RBC plans to price Stars due August 2015 linked to S&P 500 index

By Marisa Wong

Madison, Wis., June 26 – Royal Bank of Canada plans to price 0% Strategic Accelerated Redemption Securities due August 2015 linked to the S&P 500 index, according to an FWP with the Securities and Exchange Commission.

If the index closes at or above its initial level on any observation date, the notes will be called at par of $10 plus an annualized call premium of 6% to 10%. The exact call premium will be determined at pricing. The observation dates will occur six, nine and 12 months after the pricing date.

If the notes are not called, the payout at maturity will be par plus the index return. Investors will be exposed to any losses.

The notes are expected to price and settle in July.

BofA Merrill Lynch is the agent.

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