New Issue: RBC prices $3.06 million direct investment notes tied to basket of 40 stocks

By Marisa Wong

Morgantown, W.Va., Jan. 3 – Royal Bank of Canada priced $3.06 million of direct investment notes due Jan. 5, 2018 linked to a basket of 40 common equity securities, according to a 424B2 filing with the Securities and Exchange Commission.

The equally weighted basket is composed of the stocks of AmerisourceBergen Corp., Alliance Data Systems Corp., Aetna Inc., Alaska Air Group, Inc., Ameriprise Financial, Inc., AutoNation, Inc., Anthem Inc., Bed Bath & Beyond Inc., BB&T Corp., Best Buy Co., Inc., Cardinal Health, Inc., Capital One Financial Corp., Discover Financial Services, Express Scripts Holding Co., Freeport-McMoRan Inc., Gap, Inc., Huntington Bancshares Inc., Nordstrom, Inc., CarMax, Inc., Kohl’s Corp., Legg Mason, Inc., Lincoln National Corp., Southwest Airlines Co., Macy’s, Inc., McKesson Corp., Navient Corp., Norfolk Southern Corp., PNC Financial Services Group, Inc., Ryder System, Inc., Regions Financial Corp., Staples, Inc., Southwestern Energy Co., Tegna Inc., Tesoro Corp., Unum Group, Urban Outfitters, Inc., United Rentals, Inc., U.S. Bancorp, Wells Fargo & Co., Zions Bancorp.

Interest is payable quarterly. The amount of each 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.

The percentage amount will equal (a) 100% plus (b) the sum of the weighted returns for the basket stocks. The payout will be less than par if the percentage amount is less than 102.3%.

RBC Capital Markets, LLC is the underwriter.

Issuer:	Royal Bank of Canada
Issue:	Direct investment notes
Underlying stocks:	AmerisourceBergen Corp. (Symbol: ABC), Alliance Data Systems Corp. (Symbol: ADS), Aetna Inc. (Symbol: AET), Alaska Air Group, Inc. (Symbol: ALK), Ameriprise Financial, Inc. (Symbol: AMP), AutoNation, Inc. (Symbol: AN), Anthem Inc. (Symbol: ANTM), Bed Bath & Beyond Inc. (Symbol: BBBY), BB&T Corp. (Symbol: BBT), Best Buy Co., Inc. (Symbol: BBY), Cardinal Health, Inc. (Symbol: CAH), Capital One Financial Corp. (Symbol: COF), Discover Financial Services (Symbo: DFS), Express Scripts Holding Co. (Symbol: ESRX), Freeport-McMoRan Inc. (Symbol: FCX), Gap, Inc. (Symbol: GPS), Huntington Bancshares Inc. (Symbol: HBAN), Nordstrom, Inc. (Symbol: JWN), CarMax, Inc. (Symbol: KMX), Kohl’s Corp. (Symbol: KSS), Legg Mason, Inc. (Symbol: LM), Lincoln National Corp. (Symbol: LNC), Southwest Airlines Co. (Symbol: LUV), Macy’s, Inc. (Symbol: M), McKesson Corp. (Symbol: MCK), Navient Corp. (Symbol: NAVI), Norfolk Southern Corp. (Symbol: NSC), PNC Financial Services Group, Inc. (Symbol: PNC), Ryder System, Inc. (Symbol: R), Regions Financial Corp. (Symbol: RF), Staples, Inc. (Symbol: SPLS), Southwestern Energy Co. (Symbol: SWN), Tegna Inc. (Symbol: TGNA), Tesoro Corp. (Symbol: TSO), Unum Group (Symbol: UNM), Urban Outfitters, Inc. (Symbol: URBN), United Rentals (Symbol: URI), U.S. Bancorp (Symbol: USB), Wells Fargo & Co. (Symbol: WFC), Zions Bancorp (Symbol: ZION); equally weighted
Amount:	$3,058,000
Maturity:	Jan. 5, 2018
Coupon:	97.75% of the sum of the dividend amounts for each of the basket stocks; payable quarterly
Price:	Par of $1,000
Payout at maturity:	$977.50 times the percentage amount equal to (a) 100% plus (b) the sum of the weighted returns for the basket stocks; payout will be less than par if the percentage amount is less than 102.3%
Pricing date:	Dec. 23
Settlement date:	Dec. 29
Agent:	RBC Capital Markets, LLC
Fees:	1.5%
Cusip:	78012KWP8

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