| Preliminary Pricing Supplement dated June , 2024 |
Subject to Completion Dated June 28, 2024 |
Registration Statement No. 333-275898
Filed Pursuant to Rule 424(b)(2) |
Royal Bank of Canada Trigger Absolute Return Autocallable Notes
$·
Notes Linked to the Common Stock of Target Corporation due on or about July
2, 2026
The Trigger Absolute Return Autocallable Notes (the “Notes”)
are senior unsecured debt securities issued by Royal Bank of Canada linked to the performance of the common stock of Target Corporation
(the “Underlying”). If the Underlying closes at or above the Initial Underlying Value on any quarterly Call Observation Date,
we will automatically call the Notes early and pay you a Call Price equal to the principal amount of your Notes plus a Call Return, and
no further amounts will be owed to you under the Notes. The Call Return increases based on the per annum Call Return Rate for each additional
quarter the Notes remain outstanding. If the Notes are not called prior to maturity and the Final Underlying Value is greater than or
equal to the Downside Threshold, we will pay you a cash payment at maturity equal to the principal amount of your Notes plus the Contingent
Absolute Return equal to the absolute value of the percentage decline in the value of the Underlying from the Initial Underlying Value
to the Final Underlying Value. However, if the Final Underlying Value is less than the Downside Threshold, the Contingent Absolute Return
will not apply and we will pay you less than the full principal amount at maturity, if anything, resulting in a loss of principal amount
that is proportionate to the negative Underlying Return, and you will lose up to 100% of the principal amount. Investing
in the Notes involves significant risks. The Notes do not pay interest. The Notes will not be automatically called if the Underlying closes
below the Initial Underlying Value on a quarterly Call Observation Date. You will lose a significant portion or all of your principal
amount if the Final Underlying Value is less than the Downside Threshold. The Contingent Absolute Return and any contingent repayment
of principal apply only at maturity. Generally, the higher the Call Return Rate on a Note, the greater the risk of loss. Any payment on
the Notes, including any repayment of principal, is subject to our creditworthiness. If we default on our payment obligations, you may
not receive any amounts owed to you under the Notes and you could lose your entire investment. The Notes will not be listed on any securities
exchange.
| Features |
|
☐ Call
Return— We will automatically call the Notes and pay you a Call Price equal to the principal amount of your Notes
plus the applicable Call Return if the closing value of the Underlying on any quarterly Call Observation Date is greater than or
equal to the Initial Underlying Value. The Call Return increases based on the per annum Call Return Rate for each additional quarter
the Notes remain outstanding. If the Notes are not called, investors will have the potential for downside equity market risk at maturity.
☐ Downside
Exposure with Contingent Absolute Return at Maturity— If by maturity the Notes have not been called and the Final
Underlying Value is greater than or equal to the Downside Threshold, we will repay the full principal amount plus the Contingent
Absolute Return at maturity. However, if the Final Underlying Value is less than the Downside Threshold, we will pay less than the
full principal amount at maturity, if anything, resulting in a loss of principal amount that is proportionate to the negative Underlying
Return. Accordingly, you may lose a significant portion or all of the principal amount of the Notes. Any payment on the Notes, including
any repayment of principal, is subject to our creditworthiness. |
| Key
Dates |
| Strike Date |
June 27, 2024 |
| Trade Date |
June 28, 2024 |
| Settlement Date |
July 3, 2024 |
| Call Observation Dates1 |
Quarterly (see page 5) |
| Final Valuation Date1 |
June 29, 2026 |
|
Maturity Date1 |
July 2, 2026 |
| 1 Subject
to postponement. See “General Terms of the1 Notes—Postponement of a Determination Date” and “General Terms
of the Notes—Postponement of a Payment Date” in the accompanying product supplement. |
NOTICE TO INVESTORS: THE NOTES ARE SIGNIFICANTLY RISKIER THAN CONVENTIONAL
DEBT INSTRUMENTS. WE ARE NOT NECESSARILY OBLIGATED TO REPAY THE FULL PRINCIPAL AMOUNT OF THE NOTES AT MATURITY, AND THE NOTES CAN HAVE
THE FULL DOWNSIDE MARKET RISK OF THE UNDERLYING. THIS MARKET RISK IS IN ADDITION TO THE CREDIT RISK INHERENT IN PURCHASING OUR DEBT OBLIGATIONS.
YOU SHOULD NOT PURCHASE THE NOTES IF YOU DO NOT UNDERSTAND OR ARE NOT COMFORTABLE WITH THE SIGNIFICANT RISKS INVOLVED IN INVESTING IN
THE NOTES.
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED UNDER “KEY RISKS”
BEGINNING ON PAGE 6 OF THIS PRICING SUPPLEMENT AND UNDER “RISK FACTORS” IN THE ACCOMPANYING PROSPECTUS, PROSPECTUS SUPPLEMENT
AND PRODUCT SUPPLEMENT BEFORE PURCHASING ANY NOTES. EVENTS RELATING TO ANY OF THOSE RISKS, OR OTHER RISKS AND UNCERTAINTIES, COULD ADVERSELY
AFFECT THE MARKET VALUE OF, AND THE RETURN ON, YOUR NOTES. YOU COULD LOSE A SIGNIFICANT PORTION OR ALL OF THE PRINCIPAL AMOUNT OF YOUR
NOTES.
We are offering Trigger Absolute Return Autocallable Notes Linked to the
Common Stock of Target Corporation. The Notes will be issued in minimum denominations of $10, and integral multiples of $10 in excess
thereof, with a minimum investment of $1,000. The Initial Underlying Value and Downside Threshold were determined on the Strike Date.
| Underlying |
Call Return Rate |
Initial Underlying Value* |
Downside Threshold** |
CUSIP/ ISIN |
| Common stock of Target Corporation (TGT) |
13.80% per annum |
$146.72 |
$102.70, which is 70% of the Initial Underlying Value |
78016U341 / US78016U3418 |
* The closing value of the Underlying on the Strike Date
** Rounded to two decimal places
See “Additional Information about Royal Bank of Canada and the
Notes” in this pricing supplement. The Notes will have the terms specified in the prospectus dated December 20, 2023, the prospectus
supplement dated December 20, 2023, the product supplement no. 1A dated May 16, 2024 and this pricing supplement.
None of the Securities and Exchange Commission (the “SEC”),
any state securities commission or any other regulatory body has approved or disapproved of the Notes or passed upon the adequacy or accuracy
of this pricing supplement. Any representation to the contrary is a criminal offense. The Notes will not constitute deposits insured by
the Canada Deposit Insurance Corporation, the U.S. Federal Deposit Insurance Corporation or any other Canadian or U.S. governmental agency
or instrumentality. The Notes are not bail-inable notes and are not subject to conversion into our common shares under subsection 39.2(2.3)
of the Canada Deposit Insurance Corporation Act.
| |
Price to Public |
Fees and Commissions(1) |
Proceeds to Us |
| Offering of the Notes |
Total |
Per Note |
Total |
Per Note |
Total |
Per Note |
| Notes Linked to the Common Stock of Target Corporation |
h |
$10.00 |
h |
$0.15 |
h |
$9.85 |
(1) UBS Financial Services Inc.,
which we refer to as UBS, will receive a commission of $0.15 per Note. See “Supplemental Plan of Distribution (Conflicts of Interest)”
below.
The initial estimated value of the Notes determined
by us as of the Trade Date, which we refer to as the initial estimated value, is expected to be between $9.27 and $9.77 per Note and
will be less than the public offering price of the Notes. The final pricing supplement relating to the Notes will set forth the initial
estimated value. The market value of the Notes at any time will reflect many factors, cannot be predicted with accuracy and may be less
than this amount. We describe the determination of the initial estimated value in more detail below.
| UBS Financial Services Inc. |
RBC Capital Markets, LLC |
| Additional
Information about Royal Bank of Canada and the Notes |
You may revoke your offer to purchase the Notes at any time prior to
the time at which we accept such offer by notifying the applicable agent. We reserve the right to change the terms of, or reject any offer
to purchase, the Notes prior to their issuance. In the event of any changes to the terms of the Notes, we will notify you and you will
be asked to accept such changes in connection with your purchase. You may also choose to reject such changes, in which case we may reject
your offer to purchase.
You should read this pricing supplement together with the prospectus
dated December 20, 2023, as supplemented by the prospectus supplement dated December 20, 2023, relating to our Senior Global Medium-Term
Notes, Series J, of which the Notes are a part, and the product supplement no. 1A dated May 16, 2024. This
pricing supplement, together with these documents, contains the terms of the Notes and supersedes all other prior or contemporaneous oral
statements as well as any other written materials, including preliminary or indicative pricing terms, correspondence, trade ideas, structures
for implementation, sample structures, fact sheets, brochures or other educational materials of ours.
We have not authorized anyone to provide any information or to make
any representations other than those contained or incorporated by reference in this pricing supplement and the documents listed below.
We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you.
These documents are an offer to sell only the Notes offered hereby, but only under circumstances and in jurisdictions where it is lawful
to do so. The information contained in each such document is current only as of its date.
If the information in this pricing supplement differs from the information
contained in the documents listed below, you should rely on the information in this pricing supplement.
You should carefully consider, among other things, the matters set forth
in “Key Risks” in this pricing supplement and “Risk Factors” in the documents listed below, as the Notes involve
risks not associated with conventional debt securities. We urge you to consult your investment, legal, tax, accounting and other advisers
before you invest in the Notes.
You may access these documents on the SEC website at www.sec.gov
as follows (or if such address has changed, by reviewing our filings for the relevant date on the SEC website):
Our Central Index Key, or CIK, on the SEC website is 1000275. As used
in this pricing supplement, “Royal Bank of Canada,” the “Bank,” “we,” “our” and “us”
mean only Royal Bank of Canada.
| Selected
Purchase Considerations |
|
The Notes may be appropriate for you if, among other considerations:
¨ You
fully understand the risks inherent in an investment in the Notes, including the risk of loss of your entire initial investment.
¨ You
can tolerate the loss of a significant portion or all of the principal amount of the Notes and are willing to make an investment that
may have the full downside market risk of the Underlying.
¨ You
believe that the closing value of the Underlying will be greater than or equal to the Initial Underlying Value on any Call Observation
Date, or that the closing value of the Underlying will be greater than or equal to the Downside Threshold on the Final Valuation Date.
¨ You
are willing to make an investment whose return is limited to the Call Return, regardless of any potential appreciation of the Underlying,
which could be significant, or, if the Notes have not been called, to the Contingent Absolute Return.
¨ You
are willing to invest in the Notes based on the Call Return Rate set forth on the cover page of this pricing supplement.
¨ You
do not seek current income from your investment and are willing to forgo the dividends paid on the Underlying.
¨ You
can tolerate fluctuations in the price of the Notes prior to maturity that may be similar to or exceed the downside fluctuations in the
value of the Underlying.
¨ You
fully understand and accept the risks associated with the Underlying.
¨ You
are willing to invest in Notes that may be called early and you are otherwise willing to hold the Notes to maturity and accept that there
may be little or no secondary market for the Notes.
¨ You
are willing to assume our credit risk for all payments under the Notes, and understand that if we default on our obligations, you may
not receive any amounts due to you, including any repayment of principal. |
The Notes may not be appropriate for you if, among
other considerations:
¨ You
do not fully understand the risks inherent in an investment in the Notes, including the risk of loss of your entire initial investment.
¨ You
cannot tolerate the loss of a significant portion or all of the principal amount of the Notes, and you are not willing to make an investment
that may have the full downside market risk of the Underlying.
¨ You
believe that the value of the Underlying will decline during the term of the Notes and is likely to close below the Initial Underlying
Value on all of the Call Observation Dates and below the Downside Threshold on the Final Valuation Date.
¨ You
seek an investment that participates in the full appreciation in the value of the Underlying or that has unlimited return potential.
¨ You
are unwilling to invest in the Notes based on the Call Return Rate set forth on the cover page of this pricing supplement.
¨ You
seek current income from your investment or prefer to receive the dividends paid on the Underlying.
¨ You
cannot tolerate fluctuations in the price of the Notes prior to maturity that may be similar to or exceed the downside fluctuations in
the value of the Underlying.
¨ You
do not fully understand or accept the risks associated with the Underlying.
¨ You
are unable or unwilling to hold Notes that may be called early, or you are otherwise unable or unwilling to hold the Notes to maturity,
or you seek an investment for which there will be an active secondary market.
¨ You
are not willing to assume our credit risk for all payments under the Notes, including any repayment of principal.
|
The considerations identified above are not exhaustive. Whether or
not the Notes are an appropriate investment for you will depend on your individual circumstances, and you should reach an investment decision
only after you and your investment, legal, tax, accounting, and other advisers have carefully considered the appropriateness of an investment
in the Notes in light of your particular circumstances. You should also review carefully the “Key Risks” in this pricing supplement
and “Risk Factors” in the accompanying prospectus, prospectus supplement and product supplement for risks related to an investment
in the Notes. For more information about the Underlying, see “Information about the Underlying” below.
| Indicative Terms of the Notes1 |
| Issuer: |
Royal Bank of Canada |
| Principal Amount: |
$10 per Note (subject to minimum investment of 100 Notes) |
| Term: |
Approximately two years, if not previously called |
| Underlying: |
The common stock of Target Corporation (“TGT”) |
| Automatic Call Feature: |
The Notes will be called automatically if the closing value of the Underlying on any Call Observation Date (set forth on page 5) is greater than or equal to the Initial Underlying Value. If the Notes are called, we will pay you on the corresponding Call Settlement Date (set forth on page 5) an amount per Note equal to the Call Price. No further amounts will be owed to you under the Notes. |
| Call Price: |
The Call Price will be calculated based on the following formula:
$10 + ($10 × Call Return) |
| Call Return |
The Call Price will be a fixed amount based upon the Call Return.
The Call Return increases based on the per annum Call Return Rate for each additional quarter the Notes remain outstanding.
The table on the following page sets forth each Call Observation Date,
each Call Settlement Date and the corresponding Call Return and Call Price for the Notes. |
| Call Return Rate |
13.80% per annum |
| Payment at Maturity: |
If
the Notes are not called and the Final Underlying Value is greater than or equal to the Downside Threshold, we will pay you
at maturity an amount per Note equal to:
$10 + ($10 ×
Contingent Absolute Return)
If
the Notes are not called and the Final Underlying Value is less than the Downside Threshold, we will pay you at maturity an
amount per Note equal to:
$10 + ($10 × Underlying Return)
In this scenario, you will lose a significant portion or all of the
principal amount of the Notes in an amount proportionate to the negative Underlying Return. |
| Underlying Return: |
Final Underlying Value – Initial Underlying
Value
Initial Underlying Value |
| Downside Threshold: |
A percentage of the Initial Underlying Value, as specified on the cover of this pricing supplement |
| Contingent Absolute Return |
The absolute value of the Underlying Return. For example, if the Underlying Return is -5%, the Contingent Absolute Return is 5%. |
| Initial Underlying Value: |
The closing value of the Underlying on the Strike Date, as specified on the cover of this pricing supplement. The Initial Underlying Value is not the closing value of the Underlying on the Trade Date. |
| Final Underlying Value: |
The closing value of the Underlying on the Final Valuation Date |
| Calculation Agent: |
RBC Capital Markets, LLC (“RBCCM”) |
| Investment Timeline |
| |
Strike Date: |
|
The Initial Underlying Value and Downside Threshold were determined. |
| |
 |
|
|
| |
Quarterly: |
|
The Notes will be called if the closing
value of the Underlying on any Call Observation Date is greater than or equal to the Initial Underlying Value.
If the Notes are called, we will pay you an amount per Note equal to
the Call Price. |
| |
|
|
|
| |
Maturity Date: |
|
The Final Underlying Value is
observed on the Final Valuation Date.
If
the Notes are not called and the Final Underlying Value is greater than or equal to the Downside Threshold, we will pay you
at maturity an amount per Note equal to:
$10 + ($10 × Contingent
Absolute Return)
If
the Notes are not called and the Final Underlying Value is less than the Downside Threshold, we will pay you at maturity an
amount per Note equal to:
$10 + ($10 × Underlying Return)
In this scenario, you will lose a significant portion or all of the
principal amount of the Notes in an amount proportionate to the negative Underlying Return. |
| |
|
Investing in the Notes involves significant risks. The Notes do not
pay interest. The Notes will not be automatically called if the Underlying closes below the Initial Underlying Value on a quarterly Call
Observation Date. You will lose a significant portion or all of your principal amount if the Final Underlying Value is less than the Downside
Threshold. The Contingent Absolute Return and any contingent repayment of principal apply only at maturity. Generally, the higher the
Call Return Rate on a Note, the greater the risk of loss. Any payment on the Notes, including any repayment of principal, is subject to
our creditworthiness. If we default on our payment obligations, you may not receive any amounts owed to you under the Notes and you could
lose your entire investment.
1 Terms used in this pricing supplement, but not defined
herein, shall have the meanings ascribed to them in the accompanying product supplement. |
| Call
Observation Dates and Call Settlement Dates* |
| Call Observation Dates |
Call Settlement Dates |
Call Return |
Call Price |
| September 30, 2024 |
October 2, 2024 |
3.45% |
$10.345 |
| December 30, 2024 |
January 2, 2025 |
6.90% |
$10.690 |
| March 28, 2025 |
April 1, 2025 |
10.35% |
$11.035 |
| June 30, 2025 |
July 2, 2025 |
13.80% |
$11.380 |
| September 29, 2025 |
October 1, 2025 |
17.25% |
$11.725 |
| December 29, 2025 |
December 31, 2025 |
20.70% |
$12.070 |
| March 30, 2026 |
April 1, 2026 |
24.15% |
$12.415 |
| June 29, 2026 (Final Valuation Date) |
July 2, 2026 (Maturity Date) |
27.60% |
$12.760 |
*Subject to postponement. See “General Terms of the Notes—Postponement
of a Determination Date” and “General Terms of the Notes—Postponement of a Payment Date” in the accompanying product
supplement.
An investment in the Notes involves significant risks. We urge you to
consult your investment, legal, tax, accounting and other advisers before you invest in the Notes. Some of the risks that apply to an
investment in the Notes are summarized below, but we urge you to read also the “Risk Factors” sections of the accompanying
prospectus, prospectus supplement and product supplement. You should not purchase the Notes unless you understand and can bear the risks
of investing in the Notes.
Risks Relating to the Terms and Structure of the Notes
| ¨ | Your Investment in the Notes May Result in a Loss of Principal
— The Notes differ from ordinary debt securities in that we are not necessarily obligated to repay the full principal amount of
the Notes at maturity. If the Notes are not called and the Final Underlying Value is less than the Downside Threshold, you will be exposed
to the negative Underlying Return, and we will pay you less than your principal amount at maturity, if anything, resulting in a loss of
principal of your Notes that is proportionate to the percentage decline in the Underlying. Accordingly, you could lose a significant portion
or all of the principal amount of the Notes. |
| ¨ | Payments on the Notes Are Subject to Our Credit Risk, and Market Perceptions
about Our Creditworthiness May Adversely Affect the Market Value of the Notes — The Notes are our senior unsecured debt
securities, and your receipt of any amounts due on the Notes is dependent upon our ability to pay our obligations as they come due. If
we were to default on our payment obligations, you may not receive any amounts owed to you under the Notes and you could lose your entire
investment. In addition, any negative changes in market perceptions about our creditworthiness may adversely affect the market value of
the Notes. |
| ¨ | The Contingent Repayment of Principal Applies Only If You Hold the Notes
to Maturity — The contingent repayment of principal applies only at maturity. If you are able to sell your Notes in the
secondary market prior to maturity, you may have to sell them at a loss even if the value of the Underlying is above the Downside Threshold
at the time of sale. |
| ¨ | You Will Not Participate in Any Appreciation of the Underlying, and Any
Potential Return on the Notes Is Limited — The return on the Notes is limited to the pre-specified Contingent Absolute
Return, regardless of the appreciation of the Underlying. As a result, the return on an investment in the Notes could be less than the
return on a direct investment in the Underlying. Further, if the Notes are called due to the automatic call feature, you will not receive
any other payments after the applicable Call Settlement Date. Since the Notes could be called as early as the first Call Observation Date,
the total return on the Notes could be minimal. On the other hand, if the Notes have not been previously called and if the value of the
Underlying is less than the Initial Underlying Value, as the Maturity Date approaches and the remaining number of Call Observation Dates
decreases, the Notes are less likely to be automatically called, as there will be a shorter period of time remaining for the value of
the Underlying to increase to the Initial Underlying Value. If the Notes are not called, you may be subject to the Underlying’s
risk of decline. |
| ¨ | The Call Return Rate Reflects in Part the Volatility of the Underlying
and May Not Be Sufficient to Compensate You for the Risk of Loss At Maturity — Volatility is a measure of the degree
of variation in the value of the Underlying over a period of time. The greater the volatility of the Underlying, the more likely it is
that the value of the Underlying could close below the Downside Threshold on the Final Valuation Date. This risk is generally reflected
in a higher Call Return Rate for the Notes than the interest rate payable on our conventional debt securities with a comparable term.
However, while the Call Return Rate is a fixed amount, the Underlying’s volatility can change significantly over the term of the
Notes. The value of the Underlying could fall sharply, which could result in the Notes not being called and a significant loss of your
principal amount. |
| ¨ | The Notes May Be Called Early and Are Subject to Reinvestment Risk
— The Notes will be called automatically if the closing value of the Underlying is greater than or equal to the Initial Underlying
Value on any Call Observation Date. In the event that the Notes are called prior to maturity, there is no guarantee that you will be able
to reinvest the proceeds from an investment in the Notes at a comparable rate of return for a similar level of risk. To the extent you
are able to reinvest your proceeds in an investment comparable to the Notes, you will incur transaction costs and the original issue price
for such an investment is likely to include certain built in costs such as dealer discounts and hedging costs. |
| ¨ | The Notes Do Not Pay Interest, and Your Return on the Notes May Be Lower
Than the Return on a Conventional Debt Security of Comparable Maturity — There will be no periodic interest payments
on the Notes as there would be on a conventional fixed-rate or floating-rate debt security having the same maturity. The return that |
you will receive on the Notes, which could
be negative, may be less than the return you could earn on other investments. Even if your return is positive, your return may be less
than the return you would earn if you purchased one of our conventional senior interest-bearing debt securities.
| ¨ | Any Payment on the Notes Will Be Determined Based on the Closing Values
of the Underlying on the Dates Specified — Any payment on the Notes will be determined based on the closing values of
the Underlying on the dates specified. You will not benefit from any more favorable value of the Underlying determined at any other time. |
| ¨ | The Notes Will Be Subject to Risks, Including Non-Payment in Full, under
Canadian Bank Resolution Powers — Under Canadian bank resolution powers, the Canada Deposit Insurance Corporation (“CDIC”)
may, in circumstances where we have ceased, or are about to cease, to be viable, assume temporary control or ownership over us and may
be granted broad powers by one or more orders of the Governor in Council (Canada), including the power to sell or dispose of all or a
part of our assets, and the power to carry out or cause us to carry out a transaction or a series of transactions the purpose of which
is to restructure our business. See “Description of Debt Securities—Canadian Bank Resolution Powers” in the accompanying
prospectus for a description of the Canadian bank resolution powers. If the CDIC were to take action under the Canadian bank resolution
powers with respect to us, holders of the Notes could be exposed to losses. |
| ¨ | The U.S. Federal Income Tax Consequences of an Investment in the Notes
Are Uncertain —There is no direct legal authority regarding the proper U.S. federal income tax treatment of the Notes,
and significant aspects of the tax treatment of the Notes are uncertain. You should review carefully the section entitled “What
Are the Tax Consequences of the Notes?—United States Federal Income Tax Considerations” herein, in combination with the section
entitled “United States Federal Income Tax Considerations” in the accompanying product supplement, and consult your tax adviser
regarding the U.S. federal income tax consequences of an investment in the Notes. |
Risks Relating to the Initial Estimated Value of the Notes and the
Secondary Market for the Notes
| ¨ | There May Not Be an Active Trading Market for the Notes; Sales in the Secondary
Market May Result in Significant Losses — There may be little or no secondary market for the Notes. The Notes will not
be listed on any securities exchange. RBCCM and our other affiliates intend to make a market for the Notes; however, they are not required
to do so and, if they choose to do so, may stop any market-making activities at any time. Because other dealers are not likely to make
a secondary market for the Notes, the price at which you may be able to trade your Notes is likely to depend on the price, if any, at
which RBCCM or any of our other affiliates is willing to buy the Notes. Even if a secondary market for the Notes develops, it may not
provide enough liquidity to allow you to easily trade or sell the Notes. We expect that transaction costs in any secondary market would
be high. As a result, the difference between bid and ask prices for your Notes in any secondary market could be substantial. If you sell
your Notes before maturity, you may have to do so at a substantial discount from the price that you paid for them, and as a result, you
may suffer significant losses. The Notes are not designed to be short-term trading instruments. Accordingly, you should be able and willing
to hold your Notes to maturity. |
| ¨ | The Initial Estimated Value of the Notes Will Be Less Than the Public Offering
Price — The initial estimated value of the Notes will be less than the public offering price of the Notes and does not
represent a minimum price at which we, RBCCM or any of our other affiliates would be willing to purchase the Notes in any secondary market
(if any exists) at any time. If you attempt to sell the Notes prior to maturity, their market value may be lower than the price you paid
for them and the initial estimated value. This is due to, among other things, changes in the value of the Underlying, the internal funding
rate we pay to issue securities of this kind (which is lower than the rate at which we borrow funds by issuing conventional fixed rate
debt), and the inclusion in the public offering price of the underwriting discount, our estimated profit and the estimated costs relating
to our hedging of the Notes. These factors, together with various credit, market and economic factors over the term of the Notes, are
expected to reduce the price at which you may be able to sell the Notes in any secondary market and will affect the value of the Notes
in complex and unpredictable ways. Assuming no change in market conditions or any other relevant factors, the price, if any, at which
you may be able to sell your Notes prior to maturity may be less than your original purchase price, as any such sale price would not be
expected to include the underwriting discount, our estimated profit or the hedging costs relating to the Notes. In addition, any price
at which you may sell the Notes is likely to reflect customary bid-ask spreads for similar trades. In addition to bid-ask spreads, the
value of the Notes determined for any secondary market price is expected to be based on a secondary market rate rather than the internal
funding rate used to price the Notes and determine the initial estimated
value. As a result, the secondary market price will be less than if the internal funding rate were used. |
| ¨ | The Initial Estimated Value of the Notes Is Only an Estimate, Calculated
as of the Trade Date — The initial estimated value of the Notes is based on the value of our obligation to make the payments
on the Notes, together |
with the mid-market value of the derivative
embedded in the terms of the Notes. See “Structuring the Notes” below. Our estimate is based on a variety of assumptions,
including our internal funding rate (which represents a discount from our credit spreads), expectations as to dividends, interest rates
and volatility and the expected term of the Notes. These assumptions are based on certain forecasts about future events, which may prove
to be incorrect. Other entities may value the Notes or similar securities at a price that is significantly different than we do.
The value of the Notes at any time after
the Trade Date will vary based on many factors, including changes in market conditions, and cannot be predicted with accuracy. As a result,
the actual value you would receive if you sold the Notes in any secondary market, if any, should be expected to differ materially from
the initial estimated value of the Notes.
| ¨ | The Terms of the Notes at Issuance and Their Market Value Prior to Maturity
Are Influenced by Many Unpredictable Factors — Many economic and market factors influence the terms of the Notes at issuance
and affect their value prior to maturity. These factors are similar in some ways to those that could affect the value of a combination
of instruments that might be used to replicate the payments on the Notes, including a combination of a bond with one or more options or
other derivative instruments. For the market value of the Notes, we expect that, generally, the value of the Underlying on any day will
affect the value of the Notes more than any other single factor. However, you should not expect the value of the Notes in the secondary
market to vary in proportion to changes in the value of the Underlying. The value of the Notes will be affected by a number of other factors
that may either offset or magnify each other, including: |
| ¨ | the value of the Underlying; |
| ¨ | whether the value of the Underlying is below the Initial
Underlying Value or the Downside Threshold; |
| ¨ | the actual and expected volatility of the Underlying; |
| ¨ | the time remaining to maturity of the Notes; |
| ¨ | the dividend rate on the Underlying; |
| ¨ | interest and yield rates in the market generally, as well as in the markets of the Underlying; |
| ¨ | a variety of economic, financial, political, regulatory or judicial events; and |
| ¨ | our creditworthiness, including actual or anticipated downgrades
in our credit ratings. |
Some or all of these factors influence
the terms of the Notes at issuance and affect the price you will receive if you choose to sell the Notes prior to maturity. The impact
of any of the factors set forth above may enhance or offset some or all of any change resulting from another factor or factors.
Risks Relating to Conflicts of Interest and Our
Trading Activities
| ¨ | Our, Our Affiliates’ and UBS’s Business and Trading Activities
May Create Conflicts of Interest — You should make your own independent investigation of the merits of investing in the
Notes. Our, our affiliates’ and UBS’s economic interests are potentially adverse to your interests as an investor in the Notes
due to our, our affiliates’ and UBS’s business and trading activities, and we, our affiliates and UBS have no obligation to
consider your interests in taking any actions that might affect the value of the Notes. Trading by us, UBS and our respective affiliates
may adversely affect the value of the Underlying and the market value of the Notes. See “Risk Factors—Risks Relating to Conflicts
of Interest” in the accompanying product supplement. |
| ¨ | RBCCM’s Role as Calculation Agent May Create Conflicts of Interest
— As Calculation Agent, our affiliate, RBCCM, will determine any values of the Underlying and make any other determinations necessary
to calculate any payments on the Notes. In making these determinations, the Calculation Agent may be required to make discretionary judgments,
including those described under “—Risks Relating to the Underlying” below. In making these discretionary judgments,
the economic interests of the Calculation Agent are potentially adverse to your interests as an investor in the Notes, and any of these
determinations may adversely affect any payments on the Notes. The Calculation Agent will have no obligation to consider your interests
as an investor in the Notes in making any determinations with respect to the Notes. |
Risks Relating to the Underlying
| ¨ | An Investment in the Notes Is Subject to Single Stock Risk—The
value of the Underlying can rise or fall sharply due to factors specific to the Underlying and its issuer, such as stock price volatility,
earnings, financial conditions, corporate, industry and regulatory developments, management changes and decisions and other events, as
well as general market factors, such as general stock market volatility and levels, interest rates and economic and political |
conditions. You, as an investor in the
Notes, should make your own investigation into the Underlying issuer and the Underlying for your Notes. For additional information about
the Underlying and its issuer, please see “Information about the Underlying” in this pricing supplement and the Underlying
issuer’s SEC filings referred to in that section. We urge you to review financial and other information filed periodically by the
Underlying issuer with the SEC.
| ¨ | You Will Not Have Any Rights to the Underlying —As an
investor in the Notes, you will not have voting rights or rights to receive dividends or other distributions or any other rights with
respect to the Underlying. |
| ¨ | Any Payment on the Notes May Be Postponed and Adversely Affected by the
Occurrence of a Market Disruption Event —The timing and amount of any payment on the Notes is subject to adjustment upon
the occurrence of a market disruption event affecting the Underlying. If a market disruption event persists for a sustained period, the
Calculation Agent may make a discretionary determination of the closing value of the Underlying. See “General Terms of the Notes—Reference
Stocks and Funds—Market Disruption Events,” “General Terms of the Notes—Postponement of a Determination Date”
and “General Terms of the Notes—Postponement of a Payment Date” in the accompanying product supplement. |
| ¨ | Anti-dilution Protection Is Limited, and the Calculation Agent Has Discretion
to Make Anti-dilution Adjustments — The Calculation Agent may in its sole discretion make adjustments affecting any amounts
payable on the Notes upon the occurrence of certain corporate events (such as stock splits or extraordinary or special dividends) that
the Calculation Agent determines have a diluting or concentrative effect on the theoretical value of the Underlying. However, the Calculation
Agent might not make adjustments in response to all such events that could affect the Underlying. The occurrence of any such event and
any adjustment made by the Calculation Agent (or a determination by the Calculation Agent not to make any adjustment) may adversely affect
the market price of, and any amounts payable on, the Notes. See “General Terms of the Notes—Reference Stocks and Funds—Anti-dilution
Adjustments” in the accompanying product supplement. |
| ¨ | Reorganization or Other Events Could Adversely Affect the Value of the
Notes or Result in the Notes Being Accelerated — Upon the occurrence of certain reorganization or other events affecting
the Underlying, the Calculation Agent may make adjustments that result in payments on the Notes being based on the performance of (i)
cash, securities of another issuer and/or other property distributed to holders of the Underlying upon the occurrence of that event or
(ii) in the case of a reorganization event in which only cash is distributed to holders of the Underlying, a substitute security, if the
Calculation Agent elects to select one. Any of these actions could adversely affect the value of the Underlying and, consequently, the
value of the Notes. Alternatively, the Calculation Agent may accelerate the Maturity Date for a payment determined by the Calculation
Agent. Any amount payable upon acceleration could be significantly less than any amount that would be due on the Notes if they were not
accelerated. However, if the Calculation Agent elects not to accelerate the Notes, the value of, and any amount payable on, the Notes
could be adversely affected, perhaps significantly. See “General Terms of the Notes—Reference Stocks and Funds—Anti-dilution
Adjustments—Reorganization Events” in the accompanying product supplement. |
Hypothetical terms only. Actual terms may vary.
See the cover page for actual offering terms.
The examples are hypothetical and provided for illustrative purposes
only. You should not take these examples as an indication or assurance of the expected performance of the Underlying. The numbers appearing
in the examples and tables below have been rounded for ease of analysis. The following examples and tables illustrate the payment at maturity
or upon an automatic call per Note on a hypothetical offering of the Notes, based on the following hypothetical assumptions:
| Principal Amount: |
$10 |
| Term: |
Approximately two years (unless earlier called) |
| Call Return Rate: |
13.80% per annum |
| Call Observation Dates: |
Quarterly |
| Hypothetical Initial Underlying Value*: |
$100.00 |
| Hypothetical Downside Threshold*: |
$70.00 (which is 70% of the hypothetical Initial Underlying Value) |
*Not the actual Initial Underlying Value or Downside Threshold
applicable to the Notes. The actual Initial Underlying Value and Downside Threshold are set forth on the cover page of this pricing supplement.
Example 1 — Notes Are Called on the First Call Observation
Date.
| Date |
Closing Value |
Payment (per Note) |
| First Call Observation Date |
$110.00 (at or above Initial Underlying Value) |
$10.345 |
| |
Total Payment: |
$10.345 (3.45% return) |
Because the closing value of the Underlying on the first Call Observation
Date is at or above the Initial Underlying Value, the Notes are called, and we will pay you on the first Call Settlement Date a total
Call Price of $10.345 per Note, for a total return of 3.45% on the Notes. No further amount will be owed to you under the Notes.
Example 2 —Notes Are Called on the Final Valuation Date.
| Date |
Closing Value |
Payment (per Note) |
| First through Seventh Call Observation Date |
Various (below Initial Underlying Value) |
$0.00 (Not called) |
| Final Valuation Date |
$120 (at or above Initial Underlying Value) |
$12.76 (Payment at Maturity) |
| |
Total Payment: |
$12.76 (27.60% return) |
Because closing value of the Underlying on the Final Valuation Date
is at or above the Initial Underlying Value, the Notes are called on the Final Valuation Date and we will pay you at maturity the Call
Price of $12.76 per Note, for a total return of 27.60% on the Notes.
Example 3 —Notes Are NOT Called and the Final Underlying Value
Is Above the Downside Threshold on the Final Valuation Date.
| Date |
Closing Value |
Payment (per Note) |
| First through Seventh Call Observation Date |
Various (below Initial Underlying Value) |
$0.00 (Not called) |
| Final Valuation Date |
$90 (at or above Downside Threshold; below Initial Underlying Value) |
$10.00 + ($10.00 × Contingent Absolute Return)
$10.00 + ($10.00 × 10%)
$11.00 (Payment at Maturity) |
| |
Total Payment: |
$11.00 (10.00% return) |
Because the Notes are not called and Final Underlying Value is below
the Initial Underlying Value but greater than the Downside Threshold on the Final Valuation Date, we will pay you at maturity a total
of $11.00 per Note, for a total return of 10.00% on the Notes. Accordingly, even though the value of the Underlying has decreased, you
will receive a positive return on the Notes.
Example 4 — Notes Are NOT Called and the Final Underlying Value
Is Below the Downside Threshold on the Final Valuation Date.
| Date |
Closing Value |
Payment (per Note) |
| First through Seventh Call Observation Date |
Various (below Initial Underlying Value) |
$0.00 (Not called) |
| Final Valuation Date |
$50 (below Downside Threshold) |
$10.00 + ($10.00 × Underlying Return)
$10.00 + ($10.00 × - 50%)
$5.00 (Payment at Maturity) |
| |
Total Payment: |
$5.00 (-50.00% return) |
Because the Notes are not called and the Final Underlying Value is less
than the Downside Threshold, we will pay you at maturity $5.00 per Note, for a loss of 50.00% on the Notes. You will incur a loss at maturity
equal to the full decline of the Underlying.
The Notes differ from ordinary debt securities in that we are not
necessarily obligated to repay the full principal amount of the Notes at maturity. If the Notes are not called and the Final Underlying
Value is less than the Downside Threshold, you will be exposed to the negative Underlying Return, and we will pay you less than your principal
amount at maturity, if anything, resulting in a loss of principal of your Notes that is proportionate to the percentage decline in the
Underlying.
Your receipt of any amounts due on the Notes is dependent upon our
ability to pay our obligations as they come due. If we were to default on our payment obligations, you may not receive any amounts owed
to you under the Notes and you could lose your entire investment.
| What Are the Tax
Consequences of the Notes? |
United States Federal Income Tax Considerations
You should review carefully the section in the accompanying product
supplement entitled “United States Federal Income Tax Considerations.” The following discussion, when read in combination
with that section, constitutes the full opinion of our counsel, Davis Polk & Wardwell LLP, regarding the material U.S. federal income
tax consequences of owning and disposing of the Notes.
Generally, this discussion assumes that you purchased the Notes for
cash in the original issuance at the stated issue price and does not address other circumstances specific to you, including consequences
that may arise due to any other investments relating to the Underlying. You should consult your tax adviser regarding the effect any such
circumstances may have on the U.S. federal income tax consequences of your ownership of a Note.
In the opinion of our counsel, which is based on current market conditions,
it is reasonable to treat the Notes for U.S. federal income tax purposes as prepaid financial contracts that are “open transactions,”
as described in the section entitled “United States Federal Income Tax Considerations—Tax Consequences to U.S. Holders—Notes
Treated as Prepaid Financial Contracts that are Open Transactions” in the accompanying product supplement. There is uncertainty
regarding this treatment, and the Internal Revenue Service (the “IRS”) or a court might not agree with it. Moreover, because
this treatment of the Notes and our counsel’s opinion are based on market conditions as of the date of this preliminary pricing
supplement, each is subject to confirmation on the Trade Date. A different tax treatment could be adverse to you. Generally, if this treatment
is respected, (i) you should not recognize taxable income or loss prior to the taxable disposition of your notes (including upon maturity
or an earlier redemption, if applicable) and (ii) the gain or loss on your notes should be treated as short-term capital gain or loss
unless you have held the notes for more than one year, in which case your gain or loss should be treated as long-term capital gain or
loss.
We do not plan to request a ruling from the IRS regarding the treatment
of the Notes. An alternative characterization of the Notes could materially and adversely affect the tax consequences of ownership and
disposition of the Notes, including the timing and character of income recognized. In addition, the U.S. Treasury Department and the IRS
have requested comments on various issues regarding the U.S. federal income tax treatment of “prepaid forward contracts” and
similar financial instruments and have indicated that such transactions may be the subject of future regulations or other guidance. Furthermore,
members of Congress have proposed legislative changes to the tax treatment of derivative contracts. Any legislation, Treasury regulations
or other guidance promulgated after consideration of these issues could materially and adversely affect the tax consequences of an investment
in the Notes, possibly with retroactive effect.
Non-U.S. Holders. As discussed under “United States
Federal Income Tax Considerations—Tax Consequences to Non-U.S. Holders—Dividend Equivalents under Section 871(m) of the Code”
in the accompanying product supplement, Section 871(m) of the Internal Revenue Code and Treasury regulations promulgated thereunder (“Section
871(m)”) generally impose a 30% withholding tax on dividend equivalents paid or deemed paid to Non-U.S. Holders with respect to
certain financial instruments linked to U.S. equities or indices that include U.S. equities. The Treasury regulations, as modified by
an IRS notice, exempt financial instruments issued prior to January 1, 2027 that do not have a “delta” of one. Based on certain
determinations made by us, we expect that Section 871(m) will not apply to the Notes with regard to Non-U.S. Holders. Our determination
is not binding on the IRS, and the IRS may disagree with this determination. If necessary, further information regarding the potential
application of Section 871(m) will be provided in the final pricing supplement for the Notes.
We will not be required to pay any additional amounts with respect to
U.S. federal withholding taxes.
You should consult your tax adviser regarding the U.S. federal income
tax consequences of an investment in the Notes, including possible alternative treatments, as well as tax consequences arising under the
laws of any state, local or non-U.S. taxing jurisdiction.
Canadian Federal Income Tax Consequences
For a discussion of the material Canadian federal income tax consequences
relating to an investment in the Notes, please see the section entitled “Supplemental Discussion of Canadian Tax Consequences”
in the accompanying product supplement, which you should carefully review prior to investing in the Notes.
| Information about the Underlying |
The Underlying is registered under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). Companies with securities registered under the Exchange Act are required
to file financial and other information specified by the SEC periodically. Information provided to or filed with the SEC by the issuer
of the Underlying can be located on a website maintained by the SEC at https://www.sec.gov by reference to that issuer’s SEC file
number provided below. Information from outside sources is not incorporated by reference in, and should not be considered part of, this
pricing supplement. We have not independently verified the accuracy or completeness of the information contained in outside sources.
According to publicly available information, Target
Corporation sells an assortment of general merchandise and food through its general merchandise stores, small format stores and digital
channels.
The issuer of the Underlying’s SEC file number
is 001-06049. The Underlying is listed on the New York Stock Exchange under the ticker symbol “TGT.”
Historical Information
The following graph sets forth historical closing
values of the Underlying for the period from January 1, 2014 through June 27, 2024, reflecting the Initial Underlying Value of $146.72,
the closing value on June 27, 2024. The solid line represents the Downside Threshold of $102.70, which is equal to 70% of the Initial
Underlying Value. We obtained the information in the graph from Bloomberg Financial Markets, without independent investigation. The
historical performance of the Underlying should not be taken as an indication of its future performance. We cannot give you assurance
that the performance of the Underlying will result in the return of all of your initial investment.
The Common Stock of Target Corporation
n
Downside Threshold = 70% of the Initial Underlying Value
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE
RESULTS.
| Supplemental Plan
of Distribution (Conflicts of Interest) |
We have agreed to indemnify UBS and RBCCM against liabilities under
the Securities Act of 1933, as amended, or to contribute payments that UBS and RBCCM may be required to make relating to these liabilities
as described in the prospectus supplement and the prospectus. We have agreed that UBS may sell all or a part of the Notes that it will
purchase from us to investors or to its affiliates at the price to public listed on the cover page of this pricing supplement. UBS may
allow a concession not in excess of the underwriting discount set forth on the cover page of this pricing supplement to its affiliates
for distribution of the Notes.
We or our affiliates may enter into swap agreements or related hedge
transactions with one of our other affiliates or unaffiliated counterparties in connection with the sale of the Notes and RBCCM and/or
an affiliate may earn additional income as a result of payments pursuant to the swap or related hedge transactions. See “Use of
Proceeds and Hedging” in the accompanying product supplement.
The value of the Notes shown on your account statement may be based
on RBCCM’s estimate of the value of the Notes if RBCCM or another of our affiliates were to make a market in the Notes (which it
is not obligated to do). That estimate will be based on the price that RBCCM may pay for the Notes in light of then-prevailing market
conditions, our creditworthiness and transaction costs. For a period of approximately seven months after the Settlement Date, the value
of the Notes that may be shown on your account statement may be higher than RBCCM’s estimated value of the Notes at that time. This
is because the estimated value of the Notes will not include the underwriting discount or our hedging costs and profits; however, the
value of the Notes shown on your account statement during that period may initially be a higher amount, reflecting the addition of the
underwriting discount and our estimated costs and profits from hedging the Notes. This excess is expected to decrease over time until
the end of this period. After this period, if RBCCM repurchases your Notes, it expects to do so at prices that reflect their estimated
value. This period may be reduced at RBCCM’s discretion based on a variety of factors, including but not limited to, the amount
of the Notes that we repurchase and our negotiated arrangements from time to time with UBS.
RBCCM or another of its affiliates or agents may use this pricing supplement
in the initial sale of the Notes. In addition, RBCCM or another of our affiliates may use this pricing supplement in a market-making transaction
in the Notes after their initial sale. Unless we or our agent informs the purchaser otherwise in the confirmation of sale, this pricing
supplement is being used in a market-making transaction.
For additional information about the settlement cycle of the Notes,
see “Plan of Distribution” in the accompanying prospectus. For additional information as to the relationship between us and
RBCCM, see the section “Plan of Distribution—Conflicts of Interest” in the accompanying prospectus.
The Notes are our debt securities. As is the case for all of our debt
securities, including our structured notes, the economic terms of the Notes reflect our actual or perceived creditworthiness. In addition,
because structured notes result in increased operational, funding and liability management costs to us, we typically borrow the funds
under structured notes at a rate that is lower than the rate that we might pay for a conventional fixed or floating rate debt security
of comparable maturity. The lower internal funding rate, the underwriting discount and the hedging-related costs relating to the Notes
reduce the economic terms of the Notes to you and result in the initial estimated value for the Notes being less than their public offering
price. Unlike the initial estimated value, any value of the Notes determined for purposes of a secondary market transaction may be based
on a secondary market rate, which may result in a lower value for the Notes than if our initial internal funding rate were used.
In order to satisfy our payment obligations under the Notes, we may
choose to enter into certain hedging arrangements (which may include call options, put options or other derivatives) with RBCCM and/or
one of our other subsidiaries. The terms of these hedging arrangements take into account a number of factors, including our creditworthiness,
interest rate movements, volatility and the tenor of the Notes. The economic terms of the Notes and the initial estimated value depend
in part on the terms of these hedging arrangements.
See “Key Risks—Risks Relating to the Initial Estimated Value
of the Notes and the Secondary Market for the Notes—The Initial Estimated Value of the Notes Will Be Less Than the Public Offering
Price” above.
Royal Bank (PK) (USOTC:RYBPF)
過去 株価チャート
から 6 2024 まで 7 2024
Royal Bank (PK) (USOTC:RYBPF)
過去 株価チャート
から 7 2023 まで 7 2024
