RBC plans one-year Stars linked to Caterpillar via Merrill Lynch

By Susanna Moon

Chicago, Dec. 11 - Royal Bank of Canada plans to price 0% Strategic Accelerated Redemption Securities due January 2015 linked to Caterpillar Inc. shares, according to an FWP with the Securities and Exchange Commission.

BofA Merrill Lynch will be the agent.

If Caterpillar shares close at or above its initial level on any quarterly observation date, the notes will be called at par of $10 plus an annualized call premium of 12% to 16%. The exact call premium will be set at pricing.

If the notes are not called, the payout at maturity will be par unless the stock finishes below its initial level, in which case investors will be exposed to any losses.

The notes will price and settle in December.

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