Published on 12/31/2008 in the Prospect News Structured Products Daily.
New Issue: RBC prices $783,000 17.5% RevCons linked to GM
By Angela McDaniels
Tacoma, Wash., Dec. 31 - Royal Bank of Canada priced $783,000 of reverse convertible notes (RevCons) due June 30, 2008 linked to the common stock of General Motors Corp., according to a 424B2 filing with the Securities and Exchange Commission.
The six-month notes will pay 8.75% for an annualized rate of 17.5%. Interest is payable monthly.
The payout at maturity will be par unless GM stock falls by more than 40% during the life of the notes and finishes below the initial share price, in which case the payout will be a number of GM shares equal to $1,000 divided by the initial share price or, at the bank's option, the equivalent cash value.
RBC Capital Markets Corp. is the underwriter.
| Issuer: | Royal Bank of Canada
|
| Issue: | Reverse convertible notes (RevCons)
|
| Underlying stock: | General Motors Corp. (Symbol: GM)
|
| Amount: | $783,000
|
| Maturity: | June 30, 2008
|
| Coupon: | 17.5%, payable monthly
|
| Price: | Par
|
| Payout at maturity: | If GM shares close below the barrier price during the life of the notes and the final share price is less than the initial share price, 38.37299 GM shares or equivalent cash value; otherwise, par
|
| Initial share price: | $26.06
|
| Barrier price: | $15.64, 60% of initial share price
|
| Pricing date: | Dec. 27
|
| Settlement date: | Dec. 31
|
| Underwriter: | RBC Capital Markets Corp.
|
| Fees: | 1.75%
|
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