Formulario 424B2 BANCO REAL DE CANADÁ
Archivado de conformidad con la Regla 424 (b) (2)
Declaración de registro No. 333-227001
Royal Bank of Canada
Apalancamiento apalancado MSCI EAFE® Notas indexadas, con vencimiento el 23 de mayo de 2022
Las notas no tendrán interés. El monto que se le pagará en sus pagarés en la fecha de vencimiento establecida (23 de mayo de 2022,
sujeto a ajustes) se basa en el rendimiento de MSCI EAFE® Índice (al que nos referimos como "subyacente") medido desde la fecha de negociación (19 de diciembre de 2019) hasta la fecha de determinación (19 de mayo de 2022, inclusive)
ajustamiento). Si el nivel de subyacente final en la fecha de determinación es mayor que el nivel de subyacente inicial (2023.57, que era el nivel de cierre del subyacente en la fecha de negociación), el rendimiento de sus notas será positivo, sujeto a la
monto máximo de liquidación ($ 1,326.40 por cada monto de capital de $ 1,000 de las notas). Si el nivel de subyacente final es menor que el nivel de subyacente inicial pero mayor o igual que el nivel de búfer del 85.00% del nivel de subyacente inicial, usted
recibirá el monto principal de sus notas. Si el nivel subyacente final es menor que el nivel del búfer, el rendimiento de sus notas será negativo. Podría perder toda su inversión en las notas.
Para determinar su pago al vencimiento, calcularemos el rendimiento subyacente, que es el porcentaje de aumento o disminución en el nivel subyacente final a partir del
nivel inicial subyacente. En la fecha de vencimiento establecida, por cada monto de capital de $ 1,000 de sus notas, recibirá un monto en efectivo igual a:
si el retorno subyacente es positivo (el nivel subyacente final es mas grande que el nivel subyacente inicial), el suma
si el retorno subyacente es cero o negativo pero no debajo -15% (el nivel final subyacente es igual o menor que el nivel subyacente inicial pero no más del 15%), $ 1,000; o
si el retorno subyacente es negativo y es abajo -15% (el nivel final subyacente es menos que la inicial
Nuestro valor estimado de las notas a la fecha de este suplemento de precios es de $ 994.78 por cada $ 1,000 en monto de capital, que es menor que el precio de emisión original.
El valor real de las notas en cualquier momento reflejará muchos factores, no se puede predecir con precisión y puede ser inferior a esta cantidad. Describimos nuestra determinación del valor estimado inicial con más detalle a continuación.
Su inversión en las notas implica ciertos riesgos, que incluyen, entre otras cosas, nuestro riesgo de crédito. Consulte la sección "Factores de riesgo adicionales
Específico para sus notas "que comienza en la página PS-7 de este suplemento de precios.
Lo anterior es solo un breve resumen de los términos de sus notas. Debe leer la divulgación adicional provista en este suplemento de precios para poder
Comprenda mejor los términos y riesgos de su inversión.
Fecha de emisión original:
27 de diciembre de 2019
Precio de emisión original:
100.00% del monto principal
Descuento de suscripción:
0.00% del monto principal
Ingresos netos al emisor:
100.00% del monto principal
Consulte “Plan de distribución suplementario (conflictos de intereses)” en la página PS-20 de este suplemento de precios.
El precio de emisión, el descuento de suscripción y los ingresos netos mencionados anteriormente se relacionan con las notas que vendemos inicialmente. Podemos decidir vender notas adicionales después de la fecha de este precio
suplemento, a precios de emisión y con descuentos de suscripción y ganancias netas que difieren de los montos establecidos anteriormente. El rendimiento (ya sea positivo o negativo) de su inversión en los pagarés dependerá en parte del precio de emisión que pague
Ni la Comisión de Bolsa y Valores ni ningún otro organismo regulador ha aprobado o desaprobado las notas ni ha pasado la exactitud o adecuación de
este suplemento de precios, el suplemento del prospecto del producto que lo acompaña, el suplemento del prospecto que lo acompaña o el prospecto que lo acompaña. Cualquier representación en contrario es un delito penal. Las notas no constituirán depósitos que sean
asegurado por la Corporación de Seguros de Depósitos de Canadá, la Corporación Federal de Seguros de Depósitos de EE. UU. o cualquier otra agencia o entidad gubernamental canadiense o estadounidense. Las notas no están sujetas a conversión en nuestras acciones ordinarias en la subsección
39.2 (2.3) de la Ley de la Corporación de Seguros de Depósitos de Canadá.
RBC Capital Markets, LLC
Suplemento de precios con fecha 19 de diciembre de 2019.
La siguiente tabla y tabla se proporcionan solo con fines ilustrativos. No deben tomarse como una indicación o predicción de los resultados de inversión futuros y están destinados
simplemente para ilustrar el impacto que varios niveles hipotéticos subyacentes finales en la fecha de determinación podrían tener sobre el monto de liquidación en efectivo al vencimiento, suponiendo que todas las demás variables permanezcan constantes.
Los ejemplos a continuación se basan en un rango de niveles subyacentes finales que son completamente hipotéticos. Nadie puede predecir cuál será el nivel subyacente en ningún día durante el período de
sus notas, y nadie puede predecir cuál será el nivel final subyacente. El subyacente ha sido muy volátil en el pasado, lo que significa que el nivel subyacente ha cambiado considerablemente en períodos relativamente cortos, y su rendimiento no puede ser
previsto para cualquier período futuro.
La información en los siguientes ejemplos refleja tasas de rendimiento hipotéticas en las notas, suponiendo que se compren en la fecha de emisión original con un capital de $ 1,000
importe y se mantienen hasta su vencimiento. Si vende sus notas en cualquier mercado secundario antes de su vencimiento, su rendimiento dependerá del valor de mercado de sus notas en el momento de la venta, que puede verse afectado por una serie de factores que no se reflejan en
la tabla a continuación, como las tasas de interés y la volatilidad del subyacente. Además, suponiendo que no haya cambios en las condiciones del mercado o nuestra solvencia crediticia y otros factores relevantes, el valor de sus notas en la fecha de negociación (según lo determinado por
la referencia a los modelos de precios utilizados por RBCCM y teniendo en cuenta nuestros diferenciales de crédito) es, y el precio que puede recibir por sus notas puede ser, significativamente menor que el monto del principal. Para obtener más información sobre el valor de sus notas en el
en el mercado secundario, consulte "Factores de riesgo adicionales específicos de sus pagarés: el precio, si corresponde, en el que puede vender sus pagarés antes del vencimiento puede ser inferior al precio de emisión original y nuestro valor estimado inicial" a continuación. La información
en la tabla también refleja los términos y supuestos clave en el cuadro a continuación.
Términos clave y supuestos
Tasa de participación al revés
Nivel de tapa
119.20% del nivel inicial subyacente
Monto máximo de liquidación
Nivel de amortiguación
85.00% del nivel subyacente inicial
Tasa de amortiguación
, lo que equivale aproximadamente a 117.65%
Cantidad de amortiguación
Ni un evento de interrupción del mercado ni un día sin negociación ocurre en la fecha de determinación programada originalmente
Ningún cambio afecta el método por el cual el patrocinador subyacente calcula el subyacente
Notas compradas en la fecha de emisión original a un precio igual al monto del principal y mantenidas hasta la fecha de vencimiento establecida
El rendimiento real del subyacente durante el plazo de sus notas, así como el monto pagadero al vencimiento, si corresponde, pueden tener poca relación con los ejemplos hipotéticos que se muestran a continuación.
o a los niveles subyacentes históricos que se muestran en otra parte de este suplemento de precios. Para obtener información sobre los niveles históricos del subyacente durante los períodos recientes, consulte "El subyacente: rendimiento histórico del subyacente" a continuación. Antes de invertir
en las notas, debe consultar información disponible públicamente para determinar los niveles del subyacente entre la fecha de este suplemento de precios y la fecha de compra de las notas.
Además, los ejemplos hipotéticos que se muestran a continuación no tienen en cuenta los efectos de los impuestos aplicables. Debido al tratamiento fiscal de los EE. UU. Aplicable a sus pagarés, obligaciones fiscales
podría afectar la tasa de rendimiento después de impuestos en sus pagarés en un grado comparativamente mayor que el rendimiento después de impuestos sobre las acciones incluidas en el subyacente (las "acciones subyacentes").
Los niveles en la columna izquierda de la tabla a continuación representan hipotéticos niveles finales subyacentes y se expresan como porcentajes del nivel inicial subyacente. Las cantidades en la columna derecha representan
los montos hipotéticos de liquidación de efectivo, basados en el nivel hipotético final subyacente correspondiente (expresado como un porcentaje del nivel subyacente inicial), y se expresan como porcentajes del monto principal de una nota (redondeado al
la milésima parte de un por ciento más cercano). Por lo tanto, un monto hipotético de liquidación en efectivo de 100.000% significa que el valor del pago en efectivo que entregaríamos por cada monto de capital de $ 1,000 de las notas al vencimiento sería igual al monto de capital de
una nota, basada en el correspondiente nivel de subyacente hipotético final (expresado como un porcentaje del nivel de subyacente inicial) y los supuestos mencionados anteriormente.
Nivel hipotético final subyacente (como porcentaje de
el nivel subyacente inicial)
Monto hipotético de liquidación de efectivo (como porcentaje
de la cantidad principal)
Si, por ejemplo, se determina que el nivel de subyacente final es el 25,000% del nivel de subyacente inicial, el monto de liquidación en efectivo que entregaríamos en sus pagarés al vencimiento
sea aproximadamente el 29.412% del monto principal de sus pagarés, como se muestra en la columna del monto hipotético de liquidación en efectivo de la tabla anterior. Como resultado, si compró sus pagarés al monto principal en la fecha de liquidación y los retuvo en
vencimiento, perdería aproximadamente el 70.588% de su inversión.
Si se determinara que el nivel de subyacente final es 160,000% del nivel de subyacente inicial, el monto de liquidación en efectivo que entregaríamos en sus pagarés al vencimiento se limitaría al máximo
monto de liquidación (expresado como un porcentaje del monto principal), o 132.640% del monto principal de sus pagarés, como se muestra en la columna de monto hipotético de liquidación en efectivo de la tabla anterior. Como resultado, si compró sus notas en el
monto principal en la fecha de liquidación y los mantuvo hasta su vencimiento, no se beneficiaría de ningún aumento en el nivel de subyacente final por encima del 119.200% del nivel de subyacente inicial.
El siguiente cuadro también ilustra los montos hipotéticos de liquidación de efectivo (expresados como un porcentaje del monto principal de sus pagarés) que pagaríamos en sus pagarés en el
fecha de vencimiento establecida, si el nivel subyacente final (expresado como un porcentaje del nivel subyacente inicial) fuera cualquiera de los niveles hipotéticos mostrados en el eje horizontal. El gráfico muestra que cualquier hipotético nivel final subyacente (expresado como
un porcentaje del nivel subyacente inicial) menor que el nivel de amortiguación resultaría en un monto hipotético de liquidación de efectivo de menos del 100.00% del monto principal de sus notas (la sección debajo del marcador 100.00% en el eje vertical)
y, en consecuencia, en una pérdida de capital para el titular de los pagarés. Por otro lado, cualquier nivel hipotético final subyacente que sea mayor que el nivel inicial subyacente (la sección derecha del marcador 100.00% en el eje horizontal)
resultará en un monto hipotético de liquidación en efectivo que es mayor al 100.00% del monto principal de sus pagarés en forma apalancada (la sección sobre el marcador de 100.00% en el eje vertical), sujeto al monto máximo de liquidación.
■ La nota de rendimiento
|■ El rendimiento subyacente|
Nadie puede predecir el nivel subyacente final. El monto real que recibirá un tenedor de los bonos al vencimiento y el retorno real de su inversión en el
las notas, si las hay, dependerán del nivel real subyacente final, que será determinado por el agente de cálculo como se describe a continuación. Además, el rendimiento real de sus notas dependerá aún más del precio de emisión original. Además, el
Los supuestos en los que se basan la tabla y el gráfico hipotéticos pueden resultar inexactos. En consecuencia, el rendimiento de su inversión en los pagarés, si corresponde, y el monto real de liquidación en efectivo a pagar con respecto a los pagarés al vencimiento pueden
ser muy diferente de la información reflejada en la tabla y el cuadro de arriba.
FACTORES DE RIESGO ADICIONALES ESPECÍFICOS PARA SUS NOTAS
Una inversión en sus pagarés está sujeta a los riesgos que se describen a continuación, así como a los riesgos que se describen en "Factores de riesgo" que comienzan en la página S-1 del suplemento del folleto adjunto y
Puede perder toda su inversión en las notas
El monto principal de su inversión no está protegido y puede perder una cantidad significativa, o incluso toda su inversión en las notas. La liquidación en efectivo
el monto, si corresponde, dependerá del desempeño del subyacente y el cambio en el nivel del subyacente desde la fecha de negociación hasta la fecha de determinación, y usted puede recibir una cantidad significativamente menor que el monto principal de los pagarés. Sujeto a nuestro
riesgo de crédito, recibirá al menos el monto principal de los pagarés al vencimiento solo si el nivel subyacente final es mayor o igual que el nivel de amortiguación. Si el nivel subyacente final es menor que el nivel del búfer, perderá, por
cada $ 1,000 en la cantidad principal de las notas, una cantidad igual al producto de (i) la tasa de amortiguación veces (ii) la suma de retorno subyacente más la cantidad de amortiguación veces (iii) $ 1,000. Podría perder parte o la totalidad del monto principal. Por lo tanto, dependiendo del nivel final subyacente, podría perder una parte sustancial y
quizás la totalidad de su inversión en los pagarés, que incluiría cualquier prima sobre el monto del capital que haya pagado cuando compró los pagarés.
Además, si las notas no se retienen hasta el vencimiento, suponiendo que no haya cambios en las condiciones del mercado o en nuestra solvencia y otros factores relevantes, el precio
puede recibir por las notas puede ser significativamente menor que el precio que pagó por ellas.
Nuestro valor estimado inicial de las notas es menor que el precio de emisión original
Nuestro valor estimado inicial que se establece en la portada de este documento es menor que el precio de emisión original de las notas. No representa un mínimo
precio al que nosotros, RBCCM o cualquiera de nuestros otros afiliados estaríamos dispuestos a comprar los pagarés en cualquier mercado secundario (si existe alguno) en cualquier momento. Esto se debe, entre otras cosas, al hecho de que el precio de emisión original de las notas refleja el
tasa de endeudamiento que pagamos para emitir valores de este tipo (una tasa de financiación interna que es inferior a la tasa a la que prestamos fondos mediante la emisión de deuda a tasa fija convencional) y la inclusión en el precio de emisión original de los costos relacionados con nuestro
cobertura de las notas.
El precio, en su caso, al que puede vender sus notas antes del vencimiento puede ser inferior al precio de emisión original y nuestro valor estimado inicial
Suponiendo que no haya cambios en las condiciones del mercado ni en ningún otro factor relevante, el precio, si lo hay, al cual puede vender sus notas antes del vencimiento puede ser menor
que el precio de emisión original y nuestro valor estimado inicial. Esto se debe a que no se espera que dicho precio de venta incluya nuestra ganancia estimada y los costos relacionados con nuestra cobertura de los pagarés. Además, cualquier precio al que pueda vender
Es probable que las notas reflejen los diferenciales habituales de oferta y demanda para operaciones similares y el costo de deshacer cualquier transacción de cobertura relacionada. Además, se espera que el valor de las notas determinado para cualquier precio del mercado secundario se base en parte en
el rendimiento que se refleja en la tasa de interés de nuestros títulos de deuda convencionales de vencimiento similar que se negocian en el mercado secundario, en lugar de la tasa de financiación interna que usamos para fijar el precio de los pagarés y determinar el valor inicial
valor estimado. Como resultado, el precio del mercado secundario de los bonos será menor que si se utilizara la tasa de financiación interna. Estos factores, junto con varios factores crediticios, de mercado y económicos durante el plazo de las notas y, potencialmente,
Se espera que los cambios en el nivel del subyacente reduzcan el precio al que puede vender los pagarés en cualquier mercado secundario y afectarán el valor de los pagarés de formas complejas e impredecibles.
Como se establece a continuación en la sección "Plan de distribución suplementario (conflictos de intereses)", por un período de tiempo limitado después de la fecha de negociación, su corredor puede
recompra las notas a un precio que sea mayor que el valor estimado de las notas en ese momento. Sin embargo, suponiendo que no haya cambios en ningún otro factor relevante, se espera que el precio que reciba si vende sus notas disminuya gradualmente durante
Las notas no están diseñadas para ser instrumentos comerciales a corto plazo. En consecuencia, debe ser capaz y estar dispuesto a mantener sus notas hasta la madurez.
El valor estimado inicial de las notas es solo una estimación, calculada en el momento en que se establecieron los términos de las notas
Nuestro valor estimado inicial de los pagarés se basa en el valor de nuestra obligación de realizar los pagos en los pagarés, junto con el valor medio de mercado de los bonos.
derivado incrustado en los términos de las notas. Consulte "Estructuración de las notas" a continuación. Nuestra estimación se basa en una variedad de supuestos, incluida nuestra tasa de financiación interna (que representa un descuento de nuestros diferenciales de crédito), expectativas en cuanto a
dividendos de las acciones subyacentes, tasas de interés y volatilidad, y el plazo esperado de las notas. Estas suposiciones se basan en ciertos pronósticos sobre eventos futuros, que pueden resultar incorrectos. Otras entidades pueden valorar las notas o similares
valores a un precio significativamente diferente al nuestro.
El valor de las notas en cualquier momento después de la fecha de negociación variará en función de muchos factores, incluidos los cambios en las condiciones del mercado, y no se puede predecir con precisión. Como resultado,
se debe esperar que el valor real que recibiría si vendiera los pagarés en cualquier mercado secundario, si lo hubiera, difiere materialmente de nuestro valor estimado inicial de sus pagarés.
Sus notas no generarán interés
No recibirá ningún pago de intereses en las notas. Incluso si el monto pagadero en los pagarés al vencimiento excede el monto principal de los pagarés, el total
el rendimiento que gana en los pagarés puede ser menor de lo que hubiera ganado invirtiendo en una garantía de deuda no indexada de vencimiento comparable que devengue intereses a una tasa de mercado prevaleciente. Su inversión puede no reflejar la oportunidad completa
le cuesta cuando tiene en cuenta los factores que afectan el valor temporal del dinero.
El potencial para que el valor de sus notas aumente será limitado
Su capacidad para participar en cualquier cambio en el nivel del subyacente durante el término de sus notas será limitada debido al nivel de límite. El nivel de límite será
limite la cantidad en efectivo que puede recibir por cada una de sus notas al vencimiento, sin importar cuánto pueda aumentar el nivel del subyacente más allá del nivel de límite durante el plazo de sus notas. En consecuencia, el monto pagadero por cada una de sus notas puede ser
significativamente menos que su rendimiento si hubiera invertido directamente en las acciones subyacentes.
El pago del monto a pagar en sus pagarés está sujeto a nuestro riesgo de crédito, y las percepciones del mercado sobre nuestra solvencia pueden afectar negativamente el valor de mercado
de sus notas
Las notas son nuestras obligaciones de deuda no garantizadas. Los inversores están sujetos a nuestro riesgo crediticio y las percepciones del mercado sobre nuestra solvencia pueden afectar negativamente
Valor de mercado de las notas. Es probable que cualquier disminución en la visión del mercado o la confianza en nuestra calidad crediticia afecte negativamente el valor de mercado de los pagarés.
El monto a pagar en sus notas no está vinculado al nivel del subyacente en ningún momento que no sea la fecha de determinación
El monto a pagar en sus notas se basará en el nivel de subyacente final. Por lo tanto, por ejemplo, si el nivel de cierre del subyacente disminuye precipitadamente en
En la fecha de determinación, el monto a pagar al vencimiento puede ser significativamente menor de lo que hubiera sido si se hubiera vinculado el monto a pagar al nivel de cierre del subyacente antes de esa disminución. Aunque el nivel real de la
El subyacente al vencimiento o en otros momentos durante el plazo de las notas puede ser superior al nivel final subyacente, no se beneficiará del nivel de cierre del subyacente en ningún momento que no sea la fecha de determinación.
Las notas pueden no tener un mercado de negociación activo
Las notas no se incluirán en ningún intercambio de valores. El concesionario tiene la intención de ofrecer comprar las notas en el mercado secundario, pero no está obligado a hacerlo. los
dealer or any of its affiliates may stop any market-making activities at any time. Even if there is a secondary market, it may not provide enough liquidity to allow you to easily trade or sell the notes. Because other dealers are not likely to make a
secondary market for the notes, the price at which you may be able to trade the notes is likely to depend on the price, if any, at which the dealer is willing to buy the notes. We expect that transaction costs in any secondary market would be high.
As a result, the difference between bid and asked 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
The Market Value of Your Notes May Be Influenced by Many Unpredictable Factors
The following factors, among others, many of which are beyond our control, may influence the market value of your notes:
the level of the underlier;
the volatility—i.e., the frequency and magnitude of changes—of the level of the underlier;
the dividend rates of the underlier stocks;
economic, financial, regulatory, political, military and other events that affect stock markets generally and the underlier stocks;
interest and yield rates in the market;
the time remaining until the notes mature; y
our creditworthiness, whether actual or perceived, and including actual or anticipated upgrades or downgrades in our credit ratings or changes in other credit measures.
These factors may influence the market value of your notes if you sell your notes before maturity, including the price you may receive for your notes in any market
making transaction. If you sell your notes prior to maturity, you may receive less than the principal amount of your notes.
An Investment in the Notes Is Subject to Risks Associated with Foreign Securities Markets
The underlier tracks the value of certain foreign equity securities. The underlier consists of twenty-one developed equity market country indices, which are in turn comprised of the
stocks traded in the equity markets of such countries. You should be aware that investments in securities linked to the value of foreign equity securities involve particular risks. The foreign securities markets comprising the underlier may have less
liquidity and may be more volatile than U.S. or other securities markets and market developments may affect foreign markets differently from U.S. or other securities markets. Direct or indirect government intervention to stabilize these foreign
securities markets, as well as cross-shareholdings in foreign companies, may affect trading prices and volumes in these markets. Also, there is generally less publicly available information about foreign companies than about those U.S. companies that
are subject to the reporting requirements of the U.S. Securities and Exchange Commission, and foreign companies are subject to accounting, auditing and financial reporting standards and requirements that differ from those applicable to U.S. reporting
Prices of securities in foreign countries are subject to political, economic, financial and social factors that apply in those geographical regions. These factors,
which could negatively affect those securities markets, include the possibility of recent or future changes in a foreign government’s economic and fiscal policies, the possible imposition of, or changes in, currency exchange laws or other laws or
restrictions applicable to foreign companies or investments in foreign equity securities and the possibility of fluctuations in the rate of exchange between currencies, the possibility of outbreaks of hostility and political instability and the
possibility of natural disaster or adverse public health development in the region. Moreover, foreign economies may differ favorably or unfavorably from the U.S. economy in important respects such as growth of gross national product, rate of
inflation, capital reinvestment, resources and self-sufficiency.
The Notes Are Linked to the Index, and Are Therefore Subject to Foreign Currency Exchange Rate Risk
The payment amount on the notes will be calculated based on the underlier, and the prices of the underlier stocks are converted into U.S. dollars for purposes of
calculating the level of the underlier. As a result, investors in the notes will be exposed to currency exchange rate risk with respect to each of the currencies represented by the underlier. An investor’s net exposure will depend on the extent to
which the currencies represented by the underlier strengthen or weaken against the U.S. dollar and the relative weight of each relevant currency represented by the underlier. If, taking into account such weight, the dollar strengthens against such
currencies, the level of the underlier will be adversely affected and the amount payable, if any, at maturity of the notes may be reduced.
Foreign currency exchange rates vary over time, and may vary considerably during the life of the notes. Changes in a particular exchange rate result from the
interaction of many factors directly or indirectly affecting economic and political conditions.
Of particular importance are:
existing and expected rates of inflation;
existing and expected interest rate levels;
the balance of payments;
the extent of governmental surpluses or deficits in the relevant countries; y
other financial, economic, military and political factors.
All of these factors are, in turn, sensitive to the monetary, fiscal and trade policies pursued by the governments of the various component countries and the United
States and other countries important to international trade and finance.
It has been reported that the U.K. Financial Conduct Authority and regulators from other countries are in the process of investigating the potential manipulation of
published currency exchange rates. If such manipulation has occurred or is continuing, certain published exchange rates may have been, or may be in the future, artificially lower (or higher) than they would otherwise have been. Any such manipulation
could have an adverse impact on any payments on, and the value of, your notes and the trading market for your notes. In addition, we cannot predict whether any changes or reforms affecting the determination or publication of exchange rates or the
supervision of currency trading will be implemented in connection with these investigations. Any such changes or reforms could also adversely impact your notes.
If the Level or Price of the Underlier or the Underlier Stocks Changes, the Market Value of the Notes May Not Change in the Same Manner
The notes may trade quite differently from the performance of the underlier or the underlier stocks. Changes in the level or price, as applicable, of the underlier
or the underlier stocks may not result in a comparable change in the market value of the notes. Some of the reasons for this disparity are discussed under “— The Market Value of Your Notes May Be Influenced by Many Unpredictable Factors” above.
The Return on the Notes Will Not Reflect Any Dividends Paid on the Underlier Stocks
The underlier sponsor calculates the levels of the underlier by reference to the prices of the underlier stocks without taking account of the value of dividends paid
on those underlier stocks. Therefore, the return on the notes will not reflect the return you would realize if you actually owned the underlier stocks and received the dividends paid on those underlier stocks.
You Have No Shareholder Rights or Rights to Receive Any Underlier Stock
Investing in your notes will not make you a holder of any of the underlier stocks. Neither you nor any other holder or owner of your notes will have any voting
rights, any right to receive dividends or other distributions, any rights to make a claim against the underlier stock issuers or any other rights with respect to the underlier stocks. Your notes will be paid in cash to the extent any amount is
payable at maturity, and you will have no right to receive delivery of any of the underlier stocks.
We Will Not Hold Any of the Underlier Stocks for Your Benefit, if We Hold Them at All
The indenture and the terms governing your notes do not contain any restriction on our ability or the ability of any of our affiliates to sell, pledge or otherwise
convey all or any portion of the underlier stocks that we or they may acquire. Neither we nor our affiliates will pledge or otherwise hold any assets for your benefit, including any of these securities. Consequently, in the event of our bankruptcy,
insolvency or liquidation, any of those securities that we own will be subject to the claims of our creditors generally and will not be available for your benefit specifically.
Our Hedging Activities and/or Those of Our Distributors May Negatively Impact Investors in the Notes and Cause Our Interests and Those of Our Clients and
Counterparties to Be Contrary to Those of Investors in the Notes
The dealer or one or more of our other affiliates and/or distributors has hedged or expects to hedge its obligations under the hedging transaction that it may enter into with us by
purchasing futures and/or other instruments linked to the underlier or the underlier stocks. The dealer or one or more of our other affiliates and/or distributors also expects to adjust the hedge by,
among other things, purchasing or selling any of the foregoing, and perhaps other instruments linked to the underlier or one or more of the underlier stocks, at any
time and from time to time, and to unwind the hedge by selling any of the foregoing on or before the determination date.
We, the dealer, or one or more of our other affiliates and/or distributors may also enter into, adjust and unwind hedging transactions relating to other basket- or
index-linked notes whose returns are linked to changes in the level or price of the underlier or the underlier stocks. Any of these hedging activities may adversely affect the level of the underlier —directly or indirectly by affecting the price of
the underlier stocks—and therefore the market value of the notes and the amount you will receive, if any, on the notes. In addition, you should expect that these transactions will cause us, the dealer or our other affiliates and/or distributors, or
our clients or counterparties, to have economic interests and incentives that do not align with, and that may be directly contrary to, those of an investor in the notes. We, the dealer and our other affiliates and/or distributors will have no
obligation to take, refrain from taking or cease taking any action with respect to these transactions based on the potential effect on an investor in the notes, and may receive substantial returns with respect to these hedging activities while the
value of the notes may decline. Additionally, if the distributor from which you purchase notes is to conduct hedging activities for us in connection with the notes, that distributor may profit in connection with such hedging activities and such
profit, if any, will be in addition to the compensation that the distributor receives for the sale of the notes to you. You should be aware that the potential to earn fees in connection with hedging activities may create a further incentive for the
distributor to sell the notes to you in addition to the compensation they would receive for the sale of the notes.
Market Activities by Us and by the Dealer for Our Own Account or for Our Clients Could Negatively Impact Investors in the Notes
We, the dealer and our other affiliates provide a wide range of financial services to a substantial and diversified client base. As such, we each may act as an
investor, investment banker, research provider, investment manager, investment advisor, market maker, trader, prime broker or lender. In those and other capacities, we, the dealer and/or our other affiliates purchase, sell or hold a broad array of
investments, actively trade securities (including the notes or other securities that we have issued), the underlier stocks, derivatives, loans, credit default swaps, indices, baskets and other financial instruments and products for our own accounts
or for the accounts of our customers, and we will have other direct or indirect interests, in those securities and in other markets that may be not be consistent with your interests and may adversely affect the level of the underlier and/or the value
of the notes. Any of these financial market activities may, individually or in the aggregate, have an adverse effect on the level of the underlier and the market value of your notes, and you should expect that our interests and those of the dealer
and/or our other affiliates, or our clients or counterparties, will at times be adverse to those of investors in the notes.
In addition to entering into these transactions itself, we, the dealer and our other affiliates may structure these transactions for our clients or counterparties,
or otherwise advise or assist clients or counterparties in entering into these transactions. These activities may be undertaken to achieve a variety of objectives, including: permitting other purchasers of the notes or other securities to hedge their
investment in whole or in part; facilitating transactions for other clients or counterparties that may have business objectives or investment strategies that are inconsistent with or contrary to those of investors in the notes; hedging the exposure
of us, the dealer or our other affiliates in connection with the notes, through their market-making activities, as a swap counterparty or otherwise; enabling us, the dealer or our other affiliates to comply with internal risk limits or otherwise
manage firmwide, business unit or product risk; and/or enabling us, the dealer or our other affiliates to take directional views as to relevant markets on behalf of itself or our clients or counterparties that are inconsistent with or contrary to the
views and objectives of investors in the notes.
We, the dealer and our other affiliates regularly offer a wide array of securities, financial instruments and other products into the marketplace, including existing
or new products that are similar to the notes or other securities that we may issue, the underlier stocks or other securities or instruments similar to or linked to the foregoing. Investors in the notes should expect that we, the dealer and our other
affiliates will offer securities, financial instruments, and other products that may compete with the notes for liquidity or otherwise.
We, the Dealer and Our Other Affiliates Regularly Provide Services to, or Otherwise Have Business Relationships with, a Broad Client Base, Which Has Included and
May Include Us and the Issuers of the Underlier Stocks
We, the dealer and our other affiliates regularly provide financial advisory, investment advisory and transactional services to a substantial and diversified client
base. You should assume that we or they will, at present or in the future, provide such services or otherwise engage in transactions with, among others, us and the issuers of the underlier stocks, or transact in securities or instruments or with
parties that are directly or indirectly related to these entities. These services could include making loans to or equity investments in those companies, providing financial advisory or other investment banking services, or issuing research reports.
You should expect that we, the dealer and our other affiliates, in providing these services, engaging in such transactions, or acting for our own accounts, may take actions that have direct or indirect effects on the notes or other securities that we
may issue, the underlier stocks or other securities or instruments similar to or linked to the foregoing, and that such actions could be adverse to the interests of investors in the notes. In addition, in connection with these activities, certain
personnel within us, the dealer or our other affiliates may have access to confidential material non-public information about these parties that would not be disclosed to investors of the notes.
Past Underlier Performance Is No Guide to Future Performance
The actual performance of the underlier over the term of the notes may bear little relation to the historical levels of the underlier. Likewise, the amount payable at maturity may
bear little relationship to the hypothetical return table or chart set forth elsewhere in this pricing supplement. We cannot predict the future performance of the underlier. Trading activities undertaken by market participants, including certain
investors in the notes or their affiliates, including in short positions and derivative positions, may adversely affect the level of the underlier.
As the Calculation Agent, RBCCM Will Have the Authority to Make Determinations that Could Affect the Amount You Receive, if Any, at Maturity
As the calculation agent for the notes, RBCCM will have discretion in making various determinations that affect the notes, including determining the final underlier
level, which will be used to determine the cash settlement amount at maturity, and determining whether to postpone the determination date because of a market disruption event or because that day is not a trading day. The calculation agent also has
discretion in making certain adjustments relating to a discontinuation or modification of the underlier, as described under “General Terms of the Notes—Unavailability of the Level of the Underlier” on page PS-6 of the accompanying product prospectus
supplement PB-1. The exercise of this discretion by RBCCM, which is our wholly owned subsidiary, could adversely affect the value of the notes and may create a conflict of interest between you and RBCCM. For a description of market disruption events
as well as the consequences of the market disruption events, see the section entitled “General Terms of the Notes—Market Disruption Events” beginning on page PS-7 of the accompanying product prospectus supplement PB-1. We may change the calculation
agent at any time without notice, and RBCCM may resign as calculation agent at any time.
The Policies of the Underlier Sponsor and Changes that Affect the Underlier or the Underlier Stocks Could Affect the Amount Payable on the Notes, if Any, and Their
The policies of the underlier sponsor concerning the calculation of the levels of the underlier, additions, deletions or substitutions of the underlier stocks and
the manner in which changes affecting such underlier stocks or their issuers, such as stock dividends, reorganizations or mergers, are reflected in the level of the underlier, could affect the levels of the underlier and, therefore, the amount
payable on the notes, if any, at maturity and the market value of the notes prior to maturity. The amount payable on the notes, if any, and their market value could also be affected if the underlier sponsor changes these policies, for example, by
changing the manner in which it calculates the level of the underlier, or if the underlier sponsor discontinues or suspends calculation or publication of the level of the underlier, in which case it may become difficult to determine the market value
of the notes. If events such as these occur, the calculation agent will determine the amount payable, if any, at maturity as described herein.
The Calculation Agent Can Postpone the Determination of the Final Underlier Level if a Market Disruption Event Occurs or Is Continuing
The determination of the final underlier level may be postponed if the calculation agent determines that a market disruption event has occurred or is continuing on
the determination date with respect to the underlier. If such a postponement occurs, the calculation agent will use the closing level of the underlier on the first subsequent trading day on which no market disruption event occurs or is continuing,
subject to the limitations set forth in the accompanying product prospectus supplement PB-1. If a market disruption event occurs or is continuing on a determination date, the stated maturity date for the notes could also be postponed.
If the determination of the level of the underlier for any determination date is postponed to the last possible day, but a market disruption event occurs or is
continuing on that day, that day will nevertheless be the date on which the level of the underlier will be determined by the calculation agent. In such an event, the calculation agent will make a good faith estimate in its sole discretion of the
level that would have prevailed in the absence of the market disruption event. See “General Terms of the Notes—Market Disruption Events” in the accompanying product prospectus supplement PB-1.
There Is No Affiliation Between Any Underlier Stock Issuers or the Underlier Sponsor and Us or the Dealer, and Neither We Nor the Dealer Is Responsible for Any
Disclosure by Any of the Underlier Stock Issuers or the Underlier Sponsor
We are not affiliated with the issuers of the underlier stocks or with the underlier sponsor. As discussed herein, however, we, the dealer, and our other affiliates
may currently, or from time to time in the future, engage in business with the issuers of the underlier stocks. Nevertheless, none of us, the dealer, or our respective affiliates assumes any responsibility for the accuracy or the completeness of any
information about the underlier or any of the underlier stocks. You, as an investor in the notes, should make your own investigation into the underlier and the underlier stocks. See the section below entitled “The Underlier” for additional
information about the underlier.
Neither the underlier sponsor nor any issuers of the underlier stocks are involved in this offering of the notes in any way, and none of them have any obligation of
any sort with respect to the notes. Thus, neither the underlier sponsor nor any of the issuers of the underlier stocks have any obligation to take your interests into consideration for any reason, including in taking any corporate actions that might
affect the value of the notes.
You Must Rely on Your Own Evaluation of the Merits of an Investment Linked to the Underlier
In the ordinary course of business, we, the dealer, our other affiliates and any additional dealers, including in acting as a research provider, investment advisor,
market maker, principal investor or distributor, may express research or investment views on expected movements in the underlier or the underlier stocks, and may do so in the future. These views or reports may be communicated to our clients, clients
of our affiliates and clients of any additional dealers, and may be inconsistent with, or adverse to, the objectives of investors in the notes. However, these views are subject to change from time to time. Moreover, other professionals who transact
business in markets relating to the underlier or the underlier stocks may at any time have significantly different views from those of these entities. For these reasons, you are encouraged to derive information concerning the underlier or the
underlier stocks from multiple sources, and you should not rely solely on views expressed by us, the dealer, our other affiliates, or any additional dealers.
We May Sell an Additional Aggregate Amount of the Notes at a Different Original Issue Price
At our sole option, we may decide to sell an additional aggregate amount of the notes subsequent to the trade date. The price of the notes in the subsequent sale may differ
substantially (higher or lower) from the principal amount.
If the Original Issue Price for Your Notes Represents a Premium to the Principal Amount, the Return on Your Notes Will Be Lower Than the Return on Notes for Which
the Original Issue Price Is Equal to the Principal Amount or Represents a Discount to the Principal Amount
The cash settlement amount will not be adjusted based on the original issue price. If the original issue price for your notes differs from the principal amount, the
return on your notes held to maturity will differ from, and may be substantially less than, the return on notes for which the original issue price is equal to the principal amount. If the original issue price for your notes represents a premium to
the principal amount and you hold them to maturity, the return on your notes will be lower than the return on notes for which the original issue price is equal to the principal amount or represents a discount to the principal amount.
In addition, the impact of the buffer level and the cap level on the return on your investment will depend upon the price you pay for your notes relative to the
principal amount. For example, if you purchase your notes at a premium to the principal amount, the cap level will only permit a lower percentage increase in your investment in the notes than would have been the case for notes purchased at the
principal amount or a discount to the principal amount. Similarly, the buffer level, while still providing some protection for the return on the notes, will allow a greater percentage decrease in your investment in the notes than would have been the
case for notes purchased at the principal amount or a discount to the principal amount.
Significant Aspects of the Income Tax Treatment of an Investment in the Notes Are Uncertain
The tax treatment of an investment in the notes is uncertain. We do not plan to request a ruling from the Internal Revenue Service or the Canada Revenue Agency
regarding the tax treatment of an investment in the notes, and the Internal Revenue Service, the Canada Revenue Agency or a court may not agree with the tax treatment described in this pricing supplement.
The Internal Revenue Service has issued a notice indicating that it and the U.S. Treasury Department are actively considering whether, among other issues, a holder
should be required to accrue interest over the term of an instrument such as the notes even though that holder will not receive any payments with respect to the notes until maturity or earlier sale or exchange and whether all or part of the gain a
holder may recognize upon sale, exchange or maturity of an instrument such as the notes could be treated as ordinary income. The outcome of this process is uncertain and could apply on a retroactive basis.
Please read carefully the section entitled “Supplemental Discussion of U.S. Federal Income Tax Consequences” in the accompanying product prospectus supplement PB-1,
the section entitled “Certain Income Tax Consequences” in the accompanying prospectus supplement and the section entitled “Tax Consequences” in the accompanying prospectus. You should consult your tax advisor about your own tax situation.
Non-U.S. Investors May Be Subject to Certain Additional Risks
The notes will be denominated in U.S. dollars. If you are a non-U.S. investor who purchases the notes with a currency other than U.S. dollars, changes in rates of
exchange may have an adverse effect on the value, price or returns of your investment.
This pricing supplement contains a general description of certain U.S. tax considerations relating to the notes. If you are a non-U.S. investor, you should consult
your tax advisors as to the consequences, under the tax laws of the country where you are resident for tax purposes, of acquiring, holding and disposing of the notes and receiving the payments that might be due under the notes.
For a discussion of certain Canadian federal income tax consequences of investing in the notes, please see the section entitled “Tax Consequences — Canadian
Taxation” in the accompanying prospectus. If you are not a Non-resident Holder (as that term is defined in “Tax Consequences — Canadian Taxation” in the accompanying prospectus) or if you acquire the notes in the secondary market, you should consult
your tax advisor as to the consequences of acquiring, holding and disposing of the notes and receiving the payments that might be due under the notes.
Certain Considerations for Insurance Companies and Employee Benefit Plans
Any insurance company or fiduciary of a pension plan or other employee benefit plan that is subject to the prohibited transaction rules of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), or the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), including an IRA or a Keogh plan (or a governmental plan to which similar prohibitions apply), and that is considering purchasing the
notes with the assets of the insurance company or the assets of such a plan, should consult with its counsel regarding whether the purchase or holding of the notes could become a “prohibited transaction” under ERISA, the Internal Revenue Code or any
substantially similar prohibition in light of the representations a purchaser or holder in any of the above categories is deemed to make by purchasing and holding the notes. This is discussed in more detail under “Employee Retirement Income Security
Act” in the accompanying product prospectus supplement PB-1.
The underlier is the MSCI EAFE® Index (Bloomberg ticker “MXEA”). All information contained in this pricing supplement regarding the underlier including, without limitation, its make-up, method
of calculation and changes in its components and its historical closing values, is derived from publicly available information prepared by the underlier sponsor. Such information reflects the policies of, and is subject to change by, the underlier
sponsor. The underlier sponsor owns the copyright and all rights to the underlier. The underlier sponsor is under no obligation to continue to publish, and may discontinue publication of, the underlier. The consequences of the underlier sponsor
discontinuing or modifying the underlier are described in the section entitled “Description of the Notes—Unavailability of the Level of the Underlier” on page PS-6 of the accompanying product prospectus supplement PB-1.
The underlier is calculated and maintained by the underlier sponsor. Neither we nor RBCCM has participated in the preparation of such documents or made any due diligence inquiry with respect to the
underlier or underlier sponsor in connection with the offering of the notes. In connection with the offering of the notes, neither we nor RBCCM makes any representation that such publicly available information regarding the underlier or underlier
sponsor is accurate or complete. Furthermore, we cannot give any assurance that all events occurring prior to the offering of the notes (including events that would affect the accuracy or completeness of the publicly available information described
in this pricing supplement) that would affect the level of the underlier or have been publicly disclosed. Subsequent disclosure of any such events could affect the value received at maturity and therefore the market value of the notes.
We, the dealer or our respective affiliates may presently or from time to time engage in business with one or more of the issuers of the underlier stocks of the underlier without regard to your
interests, including extending loans to or entering into loans with, or making equity investments in, one or more of such issuers or providing advisory services to one or more of such issuers, such as merger and acquisition advisory services. En el
course of business, we, the dealer or our respective affiliates may acquire non-public information about one or more of such issuers and none of us, the dealer or our respective affiliates undertake to disclose any such information to you. En
addition, we, the dealer or our respective affiliates from time to time have published and in the future may publish research reports with respect to such issuers. These research reports may or may not recommend that investors buy or hold the
securities of such issuers. As a prospective purchaser of the notes, you should undertake an independent investigation of the underlier or of the issuers of the underlier stocks to the extent required, in your judgment, to allow you to make an
informed decision with respect to an investment in the notes.
We are not incorporating by reference the website of the underlier sponsor or any material it includes into this pricing supplement. In this pricing supplement, unless the context requires otherwise, references to the
underlier will include any successor underlier to the underlier and references to the underlier sponsor will include any successor thereto.
MSCI EAFE® Index Weighting by Sector as of November 29, 2019*
* Percentages may not sum to 100% due to rounding. (Sector designations are determined by the underlier sponsor using criteria it has selected or developed. Index sponsors may use
very different standards for determining sector designations. In addition, many companies operate in a number of sectors, but are listed in only one sector and the basis on which that sector is selected may also differ. As a result, sector
comparisons between indices with different index sponsors may reflect differences in methodology as well as actual differences in the sector composition of the indices.) As of the close of business on September 21, 2018, S&P Dow Jones Indices LLC
and MSCI, Inc. updated the Global Industry Classification Sector structure. Among other things, the update broadened the Telecommunications Services sector and renamed it the Communication Services sector. The renamed sector includes the previously
existing Telecommunication Services Industry group, as well as the Media Industry group, which was moved from the Consumer Discretionary sector and renamed the Media & Entertainment Industry group. The Media & Entertainment Industry group
contains three industries: Media, Entertainment and Interactive Media & Services. The Media industry continues to consist of the Advertising, Broadcasting, Cable & Satellite and Publishing sub-industries. The Entertainment industry contains
the Movies & Entertainment sub-industry (which includes online entertainment streaming companies in addition to companies previously classified in such industry prior to September 21, 2018) and the Interactive Home Entertainment sub-industry
(which includes companies previously classified in the Home Entertainment Software sub-industry prior to September 21, 2018 (when the Home Entertainment Software sub-industry was a sub-industry in the Information Technology sector)), as well as
producers of interactive gaming products, including mobile gaming applications). The Interactive Media & Services industry and sub-industry includes companies engaged in content and information creation or distribution through proprietary
platforms, where revenues are derived primarily through pay-per-click advertisements, and includes search engines, social media and networking platforms, online classifieds and online review companies. The Global Industry Classification Sector
structure changes were implemented in the MSCI EAFE® Index in connection with the November 2018 semi-annual index review.
MSCI EAFE® Index Weighting by Country as of November 29, 2019*
* Percentages may not sum to 100% due to rounding.
Description of the Underlier
The MSCI EAFE® Index
The underlier is intended to measure equity market performance in developed market countries, excluding the United States and Canada. The underlier is a free float-adjusted market capitalization equity
index with a base date of December 31, 1969 and an initial value of 100. The underlier is calculated daily in U.S. dollars and published in real time every 60 seconds during market trading hours. As of December 12, 2019, the underlier consisted of
companies from the following 21 developed countries: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and
The underlier is comprised of companies in both the Large Cap Index and Mid Cap Index, as discussed in the section “—Defining Market Capitalization Size Segments for Each Market” below.
The underlier is part of the MSCI Regional Equity Indices series and is an MSCI Global Investable Market Index, which is a family within the MSCI International Equity Indices.
Constructing the MSCI Global Investable Market Indices. MSCI undertakes an index construction process, which involves:
• defining the equity universe;
• determining the market investable equity universe for each market;
• determining market capitalization size segments for each market;
• applying index continuity rules for the MSCI Standard Index;
• creating style segments within each size segment within each market; y
• classifying securities under the Global Industry Classification Standard (the “GICS”).
Defining the Equity Universe. The equity universe is defined by:
• Identifying Eligible Equity Securities: the equity universe initially looks at securities listed in any of the countries in the MSCI Global
Index Series, which will be classified as either Developed Markets (“DM”) or Emerging Markets (“EM”). All listed equity securities, including Real Estate Investment Trusts and certain income trusts in Canada, are eligible for inclusion in the equity
universo. Conversely, mutual funds, ETFs, equity derivatives, and most investment trusts, are not eligible for inclusion in the equity universe. Preferred shares that exhibit characteristics of equity
securities are eligible in the equity universe. MSCI will analyse preferred shares on a case-by-case basis. The key criterion for preferred shared eligibility is that the share should not have features that make it resemble, and behave like, a fixed
• Classifying Eligible Securities into the Appropriate Country: each company and its securities (i.e., share classes) are classified in only one
Effective with the November 2015 semi-annual index review, companies traded outside of their country of classification (i.e., “foreign listed companies”) will become eligible for
inclusion in the MSCI Country Investable Market Indexes along with the applicable MSCI Global Index. In order for a MSCI Country Investable Market Index to be eligible to include foreign listed companies, it must meet the Foreign Listing Materiality
Requirement. To meet the Foreign Listing Materiality Requirement, the aggregate market capitalization of all securities represented by foreign listings should represent at least (i) 5% of the free float-adjusted market capitalization of the relevant
MSCI Country Investable Market Index and (ii) 0.05% of the free-float adjusted market capitalization of the MSCI ACWI Investable Market Index.
Determining the Market Investable Equity Universes. A market investable equity universe for a market is derived by identifying eligible listings for each security
in the equity universe, and by applying investability screens to individual companies and securities in the equity universe that are classified in that market. A market is equivalent to a single country, except in DM Europe, where all DM countries in
Europe are aggregated into a single market for index construction purposes. Subsequently, individual DM Europe country indices within the MSCI Europe Index are derived from the constituents of the MSCI Europe Index under the global investable market
A security may be listed in the country where it is classified (i.e. local listing) and/or in a different country (i.e. “foreign listing”). Securities may be represented by either a
local or foreign listing. A security may be represented by a foreign listing only if:
• The security is classified in a country that meets the Foreign Listing Materiality Requirement, and
• The security’s foreign listing is traded on an eligible stock exchange of: a DM country if the security is classified in a DM country, a DM or an EM country if
the security is classified in an EM country, or a DM or an EM or a FM country if the security is classified in a FM country. Securities in that country may not be represented by a foreign listing in the global investable equity universe if a country
does not meet the requirement.
The investability screens used to determine the investable equity universe in each market are as follows:
• Equity Universe Minimum Size Requirement: this investability screen is applied at the company level. En
order to be included in a market investable equity universe, a company must have the required minimum full market capitalization. The size requirement also applies to companies in all developed and emerging markets.
• Equity Universe Minimum Free Float-Adjusted Market Capitalization Requirement: this investability
screen is applied at the individual security level. To be eligible for inclusion in a market investable equity universe, a security must have a free float-adjusted market capitalization equal to or higher than 50% of the equity universe minimum size
• DM and EM Minimum Liquidity Requirement: this investability screen is applied at the individual security level. A
be eligible for inclusion in a market investable equity universe, a security must have adequate liquidity. The twelve-month and three-month Annual Traded Value Ratio (“ATVR”), a measure that screens out extreme daily trading volumes and takes into
account the free float-adjusted market capitalization size of securities, together with the three-month frequency of trading are used to measure liquidity. A minimum liquidity level of 20% of three- and twelve-month ATVR and 90% of three-month
frequency of trading over the last four consecutive quarters are required for inclusion of a security in a market investable equity universe of a DM, and a minimum
liquidity level of 15% of three- and twelve-month ATVR and 80% of three-month frequency of trading over the last four consecutive quarters are required for inclusion of a security in a
market investable equity universe of an EM.
• Global Minimum Foreign Inclusion Factor Requirement: this investability screen is applied at the
individual security level. To be eligible for inclusion in a market investable equity universe, a security’s Foreign Inclusion Factor (“FIF”) must reach a certain threshold. The FIF of a security is defined as the proportion of shares outstanding
that is available for purchase in the public equity markets by international investors. This proportion accounts for the available free float of and/or the foreign ownership limits applicable to a specific security (or company).
In general, a security must have an FIF equal to or larger than 0.15 to be eligible for inclusion in a market investable equity universe.
• Minimum Length of Trading Requirement: this investability screen is applied at the individual security
level. For an initial public offering (“IPO”) to be eligible for inclusion in a market investable equity universe, the new issue must have started trading at least three months before the implementation of a semi-annual index review (as described
below). This requirement is applicable to small new issues in all markets. Large IPOs are not subject to the minimum length of trading requirement and may be included in a market investable equity universe and the Standard Index outside of a
Quarterly or Semi-Annual Index Review.
• Minimum Foreign Room Requirement: this investability screen is applied at the
individual security level. For a security that is subject to a foreign ownership limit to be eligible for inclusion in a market investable equity universe, the proportion of shares still available to foreign investors relative to the maximum allowed
(referred to as “foreign room”) must be at least 15%.
Defining Market Capitalization Size Segments for Each Market. Once a market investable equity universe is defined, it is segmented into the following size-based
• Investable Market Index (Large + Mid + Small);
• Standard Index (Large + Mid);
• Large Cap Index;
• Mid Cap Index; o
• Small Cap Index.
Creating the size segment indices in each market involves the following steps:
• defining the market coverage target range for each size segment;
• determining the global minimum size range for each size segment;
• determining the market size-segment cutoffs and associated segment number of companies;
• assigning companies to the size segments; y
• applying final size-segment investability requirements.
Index Continuity Rules for the Standard Indices. In order to achieve index continuity, as well as to provide some basic level of diversification within a market
index, and notwithstanding the effect of other index construction rules described in this section, a minimum number of five constituents will be maintained for a DM Standard Index and a minimum number of three constituents will be maintained for an
EM Standard Index.
Creating Style Indices within Each Size Segment. All securities in the investable equity universe are classified into value or growth
segments using the MSCI Global Value and Growth methodology.
Classifying Securities under the Global Industry Classification Standard. All securities in the global investable equity universe are
assigned to the industry that best describes their business activities. To this end, MSCI has designed, in conjunction with S&P Dow Jones Indexes, the GICS. Under the GICS, each company is assigned to one sub−industry according to its principal
business activity. Therefore, a company can belong to only one industry grouping at each of the four levels of the GICS.
Calculation Methodology for the Underlying Index
The performance of the underlying index is a free float weighted average of the U.S. dollar values of its component securities.
Prices used to calculate the component securities are the official exchange closing prices or prices accepted as such in the relevant market. In the case of a market closure, or if a security does not trade on a specific
day or during a specific period, MSCI carries forward the previous day’s price (or latest available closing price). In the event of a market outage resulting in any component security price to be unavailable, MSCI will generally use the last reported
price for such component security for the purpose of performance calculation unless MSCI determines that another price is more
appropriate based on the circumstances. Closing prices are converted into U.S. dollars, as applicable, using the closing exchange rates calculated by WM/Reuters at 4:00 P.M. London Time.
The MSCI global investable market indices are maintained with the objective of reflecting the evolution of the underlying equity markets and segments on a timely basis, while seeking to achieve index
continuity, continuous investability of constituents and replicability of the indices, index stability, and low index turnover. In particular, index maintenance involves:
Semi-Annual Index Reviews (“SAIRs”) in May and November of the Size Segment and Global Value and Growth Indices which include:
a. updating the indices on the basis of a fully refreshed equity universe;
si. taking buffer rules into consideration for migration of securities across size and style segments; y
c. updating FIFs and Number of Shares (“NOS”).
Quarterly Index Reviews (“QIRs”) in February and August of the Size Segment Indices aimed at:
a. including significant new eligible securities (such as IPOs that were not eligible for earlier inclusion) in the index;
si. allowing for significant moves of companies within the Size Segment Indices, using wider buffers than in the SAIR; y
c. reflecting the impact of significant market events on FIFs and updating NOS.
Ongoing Event-Related Changes: changes of this type are generally implemented in the indices as they occur. Significantly large IPOs are included in the indices after the close of the company’s tenth day of trading.
Neither we nor any of our affiliates, including RBCCM, accepts any responsibility for the calculation, maintenance, or publication of, or for any error, omission, or disruption in,
the underlier or any successor to the underlier.
License Agreement with MSCI
We have entered into a non-exclusive license agreement with MSCI providing for the license to us and certain of our affiliates, in exchange for a fee, of the right to use the
underlier in connection with securities, including the notes. The underlier is owned and published by MSCI.
The license agreement between MSCI and us provides that the following language must be set forth in this pricing supplement:
THE NOTES ARE NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI INC. (“MSCI”), ANY AFFILIATE OF MSCI OR ANY OTHER PARTY INVOLVED IN, OR RELATED TO, MAKING OR
COMPILING ANY MSCI INDEX. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES ARE SERVICE MARK(S) OF MSCI OR ITS AFFILIATES AND HAVE BEEN LICENSED FOR USE FOR CERTAIN PURPOSES BY ROYAL BANK OF CANADA AND ITS
AFFILIATES. NEITHER MSCI, ANY OF ITS AFFILIATES NOR ANY OTHER PARTY INVOLVED IN, OR RELATED TO, MAKING OR COMPILING ANY MSCI INDEX MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF THE NOTES OR ANY MEMBER OF THE PUBLIC
REGARDING THE ADVISABILITY OF INVESTING IN FINANCIAL SECURITIES GENERALLY OR IN THE NOTES PARTICULARLY OR THE ABILITY OF ANY MSCI INDEX TO TRACK CORRESPONDING STOCK MARKET PERFORMANCE. MSCI OR ITS AFFILIATES ARE THE LICENSORS OF CERTAIN TRADEMARKS,
SERVICE MARKS AND TRADE NAMES AND OF THE MSCI INDEXES WHICH ARE DETERMINED, COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE NOTES OR THE ISSUER OR OWNER OF THE NOTES. NEITHER MSCI, ANY OF ITS AFFILIATES NOR ANY OTHER PARTY INVOLVED IN, OR
RELATED TO, MAKING OR COMPILING ANY MSCI INDEX HAS ANY OBLIGATION TO TAKE THE NEEDS OF THE ISSUERS OR OWNERS OF THE NOTES INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE MSCI INDEXES. NEITHER MSCI, ITS AFFILIATES NOR ANY OTHER PARTY
INVOLVED IN, OR RELATED TO, MAKING OR COMPILING ANY MSCI INDEX IS RESPONSIBLE FOR OR HAS PARTICIPATED IN THE DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE NOTES TO BE ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY
WHICH THE NOTES ARE REDEEMABLE FOR CASH. NEITHER MSCI, ANY OF ITS AFFILIATES NOR ANY OTHER PARTY INVOLVED IN, OR RELATED TO, THE MAKING OR COMPILING ANY MSCI INDEX HAS ANY OBLIGATION OR LIABILITY TO THE OWNERS OF THE NOTES IN CONNECTION WITH THE
ADMINISTRATION, MARKETING OR OFFERING OF THE NOTES.
ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE CALCULATION OF THE MSCI INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER MSCI, ANY OF ITS
AFFILIATES NOR ANY OTHER PARTY INVOLVED IN, OR RELATED TO MAKING OR COMPILING ANY
MSCI INDEX WARRANTS OR GUARANTEES THE ORIGINALITY, ACCURACY AND/OR THE COMPLETENESS OF ANY MSCI INDEX OR ANY DATA INCLUDED THEREIN. NEITHER MSCI, ANY OF ITS
AFFILIATES NOR ANY OTHER PARTY INVOLVED IN, OR RELATED TO, MAKING OR COMPILING ANY MSCI INDEX MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, LICENSEE’S CUSTOMERS OR COUNTERPARTIES, ISSUERS OF THE NOTES, OWNERS OF
THE NOTES, OR ANY OTHER PERSON OR ENTITY, FROM THE USE OF ANY MSCI INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED HEREUNDER OR FOR ANY OTHER USE. NEITHER MSCI, ANY OF ITS AFFILIATES NOR ANY OTHER PARTY INVOLVED IN, OR
RELATED TO, MAKING OR COMPILING ANY MSCI INDEX SHALL HAVE ANY LIABILITY FOR ANY ERRORS, OMISSIONS OR INTERRUPTIONS OF OR IN CONNECTION WITH ANY MSCI INDEX OR ANY DATA INCLUDED THEREIN. FURTHER, NEITHER MSCI, ANY OF ITS AFFILIATES NOR ANY OTHER PARTY
INVOLVED IN, OR RELATED TO, MAKING OR COMPILING ANY MSCI INDEX MAKES ANY EXPRESS OR IMPLIED WARRANTIES OF ANY KIND, AND MSCI, ANY OF ITS AFFILIATES AND ANY OTHER PARTY INVOLVED IN, OR RELATED TO MAKING OR COMPILING ANY MSCI INDEX HEREBY EXPRESSLY
DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO ANY MSCI INDEX AND ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL MSCI, ANY OF ITS AFFILIATES OR ANY OTHER PARTY
INVOLVED IN, OR RELATED TO, MAKING OR COMPILING ANY MSCI INDEX HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
No purchaser, seller or holder of the notes, or any other person or entity, should use or refer to any MSCI trade name, trade mark or service mark rights to sponsor, endorse, market
or promote the notes without first contacting MSCI to determine whether MSCI’s permission is required. Under no circumstances may any person or entity claim affiliation with MSCI without the prior written permission of MSCI.
Historical Performance of the Underlier
The closing levels of the underlier have fluctuated in the past and may experience significant fluctuations in the future. Any historical upward or downward trend in the closing
levels of the underlier during any period shown below is not an indication that the underlier is more or less likely to increase or decrease at any time during the term of the notes.
The historical levels of the underlier are provided for informational purposes only. You should not take the historical levels of the underlier as an indication of its future
performance. We cannot give you any assurance that the future performance of the underlier or the underlier stocks will result in your receiving an amount greater than the original issue price at maturity. Neither we nor any of our affiliates makes
any representation to you as to the performance of the underlier. Moreover, in light of current market conditions, the trends reflected in the historical performance of the underlier may be less likely to be indicative of the performance of the
underlier over the term of the notes than would otherwise have been the case. The actual performance of the underlier over the term of the notes, as well as the cash settlement amount, may bear little relation to the historical levels shown below.
The graph below shows the daily historical closing levels of the underlier from December 19, 2009 through December 19, 2019. We obtained the closing levels of the underlier listed in
the graph below from Bloomberg Financial Services, without independent verification. Bloomberg Financial Services reports the levels of the underlier to fewer decimal places than the underlier sponsor.
Historical Performance of the MSCI EAFE® Index
SUPPLEMENTAL DISCUSSION OF U.S. FEDERAL INCOME TAX CONSEQUENCES
The following disclosure supplements, and to the extent inconsistent supersedes, the discussion in the product prospectus supplement dated September 20, 2018 under “Supplemental
Discussion of U.S. Federal Income Tax Consequences.”
Under Section 871(m) of the Code, a “dividend equivalent” payment is treated as a dividend from sources within the United States. Such payments generally would be subject to a 30%
U.S. withholding tax if paid to a non-U.S. holder. Under U.S. Treasury Department regulations, payments (including deemed payments) with respect to equity-linked instruments (“ELIs”) that are “specified ELIs” may be treated as dividend equivalents
if such specified ELIs reference an interest in an “underlying security,” which is generally any interest in an entity taxable as a corporation for U.S. federal income tax purposes if a payment with respect to such interest could give rise to a U.S.
source dividend. However, the IRS has issued guidance that states that the U.S. Treasury Department and the IRS intend to amend the effective dates of the U.S. Treasury Department regulations to provide that withholding on dividend equivalent
payments will not apply to specified ELIs that are not delta-one instruments and that are issued before January 1, 2023. Based on our determination that the notes are not delta-one instruments, non-U.S. holders should not be subject to withholding on
dividend equivalent payments, if any, under the notes. However, it is possible that the notes could be treated as deemed reissued for U.S. federal income tax purposes upon the occurrence of certain events affecting the underlier or the notes (for
example, upon the underlier rebalancing), and following such occurrence the notes could be treated as subject to withholding on dividend equivalent payments. Non-U.S. holders that enter, or have entered, into other transactions in respect of the
underlier or the notes should consult their tax advisors as to the application of the dividend equivalent withholding tax in the context of the notes and their other transactions. If any payments are treated as dividend equivalents subject to
withholding, we (or the applicable withholding agent) would be entitled to withhold taxes without being required to pay any additional amounts with respect to amounts so withheld.
The accompanying product prospectus supplement notes that FATCA withholding on payments of gross proceeds from a sale or redemption of the notes will only apply to payments made
after December 31, 2018. That discussion is modified to reflect regulations proposed by the U.S. Treasury Department in December 2018 indicating an intent to eliminate the requirement under FATCA of withholding on gross proceeds of the disposition of
financial instruments. The U.S. Treasury Department has indicated that taxpayers may rely on these proposed regulations pending their finalization. Prospective investors are urged to consult with their own tax advisors regarding the possible
implications of FATCA on their investment in the notes.
SUPPLEMENTAL PLAN OF DISTRIBUTION (CONFLICTS OF INTEREST)
We have agreed to sell to RBCCM, and RBCCM has agreed to purchase from us, the principal amount of the notes specified, at the price specified, on the cover page of this pricing
supplement. RBCCM has informed us that, as part of its distribution of the notes, it will reoffer them at a purchase price equal to 100.00% of the principal amount to one or more other dealers who will sell them to their customers. In the future,
RBCCM or one of its affiliates, may repurchase and resell the notes in market-making transactions, with resales being made at prices related to prevailing market prices at the time of resale or at negotiated prices. For more information about the
plan of distribution, the distribution agreement and possible market-making activities, see “Supplemental Plan of Distribution” in the accompanying prospectus supplement. For additional information as to the relationship between us and RBCCM, please
see the section “Plan of Distribution―Conflicts of Interest” in the accompanying prospectus.
RBCCM, acting as agent for Royal Bank of Canada, will not receive an underwriting discount in connection with the sale of the notes.
We will deliver the notes against payment therefor in New York, New York on December 27, 2019, which is the fifth scheduled business day following the trade date. Under Rule 15c6-1
of the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade notes on any date
prior to two business days before delivery will be required, by virtue of the fact that the notes will settle in five business days (T + 5), to specify alternative settlement arrangements to prevent a failed settlement.
RBCCM may use this pricing supplement in the initial sale of the notes. In addition, RBCCM or any other affiliate of Royal Bank of Canada may use this pricing supplement in a
market-making transaction in a note after its initial sale. Unless RBCCM or its agent informs the purchaser otherwise in the confirmation of sale, this pricing supplement is being used in a market-making transaction.
RBCCM or another of our affiliates may make a market in the notes after the trade date; however, it is not obligated to do so. The price that it makes available from time to time after the issue date at
which it would be willing to repurchase the notes will generally reflect its estimate of their value. That estimated value will be based upon a variety of factors, including then prevailing market conditions, our creditworthiness and transaction
costs. However, for a period of approximately three months after the trade date, the price at which RBCCM may repurchase the notes is expected to be higher than their estimated value at that time. This is because, at the beginning of this period,
that price will not include certain costs that were included in the original issue price, particularly our hedging costs and profits. As the period continues, these costs are expected to be gradually included in the price that RBCCM would be willing
to pay, and the difference between that price and RBCCM’s estimate of the value of the notes will decrease over time until the end of this period. After this period, if RBCCM continues to make a market in the notes, the prices that it would pay for
them are expected to reflect its estimated value, as well as customary bid-ask spreads for similar trades. In addition, the value of the notes shown on your account statement may not be identical to the price at which RBCCM would be willing to
purchase the notes at that time, and could be lower than RBCCM’s price. RBCCM and each dealer through which we may offer the notes has not offered, sold or otherwise made available and will not offer, sell or otherwise make available any notes to,
any retail investor in the European Economic Area (“EEA”). For these purposes, the expression “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the notes to be offered so as to
enable an investor to decide to
purchase or subscribe the notes, and a “retail investor” means a person who is one (or more) of: (a) a retail client, as defined in point (11) of Article 4(1) of Directive 2014/65/EU
(as amended, “MiFID II”); or (b) a customer, within the meaning of Directive 2016/97/EU, as amended, where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (c) not a qualified investor
as defined in Regulation (EU) (2017/1129) (the “Prospectus Regulation”). Consequently, no key information document required by Regulation (EU) No 1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the notes or otherwise making
them available to retail investors in the EEA has been prepared, and therefore, offering or selling the notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
STRUCTURING THE NOTES
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 these 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. This relatively lower implied borrowing rate, which is reflected in the economic terms of the notes, along with the fees and expenses associated with structured notes, reduced
the initial estimated value of the notes at the time their terms were set.
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, and the tenor of the notes. The economic terms of
the notes and their initial estimated value depend in part on the terms of these hedging arrangements. Our cost of hedging will include the projected profit that such counterparties expect to realize in consideration for assuming the risks inherent
in hedging our obligations under the notes. Because hedging our obligations entails risks and may be influenced by market forces beyond the counterparties’ control, such hedging may result in a profit that is more or less than expected, or could
result in a loss. See “Use of Proceeds and Hedging” on page PS-13 of the accompanying product prospectus supplement PB-1.
The lower implied borrowing rate 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 on the trade date being less than their original issue price. See “Risk Factors—Our Initial Estimated Value of the Notes Is Less than the Original Issue Price.”
TERMS INCORPORATED IN THE MASTER NOTE
All of the terms appearing in the section “Summary Information,” including the items captioned “calculation agent” and “U.S. tax treatment,” in this pricing supplement, the terms
appearing under the caption “General Terms of the Notes—Defeasance, Default Amount, Other Terms,” the terms appearing in the first five paragraphs under the caption “—Payment of Additional Amounts,” the terms appearing under the captions
“—Unavailability of the Level of the Underlier,” “—Market Disruption Events,” and “— Default Amount on Acceleration” in the product prospectus supplement PB-1 and the applicable terms included in the Series H MTN prospectus supplement, dated
September 7, 2018 and the prospectus, dated September 7, 2018 are incorporated into the master global security that represents the notes and is held by The Depository Trust Company.
VALIDITY OF THE NOTES
In the opinion of Norton Rose Fulbright Canada LLP, the issue and sale of the notes has been duly authorized by all necessary corporate action of ours in conformity with the
Indenture, and when the notes have been duly executed, authenticated and issued in accordance with the Indenture and delivered against payment therefor, the notes will be validly issued and, to the extent validity of the notes is a matter governed by
the laws of the Province of Ontario or Québec, or the laws of Canada applicable therein, and will be valid obligations of ours, subject to equitable remedies which may only be granted at the discretion of a court of competent authority, subject to
applicable bankruptcy, to rights to indemnity and contribution under the notes or the Indenture which may be limited by applicable law, to insolvency and other laws of general application affecting creditors’ rights, to limitations under applicable
limitations statutes and subject to limitations as to the currency in which judgments in Canada may be rendered, as prescribed by the Currency Act (Canada). This opinion is given as of the date hereof and is limited to the laws of the Provinces of
Ontario and Québec and the federal laws of Canada applicable thereto. In addition, this opinion is subject to customary assumptions about the Trustee’s authorization, execution and delivery of the Indenture and the genuineness of signatures and
certain factual matters, all as stated in the letter of such counsel dated September 7, 2018, which has been filed as Exhibit 5.1 to our Form 6-K filed with the SEC dated September 7, 2018.
In the opinion of Morrison & Foerster LLP, when the notes have been duly completed in accordance with the Indenture and issued and sold as contemplated by the prospectus supplement and the
prospectus, the notes will be our valid, binding and enforceable obligations, entitled to the benefits of the Indenture, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness
and equitable principles of general applicability (including, without limitation, concepts of good faith, fair dealing and the lack of bad faith). This opinion is given as of the date hereof and is limited to the laws of the State of New York. Esta
opinion is subject to customary assumptions about the Trustee’s authorization, execution and delivery of the Indenture and the genuineness of signatures and to such counsel’s reliance on us and other sources as to certain factual matters, all as
stated in the legal opinion dated September 7, 2018, which has been filed as Exhibit 5.2 to our Form 6-K dated September 7, 2018.
TABLE OF CONTENTS
Additional Risk Factors Specific to Your Notes
Supplemental Discussion of U.S. Federal Income Tax Consequences
Supplemental Plan of Distribution (Conflicts of Interest)
Structuring the Notes
Terms Incorporated in the Master Note
Validity of the Notes
Product Prospectus Supplement PB-1 dated September 20, 2018
General Terms of the Notes
Hypothetical Returns on Your Notes
Use of Proceeds and Hedging
Historical Underlier Information
Supplemental Discussion of Canadian Tax Consequences
Supplemental Discussion of U.S. Federal Income Tax Consequences
Employee Retirement Income Security Act
Supplemental Plan of Distribution
Prospectus Supplement dated September 7, 2018
About This Prospectus Supplement
Use of Proceeds
Description of Notes We May Offer
Certain Income Tax Consequences
Supplemental Plan of Distribution
Documents Filed as Part of the Registration Statement
Prospectus dated September 7, 2018
Documents Incorporated by Reference
Where You Can Find More Information
About This Prospectus
Royal Bank of Canada
Presentation of Financial Information
Caution Regarding Forward-Looking Statements
Use of Proceeds
Consolidated Ratios of Earnings to Fixed Charges
Consolidated Capitalization and Indebtedness
Comparative per Share Market Price
Description of Debt Securities
Description of Common Shares
Description of Warrants
Plan of Distribution
Conflicts of Interest
Benefit Plan Investor Considerations
Limitations on Enforcement of U.S. Laws Against the Bank, Our Management and Others
Validity of Securities
Other Expenses of Issuance and Distribution
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, the accompanying product
prospectus supplement PB-1, the accompanying prospectus supplement or the accompanying prospectus. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. Estas
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 respective date.
Royal Bank of Canada
Leveraged Buffered MSCI EAFE® Index-
Linked Notes, due May 23, 2022
RBC Capital Markets, LLC
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