ACCELERATED RETURN NOTES® (ARNs®)
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Accelerated Return Notes® Linked to the Energy Select Sector SPDR® Fund
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Issuer
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Royal Bank of Canada (“RBC”)
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Principal Amount
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$10.00 per unit
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Term
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Approximately 14 months
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Market Measure
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The Energy Select Sector SPDR® Fund (Bloomberg symbol: “XLE”)
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Payout Profile at
Maturity
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• 3-to-1 upside exposure to
increases in the Market Measure, subject to the Capped Value
• 1-to-1 downside exposure
to decreases in the Market Measure, with 100% of your investment at risk
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Capped Value
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[$13.25 to $13.65] per unit, a [32.50% to 36.50%] return over the principal amount, to be determined on the pricing date.
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Investment
Considerations
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This investment is designed for investors who anticipate that the Market Measure will increase moderately over the term of the notes, and are willing to accept a capped return, take full downside risk and
forgo interim interest payments.
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Preliminary
Offering
Documents
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Exchange Listing
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No
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Depending on the performance of the Market Measure as measured shortly before the maturity date, your investment may result in a loss; there is no guaranteed return of principal.
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Payments on the notes, including repayment of principal, are subject to the credit risk of RBC. If RBC becomes insolvent or is unable to pay its obligations, you may lose your entire investment.
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Your investment return is limited to the return represented by the Capped Value and may be less than a comparable investment directly in the Market Measure or the securities held by the Market Measure.
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The initial estimated value of the notes on the pricing date will be less than their public offering price.
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If you attempt to sell the notes prior to maturity, their market value may be lower than both the public offering price and the initial estimated value of the notes on the pricing date.
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You will have no rights of a holder of shares of the Market Measure or the securities held by the Market Measure, and you will not be entitled to receive securities or dividends or other distributions by the
issuers of those securities.
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The investment adviser of the Market Measure may adjust the Market Measure in a way that could adversely affect the value of the notes and the amount payable on the notes, and the adviser has no obligation to
consider your interests.
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There are liquidity and management risks associated with the Market Measure.
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The performance of the Market Measure may not correlate with the performance of the securities held by the Market Measure as well as the net asset value per share of the Market Measure, especially during
periods of market volatility when the liquidity and the market price of shares of the Market Measure and/or the securities held by the Market Measure may be adversely affected, sometimes materially.
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The payments on the notes will not be adjusted for all corporate events that could affect the Market Measure.
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The securities held by the Underlying Fund are concentrated in one sector.
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A limited number of securities held by the Underlying Fund may affect the value of the Market Measure, and the Market Measure is not necessarily representative of the energy sector.
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The stocks of companies in the energy sector are subject to swift price fluctuations.
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Hypothetical Percentage
Change from the Starting
Value to the Ending
Value
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Hypothetical
Redemption Amount
per Unit
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Hypothetical Total Rate of
Return on the Notes
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-100.00%
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$0.00
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-100.00%
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-50.00%
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$5.00
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-50.00%
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-20.00%
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$8.00
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-20.00%
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-10.00%
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$9.00
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-10.00%
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-6.00%
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$9.40
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-6.00%
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-3.00%
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$9.70
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-3.00%
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0.00%
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$10.00
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0.00%
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2.00%
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$10.60
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6.00%
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3.00%
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$10.90
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9.00%
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5.00%
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$11.50
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15.00%
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10.00%
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$13.00
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30.00%
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11.50%
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$13.45(1)
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34.50%
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20.00%
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$13.45
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34.50%
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30.00%
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$13.45
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34.50%
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40.00%
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$13.45
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34.50%
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50.00%
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$13.45
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34.50%
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60.00%
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$13.45
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34.50%
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(1)
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The Redemption Amount per unit cannot exceed the hypothetical Capped Value.
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