By Angela McDaniels
Tacoma, Wash., May 29 - Royal Bank of Canada priced $13.6 million of contingent income autocallable securities due May 30, 2014 linked to the common stock of Delta Air Lines, Inc., according to a 424B2 filing with the Securities and Exchange Commission.
If Delta stock closes at or above the downside threshold level, 60% of the initial share price, on a quarterly determination date, the notes will pay a contingent payment of 3.0625% for that quarter. The amount is equivalent to 12.25% per year.
If the closing share price is greater than or equal to the initial share price on any of the first three quarterly determination dates, the notes will be automatically redeemed at par of $10 plus the contingent payment.
If the notes are not called and the final share price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the contingent payment. Otherwise, the payout will be a number of Delta shares equal to $10 divided by the initial share price or, at the issuer's option, a cash amount equal to the value of those shares.
RBC Capital Markets, LLC is the agent. Distribution is through Morgan Stanley Smith Barney LLC.
| Issuer: | Royal Bank of Canada
|
| Issue: | Contingent income autocallable securities
|
| Underlying stock: | Delta Air Lines, Inc. (Symbol: DAL)
|
| Amount: | $13,602,330
|
| Maturity: | May 30, 2014
|
| Contingent payment: | 3.0625% payable quarterly (equivalent to 12.25% per year) if Delta stock closes at or above downside threshold level on determination date for that quarter
|
| Price: | Par of $10.00
|
| Payout at maturity: | If final share price is greater than or equal to downside threshold level, par plus contingent payment; otherwise, 0.5283 Delta shares or, at issuer's option, cash amount equal to value of those shares
|
| Call: | Automatically at par plus contingent payment if closing share price is greater than or equal to initial share price on any of first three quarterly determination dates
|
| Initial share price: | $18.93
|
| Downside threshold: | $11.36, 60% of initial share price
|
| Pricing date: | May 24
|
| Settlement date: | May 30
|
| Agent: | RBC Capital Markets, LLC
|
| Distribution: | Morgan Stanley Smith Barney LLC
|
| Fees: | 2.25%
|
| Cusip: | 78008Y632
|
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