New Issue: RBC prices $4.06 million redeemable leveraged steepener notes linked to CMS rates

By Toni Weeks

San Luis Obispo, Calif., June 25 – Royal Bank of Canada priced $4.06 million of redeemable leveraged steepener notes due June 29, 2035 linked to the 30-year Constant Maturity Swap rate and the two-year CMS rate, according to a 424B2 filing with the Securities and Exchange Commission.

The interest rate will be 7.5% in years one and two. After that, the interest rate will be four times the reference rate – the 30-year CMS rate over the two-year CMS rate minus 25 basis points – subject to a minimum of zero and a maximum of 7.5% per year. Interest will be payable semiannually.

The payout at maturity will be par.

The notes will be callable on June 29, 2016, June 29, 2020, June 29, 2025 and June 29, 2030.

RBC Capital Markets LLC is the agent.

Issuer:	Royal Bank of Canada
Issue:	Redeemable leveraged steepener notes
Underlying rates:	30-year and two-year Constant Maturity Swap rates
Amount:	$4,063,000
Maturity:	June 29, 2035
Coupon:	7.5% for first two years; after that, four times the spread of 30-year CMS rate over two-year CMS rate minus 25 bps, capped at 7.5% with floor of zero; payable semiannually
Price:	Variable prices
Payout at maturity:	Par
Call option:	At par on June 29, 2016, June 29, 2020, June 29, 2025 and June 29, 2030
Pricing date:	June 24
Settlement date:	June 29
Agent:	RBC Capital Markets, LLC
Fees:	2.25% to 3.5%
Cusip:	780102KDH7

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