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Royal Bank of Canada
Market Linked Securities
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Filed Pursuant to Rule 433
Registration No. 333-227001
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Market Linked Securities – Leveraged Upside Participation to a Cap and Fixed Buffered Downside Principal at
Risk Securities Linked to the Energy Select Sector SPDR® Fund due August 5, 2022
Final Term Sheet to Pricing Supplement No. WFC132 dated January 31, 2019
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Final Terms
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Issuer
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Royal Bank of Canada
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Term
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Approximately 3.5 years
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Fund
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Energy Select Sector SPDR® Fund
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Pricing Date
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January 31, 2019
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Original Issue Date
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February 5, 2019
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Principal Amount
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$1,000 per security (each security will be offered at an initial public offering price of $1,000)
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Payment at
Maturity
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See “How the maturity payment amount is calculated” on page 3
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Maturity Date
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August 5, 2022
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Initial Fund Price
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$63.78, the closing price of the Fund on the pricing date
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Final Fund Price
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The fund closing price of the Fund on the valuation date
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Maximum Maturity Payment Amount
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$1,480.00
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Buffer Price
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$54.213, which is 85% of the Initial Fund Price
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Participation Rate
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150%
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Valuation Date
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July 29, 2022
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Calculation Agent
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RBC Capital Markets, LLC, a wholly-owned subsidiary of the issuer
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Denominations
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$1,000 and any integral multiple of $1,000
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Underwriting
Discount and
Commission |
3.46%, of which dealers, including Wells Fargo Advisors, LLC (“WFA”), may receive a selling concession of 2.00% and WFA will receive a distribution expense fee of 0.075%
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CUSIP
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78013XVA3
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Investment description
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Linked to the Energy Select Sector SPDR® Fund
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Unlike ordinary debt securities, the securities do not pay interest or repay a fixed amount of principal at maturity. Instead, the securities provide for a payment at maturity
that may be greater than, equal to or less than the initial public offering price of the securities, depending on the performance of the Fund from its Initial Fund Price to its Final Fund Price.
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The payment at maturity will reflect the following terms:
o If the price of the Fund increases:
You will receive the initial public offering price plus 150% participation in the upside performance of the Fund, subject to a maximum total return at
maturity of 148% of the initial public offering price
o If the price of the Fund decreases but the decrease is not more than 15%:
You will be repaid the initial public offering price
o If the price of the Fund decreases by more than 15%:
You will receive less than the initial public offering price and will be exposed on a 1-to-1 basis to declines in the price of the Fund beyond the
Buffer Price. In this case, you will lose up to 85% of the initial public offering price of your securities
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Investors may lose up to 85% of the initial public offering price
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All payments on the securities are subject to the credit risk of Royal Bank of Canada, and you will have no ability to pursue the Fund or any securities held by the Fund for
payment; if Royal Bank of Canada defaults on its obligations, you could lose some or all of your investment
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No periodic interest payments or dividends
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No exchange listing; designed to be held to maturity
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The issuer’s initial estimated value of the securities as of the date of the accompanying pricing supplement is $946.66 per $1,000 in
principal amount, which is less than the public offering price. The market value of the securities at any time will reflect many factors, cannot be predicted with accuracy, and may be less than this amount. See “Risk Factors” and
“Supplemental Plan of Distribution – Structuring the Securities” in the accompanying pricing supplement for further information.
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The securities have complex features and investing in the securities involves risks not associated with an investment in
conventional debt securities. See “Selected Risk Considerations” in this term sheet and “Risk Factors” in the accompanying pricing supplement.
This final term sheet should be read in conjunction with the accompanying pricing supplement, prospectus supplement and prospectus.
NOT A BANK DEPOSIT AND NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY
Hypothetical payout profile
The profile to the right is based on the maximum maturity payment amount of $1,480.00 per $1,000 security the
participation rate of 150% and the Buffer Price equal to 85% of the Initial Fund Price.
This graph has been prepared for purposes of illustration only. Your actual return will depend on the actual Final
Fund Price and whether you hold your securities to maturity.
Hypothetical returns
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Hypothetical
Final Fund Price
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Percentage Change from the
Hypothetical Initial Fund
Price to the Hypothetical
Final Fund Price
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Hypothetical Maturity
Payment Amount per
Security(1)
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Hypothetical Pre-
Tax Total Rate of
Return on the
Securities
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$0.00
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-100.00%
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$150.00
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-85.00%
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$10.00
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-90.00%
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$250.00
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-75.00%
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$30.00
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-70.00%
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$450.00
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-55.00%
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$40.00
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-60.00%
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$550.00
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-45.00%
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$50.00
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-50.00%
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$650.00
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-35.00%
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$60.00
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-40.00%
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$750.00
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-25.00%
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$70.00
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-30.00%
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$850.00
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-15.00%
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$80.00
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-20.00%
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$950.00
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-5.00%
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$85.00
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(2)
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-15.00%
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$1,000.00
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0.00%
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$90.00
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-10.00%
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$1,000.00
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0.00%
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$95.00
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-5.00%
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$1,000.00
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0.00%
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$100.00
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(3)
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0.00%
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$1,000.00
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0.00%
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$105.00
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5.00%
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$1,075.00
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7.50%
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$110.00
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10.00%
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$1,150.00
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15.00%
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$115.00
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15.00%
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$1,225.00
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22.50%
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$120.00
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20.00%
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$1,300.00
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30.00%
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$130.00
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30.00%
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$1,450.00
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45.00%
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$132.00
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32.00%
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$1,480.00
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48.00%
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$135.00
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35.00%
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$1,480.00
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48.00%
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$140.00
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40.00%
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$1,480.00
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48.00%
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$150.00
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50.00%
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$1,480.00
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48.00%
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(1)
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Based on the maximum maturity payment amount of $1,480.00.
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This is the hypothetical Buffer Price.
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| (3) |
This is the hypothetical Initial Fund Price.
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2
How the maturity payment amount is calculated
The maturity payment amount will be determined as follows:
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If the Final Fund Price is greater than the Initial Fund Price, the maturity
payment amount per security will equal the lesser of:
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(i)
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$1,000 + [$1,000 ×
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[
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Final Fund Price - Initial Fund Price
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×Participation Rate]; and
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Initial Fund Price
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the maximum maturity payment amount
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If the Final Fund Price is equal to or less than the Initial Fund Price but greater than or equal to the Buffer Price, the maturity payment amount per security will equal the issue price of $1,000.00
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If the Final Fund Price is less than the Buffer Price, the maturity payment amount per security
will equal:
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$1,000 -
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[$1,000 ×
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Buffer Price-Final Fund Price
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]
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Initial Fund Price)
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In such a case, you will lose up to 85% of your principal.
Energy Select Sector SPDR® Fund daily closing prices*
*The graph above sets forth the daily closing prices of the Fund for the period from January 1, 2014
to January 31, 2019. The closing price on January 31, 2019 was $63.78. The historical performance of the Fund is not an indication of its future performance during the term of the securities.
Selected risk considerations
The risks set forth below are discussed in detail in the “Risk Factors” section in the accompanying pricing supplement. Please review those
risk disclosures carefully.
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Your investment may result in a loss of up to 85% of your principal
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You will not receive interest payments on the securities
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Your yield may be lower than the yield on a standard debt security of comparable maturity
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Your return is limited and will not reflect the return of owning the Fund or the common stocks held by the Fund
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3
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Owning the securities is not the same as owning the shares of the Fund or the common stocks held by the Fund
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There may not be an active trading market for the securities
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The amount to be paid at maturity is not linked to the price of the Fund at any time other than the valuation date
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Many factors affect the market value of the securities
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The correlation between the performance of the Fund and the performance of the Underlying Index may be imperfect
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An investment in the securities is subject to risks associated with investing in stocks in the energy sector
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The securities will be debt obligations of Royal Bank of Canada. No other company or entity will be responsible for payments under the securities
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The policies of the Fund investment adviser and changes that affect the Underlying Index could affect the amount payable on the securities and their market value
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We have no affiliation with the Index Sponsor and will not be responsible for any actions taken by the Index Sponsor
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Historical prices of the Fund should not be taken as an indication of the future prices of the Fund during the term of the securities
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Hedging transactions may affect the return on the securities
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Our initial estimated value of the securities is less than the initial public offering price
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The price, if any, at which you may be able to sell your securities prior to maturity may be less than the initial public offering price and our initial estimated value
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The initial estimated value of the securities is an estimate only, calculated as of the time the terms of the securities were set
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Potential conflicts of interest could arise
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Anti-dilution adjustments relating to the shares of the Fund do not address every event that could affect such shares
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The calculation agent may postpone the valuation date and, therefore, determination of the Final Fund Price and the maturity date if a market disruption event occurs on the
valuation date
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There are potential conflicts of interest between you and the calculation agent
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The tax treatment of the securities is uncertain and gain on the securities may be treated as ordinary income under the constructive ownership rules
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Not suitable for all investors
Investment suitability must be determined individually for each investor. The securities described herein are not a suitable
investment for all investors. In particular, no investor should purchase the securities unless they understand and are able to bear the associated market, liquidity and yield risks. Unless market conditions and other relevant factors change
significantly in your favor, a sale of the securities prior to maturity is likely to result in sale proceeds that are substantially less than the initial public offering price per security. Royal Bank of Canada, Wells Fargo Securities, LLC and
their respective affiliates are not obligated to purchase the securities from you at any time prior to maturity.
The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this
communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these
documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling your financial advisor or by
calling Royal Bank of Canada at 1-877-688-2301.
Consult your tax advisor
Investors should review carefully the accompanying pricing supplement, prospectus supplement and prospectus and consult
their tax advisors regarding the application of the U.S. federal income tax laws to their particular circumstances, as well as any tax consequences arising under the laws of any state, local or foreign jurisdiction.
“iShares®” and “BlackRock®” are registered trademarks of BlackRock, Inc. (BlackRock) or its subsidiaries. The
securities are not sponsored, endorsed, sold, or promoted by BlackRock, or by any of the iShares Funds. Neither BlackRock nor the iShares Funds make any representations or warranties to the owners of the securities or any member of the public
regarding the advisability of investing in the securities. Neither BlackRock nor the iShares Funds shall have any obligation or liability in connection with the registration, operation, marketing, trading, or sale of the securities or in
connection with our use of information about the Underlying Index or any of the iShares Funds.
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