We or our affiliates may issue research reports on securities that are, or may become, components
of the Reference Index. We may also publish research from time to time on financial markets and other matters that may influence the level of the Reference Index or the value of the Notes, or express opinions or provide recommendations that may
be inconsistent with purchasing or holding the Notes or with the investment view implicit in the Notes or the Reference Index. You should make your own independent investigation of the merits of investing in the Notes and the Reference Index.
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The Payments on the Notes Are Subject 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.
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |
|
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |
|
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |
|
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |
|
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |
|
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Auto-Callable Contingent Coupon Barrier Notes with
Memory Coupon Linked to the S&P 500® Index
Royal Bank of Canada |