Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-259205
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Pricing Supplement
Dated January 23, 2023
To the Product Prospectus Supplement No. ERN-ES-1, the Prospectus Supplement and the Prospectus, Each Dated September 14, 2021
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$346,000
Digital Plus Barrier Notes
Linked to the Common Stock of The Boeing
Company, Due July 26, 2024
Royal Bank of Canada
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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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$346,000
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Underwriting discounts and commissions(1)
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2.00%
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$6,920
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Proceeds to Royal Bank of Canada
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98.00%
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$339,080
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Digital Plus Barrier Notes
Royal Bank of Canada
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Issuer:
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Royal Bank of Canada (“Royal Bank”)
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Underwriter:
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RBC Capital Markets, LLC
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Minimum Investment:
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$1,000 and minimum denominations of $1,000 in excess thereof
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Trade Date (Pricing
Date): |
January 23, 2023
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Issue Date:
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January 26, 2023
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Valuation Date:
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July 23, 2024
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Maturity Date:
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July 26, 2024, subject to extension for market and other disruptions, as described in the product prospectus supplement.
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Interest Payments:
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None. No payments will be made prior to the maturity date.
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Payment at Maturity (if
held to maturity):
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If the Final Price is greater than or equal to the Barrier Price but less than or equal to 130% of the Initial Price, then the investor will receive the greater of:
• the Digital Payment; and
• $1,000 + ($1,000 x
Percentage Change)
If the Final Price is greater than 130% of the Initial Price, then the investor will receive the Maximum Redemption Amount.
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However, if the Final Price is less than the Barrier Price (the Percentage Change is less than -25%), then the investor will receive at maturity, for each $1,000 in
principal amount, a number of shares of the Reference Asset equal to the Physical Delivery Amount (or at our election, the cash value of those shares).
In this case, you will lose a significant portion, or possibly even all, of the principal amount.
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Digital Payment:
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115% of the principal amount ($1,150 for each $1,000 in principal amount of the Notes).
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Percentage Change:
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The Percentage Change, expressed as a percentage, is calculated using the following formula:
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Physical Delivery
Amount:
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For each $1,000 in principal amount, 4.76 shares of the Reference Asset, which is equal to $1,000 divided by the Initial Stock Price, rounded to two decimal places, subject to adjustment
as described in the product prospectus supplement. Fractional shares will be paid in cash.
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 Asset to you at maturity, we will pay
the Cash Delivery Amount in lieu of delivering shares.
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Digital Plus Barrier Notes
Royal Bank of Canada
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Cash Delivery
Amount:
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The product of the Physical Delivery Amount multiplied by the Final Price.
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Initial Price:
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$209.97, which was the closing price of the Reference Asset on the Trade Date. The Initial Price will be subject to adjustment in the event of certain corporate events
affecting the Reference Asset, as set forth in the product prospectus supplement.
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Final Price:
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The closing price of the Reference Asset on the Valuation Date.
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Maximum Redemption
Amount:
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130% of the principal amount ($1,300 for each $1,000 in principal amount of the Notes)
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Barrier Price:
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$157.48, which is 75% of the Initial Price (rounded to two decimal places).
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Principal at Risk:
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The Notes are NOT principal protected. You may lose all or a substantial portion of your principal amount at maturity if the Final Price is less than the Barrier Price.
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Calculation Agent:
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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 pre-paid derivative
contract 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 September 14, 2021 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 of your Notes.
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Listing:
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The Notes will not be listed on any securities exchange.
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Clearance and
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).
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Terms Incorporated in
the Master Note:
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All of the terms appearing on the cover page above the item captioned “Secondary Market” on the cover page and pages P-2 and P-3 of this pricing supplement and the terms appearing under
the caption “General Terms of the Notes” in the product prospectus supplement, as modified by this pricing supplement.
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Digital Plus Barrier Notes
Royal Bank of Canada
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Digital Plus Barrier Notes
Royal Bank of Canada
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Hypothetical Initial Price:
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$100.00*
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Hypothetical Physical Delivery Amount:
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10 shares ($1,000 divided by $100)
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Hypothetical Barrier Price:
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$75.00 which is 75.00% of the hypothetical Initial Price
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Digital Payment:
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115% of the principal amount
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Maximum Redemption Amount:
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130% of the principal amount
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Principal Amount:
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$1,000 per Note
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Final Price
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Percentage
Change
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Payment at Maturity
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Physical Delivery
Amount as Number
of Shares of the
Reference Asset
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Cash Delivery
Amount
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$150.00
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50.00%
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$1,300.00
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n/a
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n/a
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$140.00
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40.00%
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$1,300.00
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n/a
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n/a
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$130.00
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30.00%
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$1,300.00
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n/a
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n/a
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$120.00
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20.00%
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$1,200.00
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n/a
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n/a
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$115.00
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15.00%
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$1,150.00
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n/a
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n/a
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$110.00
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10.00%
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$1,150.00
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n/a
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n/a
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$105.00
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5.00%
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$1,150.00
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n/a
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n/a
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$100.00
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0.00%
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$1,150.00
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n/a
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n/a
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$90.00
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-10.00%
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$1,150.00
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n/a
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n/a
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$80.00
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-20.00%
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$1,150.00
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n/a
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n/a
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$75.00
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-25.00%
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$1,150.00
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n/a
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n/a
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$74.99
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-25.01%
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Physical or Cash Delivery Amount
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10
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$749.90
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$70.00
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-30.00%
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Physical or Cash Delivery Amount
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10
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$700.00
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$60.00
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-40.00%
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Physical or Cash Delivery Amount
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10
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$600.00
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$50.00
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-50.00%
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Physical or Cash Delivery Amount
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10
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$500.00
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$40.00
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-60.00%
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Physical or Cash Delivery Amount
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10
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$400.00
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$30.00
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-70.00%
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Physical or Cash Delivery Amount
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10
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$300.00
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$20.00
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-80.00%
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Physical or Cash Delivery Amount
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10
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$200.00
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$10.00
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-90.00%
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Physical or Cash Delivery Amount
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10
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$100.00
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$0.00
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-100.00%
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Physical or Cash Delivery Amount
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10
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$0.00
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Digital Plus Barrier Notes
Royal Bank of Canada
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Digital Plus Barrier Notes
Royal Bank of Canada
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• |
You May Lose Some or All of the Principal Amount of the Notes at Maturity –– Investors in the Notes could lose all or a substantial portion of their principal amount if
there is a decline in the trading price of the Reference Asset between the Trade Date and the Valuation Date. If the Final Price is less than the Barrier Price, the value of the shares 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 Asset from the Trade Date to the Valuation Date. If you receive shares of the Reference Asset, they may decrease in value between the
Valuation Date and the maturity date, further reducing your return on the Notes.
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The Notes Do Not Pay Interest and Your Return May Be Lower than the Return on a Conventional Debt Security of Comparable Maturity –– There will be no periodic interest
payments on the Notes as there would be on a conventional fixed-rate or floating-rate debt security having the same 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. 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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Your Potential Payment at Maturity Is Limited –– The Notes will provide less opportunity to participate in the appreciation of the Reference Asset than an investment
in a security linked to the Reference Asset providing full participation in the appreciation, because the payment at maturity will not exceed the Maximum Redemption Amount. Accordingly, your return on the Notes may be less than your
return would be if you made an investment in the Reference Asset or in a security directly linked to the positive performance of the Reference Asset.
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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 amounts due on the Notes is dependent upon our ability to repay our obligations at that time. This will be the case even if the price of the Reference Asset increases
after the Trade Date. No assurance can be given as to what our financial condition will be at maturity of the Notes.
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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 or any of 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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The Initial Estimated Value of the Notes Is Less than the Price to the Public – The initial estimated value that is set forth on the cover page of this pricing
supplement 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 Asset, 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
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Digital Plus Barrier Notes
Royal Bank of Canada
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The Initial Estimated Value that Is Set Forth on the Cover Page of this Pricing Supplement Is an Estimate Only, Calculated as of the Time the Terms of the Notes Were Set
–The initial estimated value of the Notes is 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 is 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 Asset 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 Asset, 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 Asset (the ‘‘Reference Asset
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 and our affiliates may have published, and in the future expect to publish, research reports with respect to the Reference Asset. 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 Asset and,
therefore, the market value of the Notes.
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Owning the Notes Is Not the Same as Owning the Reference Asset –– The return on your Notes is unlikely to reflect the return you would realize if you actually owned
the Reference Asset. For example, you will not receive or be entitled to receive any dividend payments or other distributions on the Reference Asset during the term of your Notes; accordingly, an investment in the Notes may return less
than an actual investment in the Reference Asset. As an owner of the Notes, you will not have voting rights or any other rights that holders of the Reference Asset may have. Furthermore, the Reference Asset may appreciate substantially
during the term of the Notes, and you will not fully participate in such appreciation.
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Digital Plus Barrier Notes
Royal Bank of Canada
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There Is No Affiliation Between the Reference Asset Issuer and RBCCM, and RBCCM Is Not Responsible for any Disclosure by the Reference Asset Issuer — We are not
affiliated with the Reference Asset Issuer. However, we and our affiliates may currently, or from time to time in the future engage, in business with the Reference Asset 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 Asset. The Reference Asset Issuer is not
involved in this offering and has no obligation of any sort with respect to your Notes. The Reference Asset 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.
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The Payments on the Notes Are Subject to Postponement Due to Market Disruption Events and Adjustments –– The payments on the Notes 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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Digital Plus Barrier Notes
Royal Bank of Canada
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Digital Plus Barrier Notes
Royal Bank of Canada
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Digital Plus Barrier Notes
Royal Bank of Canada
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Digital Plus Barrier Notes
Royal Bank of Canada
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Digital Plus Barrier Notes
Royal Bank of Canada
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