By Angela McDaniels
Tacoma, Wash., Nov. 4 – Royal Bank of Canada priced $470,000 of direct investment notes due Nov. 7, 2017 linked to the October 2016 RBC Capital Markets U.S. Equity Top Picks List, according to a 424B2 filing with the Securities and Exchange Commission.
The list includes Air Lease Corp., Amphenol Corp., Aramark, Broadcom Ltd., Brookdale Senior Living Inc., Brookfield Asset Management Inc., Discover Financial Services, Dollar Tree, Inc., Dow Chemical Co., Louisiana-Pacific Corp., Marathon Petroleum Corp., Microsemi Corp., Newell Brands Inc., PNC Financial Services Group. Inc., Regency Centers Corp., Seritage Growth Properties, ServiceNow, Inc., Voya Financial, Inc. and Whirlpool Corp.
A top pick represents an RBC analyst’s best idea in the sector, which is expected to provide significant absolute total return over 12 months with a favorable risk/reward ratio.
The notes may pay interest. The amount of each quarterly interest payment, if any, will depend on the amount of dividends paid on each basket stock during the preceding quarter and will equal, for each $1,000 principal amount, 97.75% of the sum of the dividend amounts for each of the basket stocks.
The dividend amount for each stock equals (a) $1,000 divided by the initial price of the applicable stock multiplied by (b) the applicable component weighting multiplied by (c) 100% of the gross cash distributions (including ordinary and extraordinary dividends) per share declared by the applicable stock issuer where the date that the applicable stock has commenced trading ex-dividend on its primary U.S. securities exchange as to each relevant distribution occurs during the relevant interest calculation period.
For each $1,000 principal amount of notes, the payout at maturity will be the product of $977.50 and the percentage amount. This payment will be less than par if the percentage amount is less than 102.3%.
The percentage amount will be equal to (a) the final basket level minus the initial basket level divided by (b) the initial basket level.
The basket initially consists of a number of shares of each reference stock equal to $52.63 divided by that stock’s initial share price. The initial basket level is $1,000, and the final basket level will be the value of the shares in the basket on the valuation date.
RBC Capital Markets, LLC is the underwriter.
| Issuer: | Royal Bank of Canada
|
| Issue: | Direct Investment Notes
|
| Underlier: | October 2016 RBC Capital Markets U.S. Equity Top Picks List
|
| Amount: | $470,000
|
| Maturity: | Nov. 7, 2017
|
| Coupon: | 97.75% of sum of dividend amounts for each basket stock; payable quarterly but could be zero
|
| Price: | Par
|
| Payout at maturity: | For each $1,000 principal amount of notes, product of $977.50 and percentage amount, which equals quotient of final basket level minus initial basket level divided by initial basket level
|
| Pricing date: | Oct. 26
|
| Settlement date: | Oct. 31
|
| Underwriter: | RBC Capital Markets, LLC
|
| Fees: | 1.5%
|
| Cusip: | 78012KTX5
|
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