New Issue: RBC sells $1.56 million contingent income autocallables on Michael Kors

By Marisa Wong

Madison, Wis., Oct. 29 - Royal Bank of Canada priced $1.56 million of contingent income autocallable securities due Oct. 28, 2016 linked to Michael Kors Holdings Ltd. shares, according to an FWP filing with the Securities and Exchange Commission.

The notes will pay a contingent quarterly coupon of 2.25% if Michael Kors stock closes at or above the downside threshold level, 70% of the initial share price, on a determination date for that quarter.

The notes will be redeemed at par of $10 plus the contingent coupon if the stock closes at or above the applicable redemption threshold level on any of the first 11 quarterly determination dates. The redemption threshold level is 95% of the initial share price for the first four determination dates, 90% of the initial price for the next four determination dates and 85% of the initial price for the last three dates.

If the notes are not called and the final share price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the contingent coupon.

Otherwise, the payout will be a number of Michael Kors shares equal to $10 divided by the initial share price or, at the issuer's option, a cash amount equal to the value of those shares.

RBC Capital Markets, LLC is the agent with Morgan Stanley Wealth Management handling distribution.

Issuer:	Royal Bank of Canada
Issue:	Contingent income autocallable securities
Underlying stock:	Michael Kors Holdings Ltd. (Symbol: KORS)
Amount:	$1,559,500
Maturity:	Oct. 28, 2016
Contingent payment:	9%, payable quarterly if Michael Kors stock closes at or above downside threshold level on determination date for that quarter
Price:	Par of $10.00
Payout at maturity:	If final share price is greater than or equal to downside threshold level, par plus contingent payment; otherwise, 0.1312 Michael Kors shares or, at issuer's option, cash amount equal to value of those shares
Call:	Automatically at par plus contingent payment if closing share price is greater than or equal to redemption threshold on any of first 11 quarterly determination dates
Initial share price:	$76.24
Downside threshold:	$53.37, 70% of initial share price
Redemption thresholds:	$72.43, 95% of initial share price, for first four determination dates; $68.62, 90% of initial price, for next four determination dates; $64.80, 85% of initial price, for last three dates
Pricing date:	Oct. 25
Settlement date:	Oct. 30
Agent:	RBC Capital Markets, LLC
Distribution:	Morgan Stanley Smith Barney LLC
Fees:	2.25%
Cusip:	78009Q711

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