RBC Capital Markets®
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Filed Pursuant to Rule 433
Registration Statement No. 333-227001
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The information in this preliminary terms supplement is not complete and may be changed.
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Preliminary Terms Supplement
Subject to Completion:
Dated April 17, 2019
Pricing Supplement Dated April __, 2019 to the Product Prospectus Supplement No. CCBN-1 Dated September 10, 2018, the Prospectus Supplement
Dated September 7, 2018 and the Prospectus, Dated September 7, 2018
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$
Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity
Securities, Due April 29, 2022
Royal Bank of Canada
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Reference Stocks and Reference Stock Issuers
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Initial Stock Prices*
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Coupon Barriers and Trigger Prices
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Amazon.com, Inc. (“AMZN”)
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50.00% of its Initial Stock Price
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Facebook, Inc. (“FB”)
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50.00% of its Initial Stock Price
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Alphabet Inc. (“GOOGL”)
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50.00% of its Initial Stock Price
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Netflix Inc. (“NFLX”)
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50.00% of its Initial Stock Price
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Issuer:
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Royal Bank of Canada
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Stock Exchange Listing:
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None
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Trade Date:
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April 26, 2019
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Principal Amount:
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$1,000 per Note
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Issue Date:
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April 30, 2019
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Maturity Date:
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April 29, 2022
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Observation Dates:
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Quarterly, as set forth below.
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Coupon Payment Dates:
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Quarterly, as set forth below
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Valuation Date:
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April 26, 2022
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Contingent Coupon Rate:
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[9.00%-10.00%] per annum (to be determined on the Trade Date)
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Contingent Coupon:
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If the closing price of each Reference Stock is
greater than or equal to its Coupon Barrier on the applicable Observation Date, we will pay the Contingent Coupon applicable to the corresponding Observation Date. You may not receive any Contingent Coupons during the term of the Notes.
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Payment at Maturity (if held
to maturity):
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If the Notes are not previously called, we will pay you at maturity an amount based on the Final Stock Price of the Lesser Performing Reference
Stock:
For each $1,000 in principal amount, $1,000 plus the Contingent Coupon at maturity, unless the Final Stock Price of the Lesser Performing
Reference Stock is less than its Trigger Price.
If the Final Stock Price of the Lesser Performing Reference Stock is less than its Trigger Price, then the investor will receive at maturity, for
each $1,000 in principal amount, a cash payment equal to:
$1,000 + ($1,000 x Reference Stock Return of the Lesser Performing Reference Stock)
Investors could lose some or all of their principal amount if the Final Stock Price of the Lesser Performing Reference Stock
is below its Trigger Price.
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Lesser Performing
Reference Stock:
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The Reference Stock with the lowest Reference Stock Return.
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Call Feature:
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If the closing price of each Reference Stock is
greater than or equal to its Initial Stock Price starting on October 28, 2019 and on any Observation Date thereafter, the Notes will be automatically called for
100% of their principal amount, plus the Contingent Coupon applicable to the corresponding Observation Date.
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Call Settlement Dates:
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The Coupon Payment Date corresponding to that Observation Date.
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Final Stock Price:
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For each Reference Stock, its closing price on the Valuation Date.
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CUSIP:
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78013X5V6
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Per Note
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Total
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Price to public(1)
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100.00%
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$
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Underwriting discounts and commissions(1)
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2.25%
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$
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Proceeds to Royal Bank of Canada
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97.75%
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$
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
General:
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This terms supplement relates to an offering of Auto-Callable Contingent Coupon Barrier Notes (the “Notes”) linked to
the lesser performing of four equity securities (the “Reference Stocks”).
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Issuer:
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Royal Bank of Canada (“Royal Bank”)
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Trade Date:
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April 26, 2019
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Issue Date:
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April 30, 2019
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Valuation Date:
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April 26, 2022
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Maturity Date:
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April 29, 2022
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Denominations:
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Minimum denomination of $1,000, and integral multiples of $1,000 thereafter.
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Designated Currency:
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U.S. Dollars
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Contingent Coupon:
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We will pay you a Contingent Coupon during the term of the Notes, periodically in arrears on each Coupon Payment Date, under the conditions
described below:
• If the closing price of each Reference Stock is greater than or equal to its Coupon Barrier on the applicable
Observation Date, we will pay the Contingent Coupon applicable to that Observation Date.
• If the closing price of any of the Reference Stocks is less than its Coupon Barrier on the applicable Observation Date,
we will not pay you the Contingent Coupon applicable to that Observation Date.
You may not receive a Contingent Coupon for one or more quarterly periods during the term of the Notes.
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Contingent Coupon Rate:
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[9.00%-10.00%] per annum ([2.25%-2.50%] per quarter), to be determined on the Trade Date.
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Observation Dates:
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Quarterly on July 26, 2019, October 28, 2019, January 27, 2020, April 27, 2020, July 27, 2020, October 26, 2020, January 26,
2021, April 26, 2021, July 26, 2021, October 26, 2021, January 26, 2022 and the Valuation Date.
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Coupon Payment Dates:
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The Contingent Coupon, if applicable, will be paid quarterly on July 31, 2019, October 31, 2019, January 30, 2020, April 30,
2020, July 30, 2020, October 29, 2020, January 29, 2021, April 29, 2021, July 29, 2021, October 29, 2021, January 31, 2022 and the Maturity Date.
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Record Dates:
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The record date for each Coupon Payment Date will be one business day prior to that scheduled Coupon Payment Date; provided,
however, that any Contingent Coupon payable at maturity or upon a call will be payable to the person to whom the payment at maturity or upon the call, as the case may be, will be payable.
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Call Feature:
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If, starting on October 28, 2019 and on any
Observation Date thereafter, the closing price of each Reference Stock is greater than or equal to its Initial Stock Price, then the Notes will be automatically called.
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Payment if Called:
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If the Notes are automatically called, then, on the applicable Call Settlement Date, for each $1,000 principal amount, you
will receive $1,000 plus the Contingent Coupon otherwise due on that Call Settlement Date.
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Call Settlement Dates:
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If the Notes are called on any Observation Date starting on October 28, 2019 or thereafter, the Call Settlement Date will be
the Coupon Payment Date corresponding to that Observation Date.
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Initial Stock Price:
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For each Reference Stock, its closing price on the Trade Date.
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Final Stock Price:
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For each Reference Stock, its closing price on the Valuation Date.
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
Trigger Price and
Coupon Barrier:
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For each Reference Stock, 50.00% of its Initial Stock Price.
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Payment at Maturity (if
not previously called and
held to maturity):
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If the Notes are not previously called, we will pay you at maturity an amount based on the Final Stock Price of the Lesser
Performing Reference Stock:
• If the Final Stock Price of the Lesser Performing Reference Stock is greater than or equal to its Trigger Price, we will pay you a cash payment equal to the principal amount plus the Contingent Coupon otherwise due on the Maturity
Date.
• If the Final Stock Price of the Lesser Performing Reference Stock is below its Trigger Price, you will receive at maturity, for each $1,000 in principal amount, a cash payment equal to:
$1,000 + ($1,000 x Reference Stock Return of the Lesser Performing Reference Stock)
The amount of cash that you receive will be less than your principal amount, if anything, resulting in a loss that is
proportionate to the decline of the Lesser Performing Reference Stock from the Trade Date to the Valuation Date. Investors in the Notes will lose some or all of their
principal amount if the Final Stock Price of the Lesser Performing Reference Stock is less than its Trigger Price.
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Stock Settlement:
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Not applicable. Payments on the Notes will be made solely in cash.
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Reference Stock Return:
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With respect to each Reference Stock:
Final Stock Price – Initial Stock Price
Initial Stock Price
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Lesser Performing
Reference Stock:
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The Reference Stock with the lowest Reference Stock Return.
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Market Disruption
Events:
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The occurrence of a market disruption event (or a non-trading day) as to any of the Reference Stocks will result in the
postponement of an Observation Date or the Valuation Date as to that Reference Stock, as described in the product prospectus supplement, but not to any non-affected Reference Stock.
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Calculation Agent:
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RBC Capital Markets, LLC (“RBCCM”)
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U.S. Tax Treatment:
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By purchasing a Note, each holder agrees (in the absence of a change in law, an administrative determination or a
judicial ruling to the contrary) to treat the Notes as a callable pre-paid cash-settled contingent income-bearing derivative contract linked to the Reference Stocks for U.S. federal income tax purposes. However, the U.S. federal income tax
consequences of your investment in the Notes are uncertain and the Internal Revenue Service could assert that the Notes should be taxed in a manner that is different from that described in the preceding sentence. Please see the section
below, “Supplemental Discussion of U.S. Federal Income Tax Consequences,” and the discussion (including the opinion of our counsel Morrison & Foerster LLP) in the product prospectus supplement dated September 10, 2018 under
“Supplemental Discussion of U.S. Federal Income Tax Consequences,” which apply to the Notes.
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Secondary Market:
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RBCCM (or one of its affiliates), though not obligated to do so, may maintain a secondary market in the Notes after the
Issue Date. The amount that you may receive upon sale of your Notes prior to maturity may be less than the principal amount.
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Listing:
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The Notes will not be listed on any securities exchange.
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Settlement:
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DTC global (including through its indirect participants Euroclear and Clearstream, Luxembourg as described under
“Description of Debt Securities—Ownership and Book-Entry Issuance” in the prospectus dated September 7, 2018).
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Terms Incorporated in
the Master Note:
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All of the terms appearing above the item captioned “Secondary Market” on the cover page and pages P-2 and P-3 of this terms supplement
and the terms appearing under the caption “General Terms of the Notes” in the product prospectus supplement dated September 10, 2018, as modified by this terms supplement.
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
Hypothetical Initial Stock Price:
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$100.00*
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Hypothetical Trigger Price and Coupon Barrier:
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$50.00, which is 50.00% of the hypothetical Initial Stock Price
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Hypothetical Contingent Coupon Rate:
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9.50% per annum (or 2.375% per quarter), which is the midpoint of the Contingent Coupon Rate range set forth above (to be
determined on the Trade Date).
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Hypothetical Contingent Coupon Amount:
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$23.75 per quarter
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Observation Dates:
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Quarterly
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Principal Amount:
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$1,000 per Note
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Hypothetical Final Stock Price of
the Lesser Performing
Reference Stock
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Payment at Maturity as
Percentage of Principal Amount
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Cash Payment Amount per
$1,000 in Principal Amount
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$180.00
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102.375%*
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$1,023.75*
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$170.00
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102.375%*
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$1,023.75*
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$160.00
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102.375%*
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$1,023.75*
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$150.00
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102.375%*
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$1,023.75*
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$140.00
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102.375%*
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$1,023.75*
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$125.00
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102.375%*
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$1,023.75*
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$120.00
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102.375%*
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$1,023.75*
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$110.00
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102.375%*
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$1,023.75*
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$100.00
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102.375%*
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$1,023.75*
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$90.00
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102.375%*
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$1,023.75*
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$80.00
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102.375%*
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$1,023.75*
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$60.00
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102.375%*
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$1,023.75*
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$50.00
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102.375%*
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$1,023.75*
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$49.99
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49.99%
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$499.90
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$40.00
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40.00%
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$400.00
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$30.00
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30.00%
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$300.00
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$20.00
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20.00%
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$200.00
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$10.00
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10.00%
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$100.00
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$0.00
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0%
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$0.00
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
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Principal at Risk — Investors in the Notes could lose all or a substantial portion of their principal amount
if there is a decline in the trading price of the Lesser Performing Reference Stock between the Trade Date and the Valuation Date. If the Notes are not automatically called and the Final Stock Price of the Lesser Performing Reference
Stock on the Valuation Date is less than its Trigger Price, the amount of cash that you receive at maturity will represent a loss of your principal that is proportionate to the decline in the closing price of the Lesser Performing
Reference Stock from the Trade Date to the Valuation Date. Any Contingent Coupons received on the Notes prior to the Maturity Date may not be sufficient to compensate for any such loss.
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The Notes Are Subject to an Automatic Call — If on any Observation Date on or after October 28, 2019, the
closing price of each Reference Stock is greater than or equal to its Initial Stock Price, then the Notes will be automatically called. If the Notes are automatically called, then, on the applicable Call Settlement Date, for each $1,000
in principal amount, you will receive $1,000 plus the Contingent Coupon otherwise due on the applicable Call Settlement Date. You will not receive any Contingent Coupons after the Call Settlement Date. You may be unable to reinvest your
proceeds from the automatic call in an investment with a return that is as high as the return on the Notes would have been if they had not been called.
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You May Not Receive Any Contingent Coupons — We will not necessarily make any coupon payments on the Notes.
If the closing price of any of the Reference Stocks on an Observation Date is less than its Coupon Barrier, we will not pay you the Contingent Coupon applicable to that Observation Date. If the closing price of any of the Reference
Stocks is less than its Coupon Barrier on each of the Observation Dates and on the Valuation Date, we will not pay you any Contingent Coupons during the term of, and you will not receive a positive return on your Notes. Generally, this
non-payment of the Contingent Coupon coincides with a period of greater risk of principal loss on your Notes. Accordingly, if we do not pay the Contingent Coupon on the Maturity Date, you will also incur a loss of principal, because the
Final Stock Price of the Lesser Performing Reference Stock will be less than its Trigger Price.
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The Notes Are Linked to the Lesser Performing Reference Stock, Even if the Other Reference Stocks Perform Better — If any of the Reference Stocks has a Final Stock Price that is less than its Trigger Price, your return will be linked to the lesser performing of the four Reference Stocks. Even if the
Final Stock Prices of the other Reference Stocks have increased compared to their respective Initial Stock Prices, or have experienced a decrease that is less than that of the Lesser Performing Reference Stock, your return will only
be determined by reference to the performance of the Lesser Performing Reference Stock, regardless of the performance of the other Reference Stocks. Because each Reference Stock Issuer operates in the technology industry, they may
each experience simultaneous and significant declines due to adverse conditions in that industry.
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Your Payment on the Notes Will Be Determined by Reference to Each Reference Stock Individually, Not to a Basket, and
the Payment at Maturity Will Be Based on the Performance of the Lesser Performing Reference Stock — The Payment at Maturity will be determined only by reference to the performance of the Lesser Performing Reference Stock,
regardless of the performance of the other Reference Stocks. The Notes are not linked to a weighted basket, in which the risk may be mitigated and diversified among each of the basket components. For example, in the case of notes linked
to a weighted basket, the return would depend on the weighted aggregate performance of the basket components reflected as the basket return. As a result, the depreciation of one basket component could be mitigated by the appreciation of
the other basket components, as scaled by the weighting of that basket component. However, in the case of the Notes, the individual performance of each of the Reference Stocks would not be combined, and the depreciation of one Reference
Stock would not be mitigated by any appreciation of the other Reference Stocks. Instead, your return will depend solely on the Final Stock Price of the Lesser Performing Reference Stock.
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The Call Feature and the Contingent Coupon Feature Limit Your Potential Return — The return potential of the
Notes is limited to the pre-specified Contingent Coupon Rate, regardless of the appreciation of the Reference Stocks. In addition, the total return on the Notes will vary based on the number of Observation Dates on which the Contingent
Coupon becomes payable prior to maturity or an automatic call. Further, if the Notes are called due to the Call Feature, you will not receive any Contingent Coupons or any other payment in respect of any Observation Dates after the
applicable Call Settlement Date. Since the Notes could be called as early as October 28, 2019, the total return on the Notes could be minimal. If the Notes are not called, you may be subject to the full downside performance of the
Lesser Performing Reference Stock even though your
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
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Your Return May Be Lower than the Return on a Conventional Debt Security of Comparable Maturity — The return
that you will receive on the Notes, which could be negative, may be less than the return you could earn on other investments. Even if your return is positive, your return may be less than the return you would earn if you bought a
conventional senior interest bearing debt security of Royal Bank.
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Payments on the Notes Are Subject to Our Credit Risk, and Changes in Our Credit Ratings Are Expected to Affect the
Market Value of the Notes — The Notes are our senior unsecured debt securities. As a result, your receipt of any Contingent Coupons, if payable, and the amount due on any relevant payment date is dependent upon our ability to
repay its obligations on the applicable payment dates. This will be the case even if the prices of the Reference Stocks increase after the Trade Date. No assurance can be given as to what our financial condition will be during the term
of the Notes.
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There May Not Be an Active Trading Market for the Notes-Sales in the Secondary Market May Result in Significant
Losses — There may be little or no secondary market for the Notes. The Notes will not be listed on any securities exchange. RBCCM and our other affiliates may make a market for the Notes; however, they are not required to do
so. RBCCM or any other affiliate of ours may stop any market-making activities at any time. Even if a secondary market for the Notes develops, it may not provide significant liquidity or trade at prices advantageous to you. 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.
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The Initial Estimated Value of the Notes Will Be Less than the Price to the Public — The initial estimated value that will be set forth in the final pricing supplement for the Notes does not represent a minimum price at which we, RBCCM or any of
our affiliates would be willing to purchase the Notes in any secondary market (if any exists) at any time. If you attempt to sell the Notes prior to maturity, their market value may be lower than the price you paid for them and the
initial estimated value. This is due to, among other things, changes in the prices of the Reference Stocks, the borrowing rate we pay to issue securities of this kind, and the inclusion in the price to the public of the underwriting
discount and the estimated costs relating to our hedging of the Notes. These factors, together with various credit, market and economic factors over the term of the Notes, are expected to reduce the price at which you may be able to
sell the Notes in any secondary market and will affect the value of the Notes in complex and unpredictable ways. Assuming no change in market conditions or any other relevant factors, the price, if any, at which you may be able to sell
your Notes prior to maturity may be less than your original purchase price, as any such sale price would not be expected to include the underwriting discount and the hedging costs relating to the Notes. In addition to bid-ask spreads,
the value of the Notes determined by RBCCM for any secondary market price is expected to be based on the secondary rate rather than the internal funding rate used to price the Notes and determine the initial estimated value. As a
result, the secondary price will be less than if the internal funding rate was used. The Notes are not designed to be short-term trading instruments. Accordingly, you should be able and willing to hold your Notes to maturity.
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The Initial Estimated Value of the Notes that We Will Provide in the Final Pricing Supplement Will Be an Estimate
Only, Calculated as of the Time the Terms of the Notes Are Set — The initial estimated value of the Notes will be based on the value of our obligation to make the payments on the Notes, together with the mid-market value of
the derivative embedded in the terms of the Notes. See “Structuring the Notes” below. Our estimate will be based on a variety of assumptions, including our credit spreads, expectations as to dividends, interest rates and volatility, and
the expected term of the Notes. These assumptions are based on certain forecasts about future events, which may prove to be incorrect. Other entities may value the Notes or similar securities at a price that is significantly different
than we do.
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Market Disruption Events and Adjustments — The payment at maturity, each Observation Date and the Valuation
Date are subject to adjustment as described in the product prospectus supplement. For a description of what constitutes a market disruption event as well as the consequences of that market disruption event, see “General Terms of the
Notes—Market Disruption Events” in the product prospectus supplement.
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Our Business Activities May Create Conflicts of Interest — We and our affiliates expect to engage in trading
activities related to the Reference Stocks that are not for the account of holders of the Notes or on their behalf. These trading activities may present a conflict between the holders’ interests in the Notes and the interests we and our
affiliates will have in their
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
• |
Owning the Notes Is Not the Same as Owning the Reference Stocks — The return on your Notes is unlikely to
reflect the return you would realize if you actually owned shares of the Reference Stocks. For instance, you will not receive or be entitled to receive any dividend payments or other distributions on these securities during the term of
your Notes. As an owner of the Notes, you will not have voting rights or any other rights that holders of these securities may have. Furthermore, the Reference Stocks may appreciate substantially during the term of the Notes, while your
potential return will be limited to the applicable Contingent Coupon payments.
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You Must Rely on Your Own Evaluation of the Merits of an Investment Linked to the Reference Stocks — In the
ordinary course of their business, our affiliates may have expressed views on expected movements in the Reference Stocks, and may do so in the future. These views or reports may be communicated to our clients and clients of our
affiliates. However, these views are subject to change from time to time. Moreover, other professionals who transact business in markets relating to any Reference Stock may at any time have significantly different views from those of
our affiliates. For these reasons, you are encouraged to derive information concerning the Reference Stocks from multiple sources, and you should not rely solely on views expressed by our affiliates.
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There Is No Affiliation Between the Reference Stock Issuers and RBCCM, and RBCCM Is Not Responsible for any
Disclosure by the Reference Stock Issuers — We are not affiliated with the Reference Stock Issuers. However, we and our affiliates may currently, or from time to time in the future engage, in business with any Reference Stock
Issuer. Nevertheless, neither we nor our affiliates assume any responsibilities for the accuracy or the completeness of any information that any other company prepares. You, as an investor in the Notes, should make your own
investigation into the Reference Stocks.
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
|
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
|
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
|
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |
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Auto-Callable Contingent Coupon Barrier Notes
Linked to the Lesser Performing of Four Equity Securities Royal Bank of Canada |