Agent:
|
Wells Fargo Securities, LLC. The agent may make sales through its affiliates or selling agents.
|
|||
Principal Amount:
|
Each security will have a principal amount of $1,000. The securities are not principal
protected. You may lose up to 100% of the principal amount of the securities.
|
|||
Pricing Date:
|
March 28, 2019*
|
|||
Original Issue Date:
|
April 2, 2019*
|
|||
Valuation Date:
|
March 28, 2022*, subject to postponement as described below.
|
|||
Maturity Date:
|
April 4, 2022*, subject to postponement as described below.
|
|||
Interest:
|
We will not pay you interest during the term of the securities.
|
|||
Basket:
|
The return on the
securities is linked to the performance of a basket (the Basket) consisting of the following two exchange traded funds (the basket
components) having equal weightings: the SPDR® S&P® 500 ETF Trust (Bloomberg symbol: SPY); and the iShares® MSCI China ETF (Bloomberg symbol: MCHI).
|
|||
Payment at Maturity:
|
The amount you receive at maturity, for each security you own, will depend upon the change in
the value of the Basket based on the Final Basket Value relative to the Initial Basket Value (calculated as described in this pricing supplement), and whether or not the Final Basket Value is below the Threshold Value.
(i) If the Final Basket Value is greater than the Initial Basket Value, the maturity payment amount per security will equal the lesser of:
|
|||
(a) $1,000 + ($1,000 x
|
Final Basket Value – Initial Basket
Value
|
x Participation Rate); and
|
||
Initial Basket Value
|
||||
(b) the maximum maturity payment amount
(ii) If the Final Basket Value is less than or equal to the Initial Basket Value but greater
than or equal to the Threshold Value, the maturity payment amount per security will equal the issue price of $1,000.
(iii) If the Final Basket Value is less than the Threshold Value, the maturity payment amount
per security will equal:
|
||||
$1,000 – ( $1,000 x
|
Initial Basket Value – Final Basket Value
|
)
|
||
Initial Basket Value
|
||||
In such a case, you will lose up to 100% of your principal.
|
||||
Maximum Maturity Payment Amount:
|
[$1,480.00 - $1,530.00] per security (to be determined on the pricing date)
|
|||
Participation Rate:
|
125%
|
|||
Initial Basket Value:
|
100
|
|||
Final Basket Value:
|
The Final Basket Value will be calculated based on the weighted returns of the basket components
and will be equal to the product of (i) 100 and (ii) an amount equal to 1 plus the sum of: (A) 50.00% of the component return of the SPDR® S&P® 500 ETF Trust; and (B) 50.00% of the component return of the iShares®
MSCI China ETF.
|
|||
Threshold
Value:
|
80, which is 80% of the Initial Basket Value.
|
|||
Component Return:
|
The component return of each basket component will be equal to:
Final Component
Price – Initial Component Price
Initial Component Price
where,
· the Initial Component Price will be the closing price of the basket component on the pricing date, and
· the Final Component Price will be the closing price of the basket component on the valuation date.
|
|||
Listing:
|
The securities will not be listed on any securities exchange.
|
|||
CUSIP Number:
|
78013X2N7
|
Per Security
|
Total
|
||
Public Offering Price
|
$1,000.00
|
$•
|
|
Maximum Underwriting Discount and Commission(1)
|
$31.50
|
$•
|
|
Minimum Proceeds to Royal Bank of Canada
|
$968.50
|
$•
|
· |
the SPDR® S&P® 500 ETF Trust (50.00%), an exchange traded fund that seeks to track the S&P 500® Index (its Underlying Index), which is an equity index that is designed to measure the performance of large capitalization stocks in the U.S.); and
|
· |
the iShares® MSCI China ETF (50.00%), an exchange traded fund that seeks to track the investment results of the MSCI China Index (its Underlying Index), which is an equity index composed of Chinese equities that are available to international investors.
|
· |
If the Final Basket Value is greater than the Initial
Basket Value, the maturity payment amount per security will equal the lesser of:
|
(a) $1,000 + ($1,000 x
|
Final Basket
Value – Initial Basket Value
|
x Participation Rate); and
|
|
Initial Basket
Value
|
· |
If the Final Basket Value is equal to or less than the Initial Basket Value but greater
than or equal to the Threshold Value, the maturity payment amount per security will equal $1,000.
|
· |
If the Final Basket Value is less than the Threshold
Value, the maturity payment amount per security will equal:
|
$1,000 -
|
(
|
$1,000 X
|
Initial Basket Value – Final Basket Value |
)
|
||
Initial Basket Value |
Maturity payment amount =
(per security)
|
$1,000.00 - $1,000.00 X
|
( |
100.00 – 70.00
|
) |
= $700.00
|
100.00 |
Maturity payment amount (per security) = $1,000.00 + ($1,000.00 X
|
110.00 – 100.00
|
|
X125%)
|
|
100.00
|
= $1,000.00 + $125.00
|
= $1,125.00
|
Example 4—The hypothetical Final Basket Value is 150% of the Initial Basket Value:
Hypothetical Final Basket Value: 150.00
Maturity payment amount (per security) = $1,000.00 + ($1,000.00 X
|
150.00 – 100.00
|
X 125%)
|
||
100.00
|
=
|
$1,000.00 +
|
$625.00
|
= $1,625.00 > $1,505.00
|
Since the hypothetical Final Basket Value is greater than the Initial Basket Value, you would receive the principal amount of $1,000 plus 125% times the amount of the percentage change in the value of the Basket times $1,000, subject to the hypothetical maximum maturity payment amount of $1,505.00 (the mid-point of the range of maximum maturity payment amounts set forth in this pricing supplement). Although the calculation of the maturity payment amount without taking into account the hypothetical maximum maturity payment amount would generate a result of $1,625.00 per security, your maturity payment amount would be limited to $1,505.00 per security, representing a 50.50% total return, because the payment on the securities at maturity may not exceed the hypothetical maximum maturity payment amount.
· |
the hypothetical percentage change from the Initial Basket Value to the hypothetical Final Basket Value;
|
· |
the hypothetical maturity payment amount per security; and
|
· |
the hypothetical pre-tax total rate of return to beneficial owners of the securities.
|
Hypothetical
Final Basket Value
|
Hypothetical Percentage
Change from the Initial Basket
Value to the Hypothetical
Final Basket Value
|
Hypothetical Maturity
Payment Amount per
Security(1)
|
Hypothetical Pre-
Tax Total Rate of
Return on the
Securities
|
||||||||
0.00
|
-100.00%
|
$0.00
|
-100.00%
|
||||||||
10.00
|
-90.00%
|
$100.00
|
-90.00%
|
||||||||
25.00
|
-75.00%
|
$250.00
|
-75.00%
|
||||||||
50.00
|
-50.00%
|
$500.00
|
-50.00%
|
||||||||
55.00
|
-45.00%
|
$550.00
|
-45.00%
|
||||||||
60.00
|
-40.00%
|
$600.00
|
-40.00%
|
||||||||
65.00
|
-35.00%
|
$650.00
|
-35.00%
|
||||||||
70.00
|
-30.00%
|
$700.00
|
-30.00%
|
||||||||
75.00
|
-25.00%
|
$750.00
|
-25.00%
|
||||||||
80.00
|
(2)
|
-20.00%
|
$1,000.00
|
0.00%
|
|||||||
90.00
|
-10.00%
|
$1,000.00
|
0.00%
|
||||||||
95.00
|
-5.00%
|
$1,000.00
|
0.00%
|
||||||||
100.00
|
(3)
|
0.00%
|
$1,000.00
|
0.00%
|
|||||||
105.00
|
5.00%
|
$1,062.50
|
6.25%
|
||||||||
110.00
|
10.00%
|
$1,125.00
|
12.50%
|
||||||||
120.00
|
20.00%
|
$1,250.00
|
25.00%
|
||||||||
130.00
|
30.00%
|
$1,375.00
|
37.50%
|
||||||||
140.00
|
40.00%
|
$1,500.00
|
50.00%
|
||||||||
140.40
|
40.40%
|
$1,505.00
|
50.50%
|
||||||||
145.00
|
45.00%
|
$1,505.00
|
50.50%
|
||||||||
150.00
|
50.00%
|
$1,505.00
|
50.50%
|
(1) |
Based on a hypothetical maximum maturity payment amount of $1,505.00 (the mid-point of the range of maximum maturity payment amounts set forth in this pricing
supplement).
|
(2) |
This is the Threshold Value.
|
(3) |
This is the Initial Basket Value.
|
· |
Prospectus dated September 7, 2018:
|
· |
Prospectus Supplement dated September 7, 2018:
|
· |
the volatility (frequency and magnitude of changes in the price) of each basket component and, in particular, market expectations regarding the volatility of the
basket components;
|
· |
market interest rates in the U.S. and in the relevant markets outside of the U.S.;
|
· |
the dividend yields of the common stocks held by the basket components;
|
· |
our creditworthiness, as perceived in the market;
|
· |
changes that affect the basket components, such as additions, deletions or substitutions;
|
· |
the time remaining to maturity;
|
· |
currency exchange rates (since the MCHI includes securities that are not quoted in U.S. dollars); and
|
· |
geopolitical, economic, financial, political, regulatory or judicial events as well as other conditions may affect the common stocks held by the basket components,
or the market price of shares of the basket components themselves.
|
Issuer:
|
Royal Bank of Canada
|
Specified Currency:
|
U.S. dollars
|
Principal Amount:
|
$1,000 per security
|
Aggregate Principal Amount:
|
$·
|
Agent:
|
Wells Fargo Securities, LLC
|
The agent may make sales through its affiliates or selling agents.
|
|
Agent Acting in the Capacity of:
|
Principal
|
Pricing Date:
|
March 28, 2019
|
Original Issue Date:
|
April 2, 2019
|
Maturity Date:
|
April 4, 2022, subject to postponement as described below. The maturity date will be a business day. If the maturity date
would otherwise be a date that is not a business day, the maturity date will be postponed to the next succeeding date that is a business day and no interest will accrue or be payable as a result of that postponement.
|
Valuation Date:
|
March 28, 2022. If such day is not a trading day with respect to either basket component, the valuation date for each
basket component will be postponed to the next succeeding trading day that is a trading day with respect to each basket component. If a market disruption event (as defined under “—Market Disruption Events” below) occurs or is continuing with
respect to a basket component on the valuation date, then the valuation date for such basket component will be postponed to the first succeeding trading day for such basket component on which a market disruption event for such basket
component has not occurred and is not continuing; however, if such first succeeding trading day has not occurred as of the eighth trading day for such basket component after the originally scheduled valuation date, that eighth trading day
shall be deemed to be the valuation date for such basket component. If the valuation date has been postponed eight trading days for a basket component after the originally scheduled valuation date and a market disruption event occurs or is
continuing with respect to such basket component on such eighth trading day, the calculation agent will determine the closing price of such basket component on such eighth trading day based on its good faith estimate of the value of the
shares (or other applicable securities) of such basket component as of the close of trading on such eighth trading day. Notwithstanding a postponement of the valuation date for a particular basket component due to a market disruption event
with respect to such basket component, the originally scheduled valuation date will remain the valuation date for any basket component not affected by a market disruption event.
If the valuation date is postponed as to one or both basket components, then the maturity date of the securities will be
postponed by an equal number of business days.
|
The Basket:
|
The return on the securities is linked to the performance of the following two basket components, having the weightings
noted in parentheses: the SPDR® S&P® 500 ETF Trust (50.00%); and the iShares® MSCI China ETF (50.00%).
|
Payment at Maturity:
|
At maturity, for each security you own, you will receive a cash payment equal to the maturity payment amount. The maturity payment amount to which you will be entitled depends on the change in the value of the Basket based on the Final Basket
|
Value relative to the Initial Basket Value, and whether or not the Final Basket Value is below the Threshold Value.
|
||||
The maturity payment amount
for each security will be determined by the calculation agent as described below:
· If the Final Basket Value is greater than the Initial Basket Value, the
maturity payment amount per security will equal the lesser of:
|
||||
(a) $1,000 + ($1,000 x
|
Final Basket Value – Initial Basket Value
|
x Participation Rate); and
|
||
Initial Basket Value
|
||||
(b) the maximum maturity payment amount
· If the Final Basket Value is less than or equal to the Initial Basket Value but greater than or equal to the Threshold Value, the maturity payment amount per security will equal $1,000.
· If the Final Basket Value is less than the Threshold Value, the maturity payment amount per security will equal:
|
||||
$1,000 – ( $1,000 x
|
Initial Fund Value – Final Basket Value
|
)
|
||
Initial Basket Value
|
||||
If the Final Basket Value is less than the Threshold Value, you will lose more than
20%, and may lose up to 100%, of your principal. If the Final Basket Value is zero, the maturity payment amount will be $0.00 per security.
|
||||
Participation Rate:
|
125%
|
|||
Maximum Maturity Payment
Amount:
|
[$1,480- $1,530] (to be determined on the pricing date)
|
|||
Initial Basket Value:
|
100
|
|||
Final Basket Value:
|
The Final Basket Value will be calculated based on the weighted returns of the basket components and will be equal to
the product of (i) 100 and (ii) an amount equal to 1 plus the sum of: (A) 50.00% of the component return of the SPDR® S&P® 500 ETF Trust; and (B) 50.00% of the component return of the iShares® MSCI China
ETF.
|
|||
Threshold Value:
|
80, which is 80% of the Initial Basket Value.
|
|||
Component Return:
|
The component return of each basket component will be equal to:
Final Component Price – Initial Component
Price
Initial Component Price
where,
· the Initial Component Price will be the fund closing price of the basket component on the pricing date, and
· the Final Component Price will be the fund closing price on the valuation date multiplied by its adjustment factor on that day.
|
|||
Closing Price:
|
The “closing price” with respect to one share of a basket component (or one unit of any other
security for which a closing price must be determined) on any trading day means the official closing price on such day published by the principal United States securities exchange registered under the Securities Exchange Act of 1934, as
amended, on which such basket component (or any such other security) is listed or admitted to trading.
|
|||
Fund Closing Price:
|
With respect to a basket component, the “fund closing price” on any trading day means the product of
(i) the closing price of one share of such basket component (or one unit of any other security for which a fund closing price must be determined) on such trading day and (ii) the adjustment factor applicable to such basket component on such
trading day.
|
Market Disruption Events:
|
A “market disruption event”, means, with respect to a basket component, any of the following events as determined by the
calculation agent in its sole discretion:
· the occurrence or existence of a material suspension of or limitation imposed on trading by the relevant stock exchange (as defined below) or otherwise relating to the shares
(or other applicable securities) of such basket component or any successor basket component on the relevant stock exchange at any time during the one-hour period that ends at the close of trading on such day, whether by reason of movements in
price exceeding limits permitted by such relevant stock exchange or otherwise;
· the occurrence or existence of a material suspension of or limitation imposed on trading by any related futures or options exchange (as defined below) or otherwise in futures
or options contracts relating to the shares (or other applicable securities) of such basket component or any successor basket component on any related futures or options exchange at any time during the one-hour period that ends at the close
of trading on that day, whether by reason of movements in price exceeding limits permitted by the related futures or options exchange or otherwise;
· the occurrence or existence of any event, other than an early closure, that materially disrupts or impairs the ability of market participants in general to effect transactions
in, or obtain market values for, shares (or other applicable securities) of such basket component or any successor basket component on the relevant stock exchange at any time during the one-hour period that ends at the close of trading on
that day;
· the occurrence or existence of any event, other than an early closure, that materially disrupts or impairs the ability of market participants in general to effect transactions
in, or obtain market values for, futures or options contracts relating to shares (or other applicable securities) of such basket component or any successor basket component on any related futures or options exchange at any time during the
one-hour period that ends at the close of trading on that day;
·
the closure of the relevant stock exchange or any related futures or options exchange with respect to such basket component or any successor basket
component prior to its scheduled closing time unless the earlier closing time is announced by the relevant stock exchange or related futures or options exchange, as applicable, at least one hour prior to the earlier of (1) the actual closing
time for the regular trading session on such relevant stock exchange or related futures or options exchange, as applicable, and (2) the submission deadline for orders to be entered into the relevant stock exchange or related futures or
options exchange, as applicable, system for execution at the close of trading on that day; or
·
the relevant stock exchange or any related futures or options exchange with respect to such basket component or any successor basket component fails to open
for trading during its regular trading session.
For purposes of determining whether a market disruption event has occurred with respect to a basket component:
(1) “close of trading” means the scheduled closing time of the relevant stock exchange with
respect to such basket component or any successor basket component; and
(2)
the “scheduled closing time” of the relevant stock exchange or
any related futures or options exchange on any trading day for such basket
|
component or any successor basket component means the scheduled weekday closing time of such
relevant stock exchange or related futures or options exchange on such trading day, without regard to after hours or any other trading outside the regular trading session hours.
|
|
Adjustment Factor:
|
The “adjustment factor” means, with respect to a share of a basket component (or one unit of any
other security for which a fund closing price must be determined), 1.0, subject to adjustment in the event of certain events affecting the shares of such basket component. See “—Anti-dilution Adjustments Relating to a Fund” below.
|
Anti-Dilution Adjustments Relating
to a Fund:
|
The calculation agent will adjust the adjustment factor with respect to a basket component as specified below if any of the
events specified below occurs with respect to such basket component and the effective date or ex-dividend date, as applicable, for such event is after the pricing date and on or prior to the valuation date for such basket component.
The adjustments specified below do not cover all events that could affect a basket component, and there may be other events
that could affect a basket component for which the calculation agent will not make any such adjustments, including, without limitation, an ordinary cash dividend. Nevertheless, the calculation agent may, in its sole discretion, make
additional adjustments to any terms of the securities upon the occurrence of other events that affect or could potentially affect the market price of, or shareholder rights in, a basket component, with a view to offsetting, to the extent
practical, any such change, and preserving the relative investment risks of the securities. In addition, the calculation agent may, in its sole discretion, make adjustments or a series of adjustments that differ from those described herein
if the calculation agent determines that such adjustments do not properly reflect the economic consequences of the events specified in this pricing supplement or would not preserve the relative investment risks of the securities. All
determinations made by the calculation agent in making any adjustments to the terms of the securities, including adjustments that are in addition to, or that differ from, those described in this pricing supplement, will be made in good
faith and a commercially reasonable manner, with the aim of ensuring an equitable result. In determining whether to make any adjustment to the terms of the securities, the calculation agent may consider any adjustment made by the Options
Clearing Corporation or any other equity derivatives clearing organization on options contracts on the affected basket component.
For any event described below, the calculation agent will not be required to adjust the adjustment factor for a basket
component unless the adjustment would result in a change to such adjustment factor then in effect of at least 0.10%. The adjustment factor resulting from any adjustment will be rounded up or down, as appropriate, to the nearest one-hundred
thousandth.
(A) Stock Splits and Reverse Stock Splits
If a stock split or reverse stock split has occurred with respect to a basket component, then once
such split has become effective, the adjustment factor for such basket component will be adjusted to equal the product of the prior
adjustment factor for such basket component and the number of securities which a holder of one share (or other applicable security) of such basket component before the effective date of such stock split or reverse stock split would have
owned or been entitled to receive immediately following the applicable effective date.
(B) Stock Dividends
If a dividend or distribution of shares (or other applicable securities) of a basket component has
been made by such basket component ratably
|
to all holders of record of such shares (or other applicable security), then the adjustment factor for such
basket component will be adjusted on the ex-dividend date to equal the prior adjustment factor for such basket component plus the product
of the prior adjustment factor and the number of shares (or other applicable security) of such basket component which a holder of one share (or other applicable security) of such basket component before the ex-dividend date would have owned
or been entitled to receive immediately following that date; provided, however, that no adjustment will be made for a distribution for which the number of securities of such basket component paid or distributed is based on a fixed cash
equivalent value. For example, if a one-to-one share dividend is made as to a basket component, its adjustment factor will be changed from 1 to 2.
(C) Extraordinary Dividends
If an extraordinary dividend (as defined below) has occurred with respect to a basket component, then
the adjustment factor for such basket component will be adjusted on the ex-dividend date to equal the product of the prior adjustment
factor for such basket component and a fraction, the numerator of which is the closing price per share (or other applicable security) of such basket component on the trading day preceding the ex-dividend date, and the denominator of which
is the amount by which the closing price per share (or other applicable security) of such basket component on the trading day preceding the ex-dividend date exceeds the extraordinary dividend amount (as defined below).
For purposes of determining whether an extraordinary dividend has occurred:
(1) “extraordinary dividend” means any cash dividend or distribution (or portion thereof) that the calculation agent determines, in its
sole discretion, is extraordinary or special; and
(2) “extraordinary dividend amount” with respect to an extraordinary dividend for the securities of a basket component will equal the
amount per share (or other applicable security) of such basket component of the applicable cash dividend or distribution that is attributable to the extraordinary dividend, as determined by the calculation agent in its sole discretion.
A distribution on the securities of a basket component described below under the section entitled
“—Reorganization Events” below that also constitutes an extraordinary dividend will only cause an adjustment pursuant to that “—Reorganization Events” section.
(D) Other Distributions
If a basket component declares or makes a distribution to all holders of the shares (or other
applicable security) of such basket component of any non-cash assets, excluding dividends or distributions described under the section entitled “—Stock Dividends” above, then the calculation agent may, in its sole discretion, make such
adjustment (if any) to the adjustment factor as it deems appropriate in the circumstances. If the calculation agent determines to make an adjustment pursuant to this paragraph, it will do so with a view to offsetting, to the extent
practical, any change in the economic position
|
of a holder of the securities that results solely from the applicable event.
(E) Reorganization Events
If a basket component, or any successor basket component, is subject to a merger, combination,
consolidation or statutory exchange of securities with another exchange traded fund, and such basket component is not the surviving entity (a “reorganization event”),
then, on or after the date of such event, the calculation agent shall, in its sole discretion, make an adjustment to the adjustment factor for such basket component or the method of determining the maturity payment amount or any other terms
of the securities as the calculation agent determines appropriate to account for the economic effect on the securities of such event, and determine the effective date of that adjustment. If the calculation agent determines that no
adjustment that it could make will produce a commercially reasonable result, then the calculation agent may deem such event a liquidation event (as defined below).
|
|
Liquidation Events:
|
If a basket component is de-listed, liquidated or otherwise terminated (a “liquidation event”), and a successor or substitute exchange traded fund exists that the calculation agent determines, in its sole discretion, to be comparable to such basket component, then,
upon the calculation agent’s notification of that determination to the Trustee and to us, any subsequent fund closing price for such basket component will be determined by reference to the fund closing price of such successor or substitute
exchange traded fund (such exchange traded fund being referred to herein as a “successor basket component”), with such adjustments as the calculation
agent determines are appropriate to account for the economic effect of such substitution on holders of the securities.
If a basket component undergoes a liquidation event prior to, and such liquidation event is continuing on, the date that
any fund closing price of such basket component is to be determined and the calculation agent determines that no successor basket component is available at such time, then the calculation agent will, in its discretion, calculate the fund
closing price for such basket component on such date by a computation methodology that the calculation agent determines will as closely as reasonably possible replicate such basket component, provided that if the calculation agent
determines in its discretion that it is not practicable to replicate such basket component (including but not limited to the instance in which the sponsor of an Underlying Index discontinues publication of the relevant Underlying Index),
then the calculation agent will calculate the fund closing price for such basket component in accordance with the formula last used to calculate such fund closing price before such liquidation event, but using only those securities that
were held by such basket component immediately prior to such liquidation event without any rebalancing or substitution of such securities following such liquidation event.
If a successor basket component is selected or the calculation agent calculates the fund closing price as a substitute for
a basket component, such successor basket component or fund closing price will be used as a substitute for such basket component for all purposes, including for purposes of determining whether a market disruption event exists with respect
to such basket component. Notwithstanding these alternative arrangements, a liquidation event with respect to a basket component may adversely affect the value of the securities.
If any event is both a reorganization event and a liquidation event, such event will be treated as a reorganization event
for purposes of the securities unless the calculation agent makes the determination referenced in the last sentence of the section entitled
|
“—Anti-Dilution Adjustments Relating to a Fund: Reorganization Events” above.
|
|
Alternate Calculation:
|
If at any time the method of calculating a basket component or a successor basket component, or the related Underlying
Index, is changed in a material respect, or if a basket component or a successor basket component is in any other way modified so that such basket component does not, in the opinion of the calculation agent, fairly represent the price of
the securities of such basket component or such successor basket component had such changes or modifications not been made, then the calculation agent may, at the close of business in New York City on the date that any fund closing price is
to be determined, make such calculations and adjustments as, in the good faith judgment of the calculation agent, may be necessary in order to arrive at a closing price of a basket component comparable to such basket component or such
successor basket component, as the case may be, as if such changes or modifications had not been made, and calculate the fund closing price of such basket component and the maturity payment amount with reference to such adjusted closing
price of such basket component or such successor basket component, as applicable.
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Calculation Agent:
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RBC Capital Markets, LLC will serve as the calculation agent. All determinations made by the calculation agent will be
at the sole discretion of the calculation agent and, absent a determination of a manifest error, will be conclusive for all purposes and binding on the holders and beneficial owners of the securities.
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Trustee:
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The Bank of New York Mellon
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Business Day:
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For purposes of the securities, a business day means a Monday, Tuesday, Wednesday, Thursday or Friday that is not a
day on which banking institutions in The City of New York generally are authorized or obligated by law, regulation or executive order to close.
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Trading Day:
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A “trading day” with respect to a basket component means a day, as determined by the calculation agent, on which the
relevant stock exchange and each related futures or options exchange with respect to such basket component or any successor thereto, if applicable, are scheduled to be open for trading for their respective regular trading sessions.
The “relevant stock exchange” for a basket component means the primary exchange or quotation system on which shares
(or other applicable securities) of such basket component are traded, as determined by the calculation agent.
The “related futures or options exchange” for a basket component means each exchange or quotation system where trading
has a material effect (as determined by the calculation agent) on the overall market for futures or options contracts relating to such basket component.
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Additional Amounts:
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We will pay any amounts to be paid by us on the securities without deduction or withholding for, or on account of, any
and all present or future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings (taxes) now or
hereafter imposed, levied, collected, withheld or assessed by or on behalf of Canada or any Canadian political subdivision or authority that has the power to tax, unless the deduction or withholding is required by law or by the
interpretation or administration thereof by the relevant governmental authority. At any time a Canadian taxing jurisdiction requires us to deduct or withhold for or on account of taxes from any payment made under or in respect of the
securities, we will pay such additional amounts (Additional Amounts) as may be necessary so that the net amounts received by each holder
(including Additional Amounts), after such deduction or withholding, will not be less than the amount the holder would have received had no such deduction or withholding been required.
However, no Additional Amounts will be payable with respect to a payment made to a holder of a security or of a right
to receive payments in respect thereto (a Payment
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Recipient), which
we refer to as an Excluded Holder, in respect of any taxes imposed because the beneficial owner or Payment Recipient:
(i) is someone with whom we do not deal at arm’s length (within the meaning of the Income Tax Act (Canada)) at the time of making such payment;
(ii) is subject to such taxes by reason of its being connected presently or formerly with Canada or any province or territory thereof otherwise than by reason of the holder’s activity in connection with purchasing the
securities, the holding of securities or the receipt of payments thereunder;
(iii) is, or does not deal at arm’s length with a person who is, a specified shareholder (within the meaning of subsection
18(5) of the Income Tax Act (Canada)) of Royal Bank of Canada (generally a person will be a specified shareholder for this purpose if that person, either alone or together with persons with whom the person does not deal at arm’s length,
owns 25% or more of (a) our voting shares, or (b) the fair market value of all of our issued and outstanding shares);
(iv) presents such security for payment (where presentation is required) more than 30 days after the relevant date (except to the extent that the holder thereof would have been entitled to such Additional Amounts on presenting
a security for payment on the last day of such 30 day period); for this purpose, the relevant date in relation to any payments on any
security means:
a. the due date for payment thereof, or
b. if the full amount of the monies payable on such date has not been received by the Trustee on or prior to such due date, the date on which the full amount of such monies has been received and notice to that effect is given to holders
of the securities in accordance with the Indenture;
(v) could lawfully avoid (but has not so avoided) such withholding or deduction by complying, or requiring that any agent comply with, any statutory requirements necessary to establish qualification for an exemption from
withholding or by making, or requiring that any agent make, a declaration of non-residence or other similar claim for exemption to any relevant tax authority; or
(vi) is subject to deduction or withholding on account of any tax, assessment, or other governmental charge that is imposed or withheld by reason of the application of Section 1471 through 1474 of the United States Internal
Revenue Code of 1986, as amended (Code) (or any successor provisions), any regulation, pronouncement, or agreement thereunder, official
interpretations thereof, or any law implementing an intergovernmental approach thereto, whether currently in effect or as published and amended from time to time.
For the avoidance of doubt, we will not have any obligation to pay any holders Additional Amounts on any tax which is
payable otherwise than by deduction or withholding from payments made under or in respect of the securities at maturity.
We will also make such withholding or deduction and remit the full amount deducted
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or withheld to the relevant authority in accordance with applicable law. We will furnish to the Trustee, within 30
days after the date the payment of any taxes is due pursuant to applicable law, certified copies of tax receipts evidencing that such payment has been made or other evidence of such payment satisfactory to the Trustee. We will indemnify
and hold harmless each holder of the securities (other than an Excluded Holder) and upon written request reimburse each such holder for the amount of (x) any taxes so levied or imposed and paid by such holder as a result of payments made
under or with respect to the securities, and (y) any taxes levied or imposed and paid by such holder with respect to any reimbursement under (x) above, but excluding any such taxes on such holder’s net income or capital.
For additional information, see the section entitled “Tax Consequences—Canadian Taxation” in the accompanying
prospectus.
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Authorized Denominations:
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$1,000 and integral multiples of $1,000 in excess thereof.
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Form of Securities:
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Book-entry
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Listing:
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The securities will not be listed on any securities exchange.
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Failure to Pay Maturity Payment
Amount When Due:
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In the event we fail to pay the maturity payment amount on the maturity date, any overdue payment in respect of the
maturity payment amount of the securities on the maturity date will bear interest until the date upon which all sums due in respect of such securities are received by or on behalf of the relevant holder, at a rate per annum which is the
rate for deposits in U.S. dollars for a period of six months which appears on the Reuters Page LIBOR01 (or any replacement page or pages for the purpose of displaying prime rates or base lending rates of major U.S. banks) as of 11:00 a.m.
(London time) on the first business day following that failure to pay. That rate will be determined by the calculation agent. If interest is required to be calculated for a period of less than one year, it will be calculated on the basis
of a 360-day year consisting of the actual number of days in the period.
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Events of Default and Acceleration:
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If the maturity of the securities is accelerated upon an event of default under the Indenture, the amount payable upon
acceleration will be determined by the calculation agent. The amount will be the maturity payment amount, calculated as if the date of declaration of acceleration were the valuation date.
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defining the equity universe;
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determining the market investable equity universe for each market;
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determining market capitalization size segments for each market;
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applying index continuity rules for the MSCI Standard Index;
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creating style segments within each size segment within each market; and
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securities under the Global Industry Classification Standard (the “GICS”).
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