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Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-259205
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Pricing Supplement
Dated September 25, 2023
To the Product Prospectus Supplement ERN-EI-1, Prospectus Supplement and Prospectus, Each Dated September 14,
2021
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$2,030,000
Digital Notes with Barrier
Linked to the Russell 2000® Index,
Due March 28, 2025
Royal Bank of Canada
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Reference Asset
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Initial Level
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Barrier Level
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Russell 2000® Index (“RTY”)
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1,784.240
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1,338.180, which is 75.00% of its Initial Level
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If the Final Level of the Reference Asset is greater than or equal to 75% of its Initial Level (the “Barrier Level”), the Notes provide a fixed payment of 112.40% of the principal amount.
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If the Final Level of the Reference Asset is less than the Barrier Level, investors will lose 1% of the principal amount of the Notes for each 1% decrease from the Initial Level to the Final Level.
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Any payments on the Notes are subject to our credit risk.
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The Notes do not pay interest.
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The Notes will not be listed on any securities exchange.
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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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$2,030,000.00
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Underwriting discounts and commissions(1)
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1.875%
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$38,062.50
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Proceeds to Royal Bank of Canada
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98.125%
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$1,991,937.50
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Digital Notes with Barrier Linked to the Russell
2000® Index
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Issuer:
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Royal Bank of Canada (the “Bank”)
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Underwriter:
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RBC Capital Markets, LLC (“RBCCM”)
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Reference Asset:
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Russell 2000® Index (RTY)
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Minimum Investment:
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$1,000 and minimum denominations of $1,000 in excess thereof
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Trade Date (Pricing
Date):
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September 25, 2023
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Issue Date:
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September 28, 2023
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Valuation Date:
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March 25, 2025
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Maturity Date:
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March 28, 2025, subject to extension for market and other disruptions, as described in the product prospectus supplement dated September 14, 2021.
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Payment at Maturity (if
held to maturity):
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If the Final Level is greater than or equal to the Barrier Level (that is, the Percentage Change is greater than or equal to
‑25%), then the investor will receive an amount per $1,000 principal amount per Note equal to:
The Digital Payment.
The payment on the Notes will not exceed the Digital Payment.
If the Final Level is less than the Barrier Level (that is, the Percentage Change is between ‑25% and -100%), then the investor
will receive a cash payment equal to:
Principal Amount + (Principal Amount x Percentage Change)
In this case, you could lose all or a substantial portion of the principal amount.
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Percentage Change:
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The Percentage Change, expressed as a percentage, is calculated using the following formula:
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Initial Level:
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The closing level of the Reference Asset on the Trade Date, as set forth on the cover page of this pricing supplement.
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Final Level:
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The closing level of the Reference Asset on the Valuation Date.
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Digital Payment:
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112.40% multiplied by the principal amount ($1,124.00 per $1,000 in principal amount).
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Barrier Percentage:
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25%
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Barrier Level:
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75% of the Initial Level, as set forth on the cover page of this pricing supplement.
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Principal at Risk:
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The Notes are NOT principal protected. You may lose
all or a substantial portion of your principal amount at maturity if the Final Level is less than the Barrier Level.
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Calculation Agent:
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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 pre-paid cash-settled derivative
contract 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 Ashurst LLP, our special U.S. tax
counsel) in the product prospectus supplement dated September 14, 2021 under “Supplemental Discussion of U.S. Federal Income Tax Consequences,” which apply to the Notes.
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Digital Notes with Barrier Linked to the Russell
2000® Index
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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 of your Notes.
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Listing:
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The Notes will not be listed on any securities exchange.
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Clearance and
Settlement:
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DTC global (including through its indirect participants Euroclear and Clearstream, Luxembourg as described under “Ownership and Book-Entry Issuance” in the prospectus dated September 14,
2021).
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Terms Incorporated in
the Master Note:
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All of the terms appearing on the cover page and above the item captioned “Secondary Market” in this section and the terms appearing under the caption “General Terms of the Notes” in the product prospectus
supplement, as modified by this pricing supplement.
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Digital Notes with Barrier Linked to the Russell
2000® Index
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Digital Notes with Barrier Linked to the Russell
2000® Index
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Example 1 —
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Calculation of the Payment at Maturity where the Percentage Change is positive, and exceeds the percentage represented by the Digital Payment.
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Percentage Change:
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25%
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Payment at Maturity:
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$1,000 + ($1,000 x 12.40%) = $1,124.00
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On a $1,000 investment, a 25% Percentage Change results in a Payment at Maturity of $1,124.00, a 12.40% return on the Notes. In this case, the return on the Notes is
less than the Percentage Change of the Reference Asset.
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Example 2 —
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Calculation of the Payment at Maturity where the Percentage Change is negative (but not by more than the Barrier Percentage).
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Percentage Change:
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-8%
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Payment at Maturity:
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At maturity, if the Percentage Change is negative BUT not by more than the Barrier Percentage, then the Payment at Maturity will equal the Digital Payment.
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On a $1,000 investment, a -8% Percentage Change results in a Payment at Maturity of $1,124.00, a 12.40% return on the Notes. In this case, the return on the Notes is
positive, even though the Percentage Change is negative.
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Example 3 —
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Calculation of the Payment at Maturity where the Percentage Change is negative (by more than the Barrier Percentage).
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Percentage Change:
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-60%
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Payment at Maturity:
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$1,000 + ($1,000 x -60%) = $1,000 - $600 = $400
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On a $1,000 investment, a -60% Percentage Change results in a Payment at Maturity of $400, a -60% return on the Notes.
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Digital Notes with Barrier Linked to the Russell
2000® Index
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Hypothetical Final Level
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Payment at Maturity as Percentage
of Principal Amount |
Payment at Maturity
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150.00
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112.40%
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$1,124.00
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140.00
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112.40%
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$1,124.00
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130.00
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112.40%
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$1,124.00
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120.00
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112.40%
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$1,124.00
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112.40
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112.40%
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$1,124.00
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110.00
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112.40%
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$1,124.00
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105.00
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112.40%
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$1,124.00
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100.00
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112.40%
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$1,124.00
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90.00
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112.40%
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$1,124.00
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80.00
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112.40%
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$1,124.00
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75.00
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112.40%
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$1,124.00
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70.00
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70.00%
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$700.00
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60.00
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60.00%
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$600.00
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50.00
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50.00%
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$500.00
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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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0.00%
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$0.00
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Digital Notes with Barrier Linked to the Russell
2000® Index
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You May Not Receive the Full Principal Amount at Maturity — Investors in the Notes could lose all or a substantial
portion of their principal amount if there is a decline in the level of the Reference Asset. If the Final Level is less than the Barrier Level, you will lose 1% of the principal amount of your Notes for each 1% that the Final Level is
less than the Initial Level.
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The Notes Do Not Pay Interest and Your Return May Be Lower than the Return on a Conventional Debt Security of Comparable Maturity — There will be no periodic interest payments on the Notes as there would be on a conventional fixed-rate or floating-rate debt security having the same maturity. The return that you will receive on the Notes,
which could be negative, may be less than the return you could earn on other investments. Your return may be less than the return you would earn if you purchased one of our conventional senior interest bearing debt securities.
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Your Potential Payment at Maturity Is Limited — The Notes will provide less opportunity to participate in the
appreciation of the Reference Asset than an investment in a security linked to the Reference Asset providing full participation in the appreciation, because the payment at maturity will not exceed the Digital Payment. Accordingly,
your return on the Notes may be less than your return would be if you made an investment in a security directly linked to the positive performance of the Reference Asset.
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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 the amount due on the maturity date is dependent upon our ability to repay our obligations at that time. This will be the case
even if the level of the Reference Asset increases after the Trade Date. No assurance can be given as to what our financial condition will be at the maturity 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 of our other affiliates 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 Is Less than the Price to the Public — The initial estimated value of the Notes that is set forth on the cover page of this
pricing supplement 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 level of the Reference Asset, the borrowing rate we pay to issue securities
of this kind, and the inclusion in the price to the public of the underwriting discount, the referral fee 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
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Digital Notes with Barrier Linked to the Russell
2000® Index
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The Initial Estimated Value of the Notes that Is Set Forth on the Cover Page of this Pricing Supplement Is an Estimate Only, Calculated as of the Time the
Terms of the Notes Were Set — The initial estimated value of the Notes is based on the value of our obligation to make the payments on the Notes, together with the mid-market value of the
derivative embedded in the terms of the Notes. See “Structuring the Notes” below. Our estimate is based on a variety of assumptions, including our 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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Our Business Activities May Create Conflicts of Interest — We and our affiliates expect to engage in trading
activities related to the Reference Asset 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 proprietary accounts, in facilitating transactions, including options and other derivatives transactions, for their customers and in accounts under their management. These trading activities, if they
influence the level of the Reference Asset, could be adverse to the interests of the holders of the Notes. We and one or more of our affiliates may, at present or in the future, engage in business with companies included in the
Reference Asset, including making loans to or providing advisory services. These services could include investment banking and merger and acquisition advisory services. These activities may present a conflict between our or one or
more of our affiliates’ obligations and your interests as a holder of the Notes. Moreover, we and our affiliates may have published, and in the future expect to publish, research reports with respect to the Reference Asset. This
research is modified from time to time without notice and may express opinions or provide recommendations that are inconsistent with purchasing or holding the Notes. Any of these activities by us or one or more of our affiliates may
affect the level of the Reference Asset, and, therefore, the market value of the Notes.
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You Will Not Have Any Rights to the Securities Included in the Reference Asset — As a holder of the Notes, you will
not have voting rights or rights to receive cash dividends or other distributions or other rights that holders of securities included in the Reference Asset would have. The Final Level will not reflect any dividends paid on the
securities included in the Reference Asset, and accordingly, any positive return on the Notes may be less than the potential positive return on those securities.
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The Payments on the Notes Are Subject to Postponement Due to Market Disruption Events and Adjustments — The payment at
maturity 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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An Investment in Notes Linked to the RTY Is Subject to Risks Associated in Investing in Stocks With a Small Market Capitalization — The RTY consists of stocks issued
by companies with relatively small market capitalizations. These companies often have greater stock price volatility, lower trading volume and less liquidity than large-
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Digital Notes with Barrier Linked to the Russell
2000® Index
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Digital Notes with Barrier Linked to the Russell
2000® Index
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Digital Notes with Barrier Linked to the Russell
2000® Index
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Digital Notes with Barrier Linked to the Russell
2000® Index
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Digital Notes with Barrier Linked to the Russell
2000® Index
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Digital Notes with Barrier Linked to the Russell
2000® Index
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Digital Notes with Barrier Linked to the Russell
2000® Index
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