RBC plans direct investment notes tied to Top 30 Global Ideas for 2016

By Angela McDaniels

Tacoma, Wash., Jan. 29 – Royal Bank of Canada plans to price direct investment notes due March 8, 2017 linked to the Top 30 Global Ideas for 2016, according to a 424B2 filing with the Securities and Exchange Commission.

The equally weighted basket is composed of the stocks of Agrium Inc., Air Lease Corp., Allianz SE, Aramark, Alimentation Couche-Tard Inc., Avago Technologies Ltd., Brookfield Asset Management Inc., CBOE Holdings, Inc., Canadian National Railway Co., Cenovus Energy Inc., Dixons Carphone plc, Vinci SA, Dollar Tree, Inc., Enbridge Inc., Google Inc., Hexagon AB, Intact Financial Corp., InterXion Holding NV, Incitec Pivot Ltd., Lloyds Banking Group plc, Marathon Petroleum Corp., ServiceNow, Inc., Newell Rubbermaid Inc., PNC Financial Services Group. Inc., Royal Dutch Shell plc, Raytheon Co., Ryanair Holdings plc, Toronto-Dominion Bank, Whirlpool Corp. and Yum! Brands, Inc.

A Top 30 Global Idea was identified as of Dec. 18 as one of the most attractive investment ideas for 2016 and was rated outperform by RBC Capital Markets’ research analysts.

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) the product of the applicable net percentage and 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.

The net percentage is 100% for companies organized in Ireland, Singapore or the United Kingdom, 85% for companies organized in France, Germany, the Netherlands, Sweden or the United States, 75% for companies organized in Canada and, for companies organized in Australia, 100% of any portion of a dividend that is franked and 85% of any portion of a dividend that is not franked. The net percentage is designed to reflect the approximate percentage of a dividend that a hypothetical holder of the reference stock would receive after giving effect to applicable withholding taxes of the relevant jurisdictions.

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 an amount, expressed as a percentage, equal to (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.

The notes will price Feb. 24.

The Cusip number is 78012KLC9.

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