|
|
Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-275898
|
|
|
|
|
The information in this preliminary pricing supplement is not complete and may be changed.
|
|
|
|
Preliminary Pricing Supplement
Subject to Completion:
Dated May 15, 2024
To the Product Prospectus Supplement FIN-1, the Prospectus Supplement and the Prospectus, each dated December 20, 2023
|
|
$_________
Redeemable Fixed Rate Notes,
Due May 30, 2029
Royal Bank of Canada
|
|
|
|
|
Royal Bank of Canada is offering the Redeemable Fixed Rate Notes (the “Notes”) described below.
The CUSIP number for the Notes is 78014RSQ4.
The Notes will accrue interest at the rate of 5.10% per annum.
We will pay interest on the Notes on May 30th and November 30th of each year (each an “Interest Payment Date”), commencing on November 30, 2024, and ending on the Maturity Date.
We may call the Notes in whole, but not in part, beginning on May 30, 2027, and on each Interest Payment Date thereafter upon 10 business days’ prior written notice. All payments on
the Notes are subject to our credit risk.
The Notes will not be listed on any securities exchange.
The Notes will be bail-inable notes (as defined in the accompanying prospectus supplement dated December 20, 2023) and subject to conversion in whole or in part – by means of a
transaction or series of transactions and in one or more steps – into common shares of the Bank or any of its affiliates under subsection 39.2(2.3) of the Canada Deposit Insurance Corporation Act (the “CDIC Act”) and to variation or
extinguishment in consequence, and subject to the application of the laws of the Province of Ontario and the federal laws of Canada applicable therein in respect of the operation of the CDIC Act with respect to the Notes.
Investing in the Notes involves a number of risks. See “Additional Risk Factors” on page P-5 of this pricing supplement, “Risk Factors” beginning on page PS-5 of the product
prospectus supplement FIN-1 dated December 20, 2023 and “Risk Factors” on page S-3 of the prospectus supplement dated December 20, 2023.
The Notes will not constitute deposits insured by the Canada Deposit Insurance Corporation, the U.S. Federal Deposit Insurance Corporation (the “FDIC”) or any other Canadian or U.S.
government agency or instrumentality.
Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined that this pricing
supplement is truthful or complete. Any representation to the contrary is a criminal offense.
RBC Capital Markets, LLC ("RBCCM") will purchase the Notes from us on the issue date at purchase prices that are expected to be between 98.00% and 100.00% of the principal amount,
and will pay all or a portion of its underwriting discount to certain selected broker-dealers as a selling concession. The initial price to the public for the Notes will be equal to the principal amount. However, certain dealers who purchase the
Notes for sale to certain fee-based advisory accounts and/or eligible institutional investors may forgo some or all of their selling concessions, fees or commissions. The price to public for investors purchasing the Notes in these accounts and/or
for an eligible institutional investor may be as low as $980.00 (98.00%) per $1,000 in principal amount of the Notes. See “Supplemental Plan of Distribution (Conflicts of Interest)” below.
We will deliver the Notes in book-entry only form through the facilities of The Depository Trust Company on or about May 30, 2024, against payment in immediately available funds.
SUMMARY
The information in this “Summary” section is qualified by the more detailed information set forth in this pricing supplement, the product prospectus supplement FIN-1, the
prospectus supplement, and the prospectus.
Issuer:
|
Royal Bank of Canada (the “Bank”)
|
Issue:
|
Senior Global Medium-Term Notes, Series J
|
Underwriter:
|
RBC Capital Markets, LLC
|
Currency:
|
U.S. Dollars
|
Minimum Investment:
|
$1,000 and minimum denominations of $1,000 in excess of $1,000
|
Pricing Date:
|
May 28, 2024
|
Issue Date:
|
May 30, 2024
|
Maturity Date:
|
May 30, 2029
|
Type of Note:
|
Fixed Rate Note
|
Interest Rate:
|
5.10% per annum
|
Interest Payment
Dates:
|
Semi-annually, on May 30th and November 30th of each year, commencing on November 30, 2024, and ending on the maturity date. If an Interest Payment Date is not a New York
business day, interest will be paid on the next New York business day, without adjustment for period end dates and no interest will be paid in respect of the delay.
|
Redemption:
|
Redeemable at our option. If we redeem the Notes, we will pay you the principal amount, together with the applicable interest payment.
|
Call Dates:
|
The Notes are callable, in whole, but not in part, beginning on May 30, 2027, and on each Interest Payment Date thereafter upon 10 business days’ prior written notice.
|
Survivor’s Option:
|
Not Applicable.
|
Canadian Bail-in
Powers
Acknowledgment:
|
The Notes are bail-inable notes. See “Agreement with Respect to the Exercise of Canadian Bail-in Powers.”
|
U.S. Tax Treatment:
|
Please see the discussion (including the opinion of our special U.S. tax counsel, Ashurst LLP) in the product prospectus supplement FIN-1 dated December 20, 2023 under “Supplemental
Discussion of U.S. Federal Income Tax Consequences” and specifically the discussion under “Supplemental Discussion of U.S. Federal Income Tax Consequences—Supplemental U.S. Tax Considerations—Where the term of your notes will exceed one
year—Fixed Rate Notes, Floating Rate Notes, Inverse Floating Rate Notes, Step Up Notes, Leveraged Notes, Range Accrual Notes, Dual Range Accrual Notes and Non-Inversion Range Accrual Notes,” and “Supplemental Discussion of U.S. Federal
Income Tax Consequences—Supplemental U.S. Tax Considerations—Where the term of your notes will exceed one year—Sale, Redemption or Maturity of Notes that Are Not Treated as Contingent Payment Debt Instruments,” which applies to your
Notes.
|
Calculation Agent:
|
RBC Capital Markets, LLC
|
Listing:
|
The Notes will not be listed on any securities exchange.
|
Clearance and
Settlement:
|
DTC global (including through its indirect participants Euroclear and Clearstream, Luxembourg as described under “Ownership and Book-Entry Issuance” in the prospectus dated
December 20, 2023).
|
Terms Incorporated in
the Master Note:
|
All of the terms appearing above the item captioned “Listing” on pages P-2 and P-3 of this pricing supplement, the section "Agreement with Respect to the Exercise of Canadian Bail-in
Powers” below, and the applicable terms appearing under the caption “General Terms of the Notes” in the product prospectus supplement FIN-1 dated December 20, 2023, as modified by this pricing supplement.
|
ADDITIONAL TERMS OF YOUR NOTES
You should read this pricing supplement together with the prospectus dated December 20, 2023, as supplemented by the prospectus supplement dated December 20, 2023 and the product
prospectus supplement FIN-1 dated December 20, 2023, relating to our Senior Global Medium-Term Notes, Series J, of which these Notes are a part. Capitalized terms used but not defined in this pricing supplement will have the meanings given to
them in the product prospectus supplement FIN-1. In the event of any conflict, this pricing supplement will control. The Notes vary from the terms described in the product prospectus
supplement FIN-1 in several important ways. You should read this pricing supplement carefully.
This pricing supplement, together with the documents listed below, contains the terms of the Notes and supersedes all prior or contemporaneous oral statements as well as any other
written materials including preliminary or indicative pricing terms, correspondence, trade ideas, structures for implementation, sample structures, brochures or other educational materials of ours. You should carefully consider, among other
things, the matters set forth in “Risk Factors” in the prospectus supplement dated December 20, 2023, “Risk Factors” in the product prospectus supplement FIN-1 dated December 20, 2023 and “Additional Risk Factors” in this pricing supplement, as
the Notes involve risks not associated with conventional debt securities. We urge you to consult your investment, legal, tax, accounting and other advisors before you invest in the Notes. You may access these documents on the SEC website at
www.sec.gov as follows (or if that address has changed, by reviewing our filings for the relevant date on the SEC website):
Prospectus dated December 20, 2023:
Prospectus Supplement dated December 20, 2023:
Product Prospectus Supplement FIN-1 dated December 20, 2023:
Our Central Index Key, or CIK, on the SEC website is 1000275. As used in this pricing supplement, the “Company,” the “Bank,” “we,” “us,” or “our” refers to Royal Bank of Canada.
Royal Bank of Canada has filed a registration statement (including a product prospectus supplement, a prospectus supplement, and a prospectus) with the SEC for the offering to
which this pricing supplement relates. Before you invest, you should read those documents and the other documents relating to this offering that we have filed with the SEC for more complete information about us and this offering. You may obtain
these documents without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, Royal Bank of Canada, any agent or any dealer participating in this offering will arrange to send you the product prospectus supplement FIN-1, the
prospectus supplement and the prospectus if you so request by calling toll-free at 1-877-688-2301.
ADDITIONAL RISK FACTORS
The Notes involve risks not associated with an investment in ordinary fixed rate notes. This section describes the most significant risks relating to the terms of the Notes. For
additional information as to these risks, please see the product prospectus supplement FIN-1 and the prospectus supplement and prospectus, each dated December 20, 2023. You should carefully consider whether the Notes are suited to your particular
circumstances before you decide to purchase them. Accordingly, prospective investors should consult their financial and legal advisors as to the risks entailed by an investment in the Notes and the suitability of the Notes in light of their
particular circumstances.
The Notes Are Subject to the Risk of an Early Redemption. We have the option to redeem the Notes on the Call Dates set forth above. It is
more likely that we will redeem the Notes prior to their stated maturity date to the extent that the interest payable on the Notes is greater than the interest that would be payable on our other instruments of a comparable maturity, terms and
credit rating trading in the market. If the Notes are redeemed prior to their stated maturity date, you may have to re-invest the proceeds in a lower rate environment, and you will not receive any further payments on the Notes.
Investors Are Subject to Our Credit Risk, and Our Credit Ratings and Credit Spreads May Adversely Affect the Market Value of the Notes. Investors are
dependent on our ability to pay all amounts due on the Notes on the interest payment dates and at maturity, and, therefore, investors are subject to our credit risk and to changes in the market’s view of our creditworthiness. Any decrease in our
credit ratings or increase in the credit spreads charged by the market for taking our credit risk is likely to adversely affect the market value of the Notes.
AGREEMENT WITH RESPECT TO THE EXERCISE OF CANADIAN BAIL-IN
POWERS
By its acquisition of the Notes, each holder or beneficial owner is deemed to (i) agree to be bound, in respect of that Note, by the CDIC Act, including the conversion of that
Note, in whole or in part – by means of a transaction or series of transactions and in one or more steps – into common shares of the Bank or any of its affiliates under subsection 39.2(2.3) of the CDIC Act and the variation or extinguishment of
that Note in consequence, and by the application of the laws of the Province of Ontario and the federal laws of Canada applicable therein in respect of the operation of the CDIC Act with respect to that Note; (ii) attorn and submit to the
jurisdiction of the courts in the Province of Ontario with respect to the CDIC Act and those laws; and (iii) acknowledge and agree that the terms referred to in paragraphs (i) and (ii), above, are binding on that holder or beneficial owner
despite any provisions in the indenture or that Note, any other law that governs that Note and any other agreement, arrangement or understanding between that holder or beneficial owner and the Bank with respect to that Note.
Holders and beneficial owners of any Note will have no further rights in respect of that Note to the extent that Note is converted in a bail-in conversion, other than those provided under the
bail-in regime, and by its acquisition of an interest in any Note, each holder or beneficial owner of that Note is deemed to irrevocably consent to the converted portion of the principal amount of that Note and any accrued and unpaid interest
thereon being deemed paid in full by the Bank by the issuance of common shares of the Bank (or, if applicable, any of its affiliates) upon the occurrence of a bail-in conversion, which bail-in conversion will occur without any further action on
the part of that holder or beneficial owner or the trustee; provided that, for the avoidance of doubt, this consent will not limit or otherwise affect any rights that holders or beneficial owners may have under the bail-in regime.
See “Description of Notes We May Offer―Special Provisions Related to Bail-inable Notes” in the accompanying prospectus supplement dated December 20, 2023 for a description of provisions applicable
to the Notes as a result of Canadian bail-in powers.
SUPPLEMENTAL PLAN OF DISTRIBUTION (CONFLICTS OF INTEREST)
We expect that delivery of the Notes will be made against payment for the Notes on or about May 30, 2024, which is the second (2nd) business day following the Pricing Date (this
settlement cycle being referred to as “T+2”). See “Plan of Distribution” in the prospectus supplement dated December 20, 2023. For additional information as to the relationship between us and RBC Capital Markets, LLC, please see the section “Plan
of Distribution—Conflicts of Interest” in the prospectus dated December 20, 2023.
We expect to deliver the Notes on a date that is greater than one business days following the Trade Date. Under Rule
15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in two business days, and effective May 28, 2024, one business day, unless the parties to any such trade expressly agree otherwise. Accordingly,
purchasers who wish to trade the Notes more than one business day prior to the original issue date will be required to specify alternative settlement arrangements to prevent a failed settlement.
After the initial offering of the Notes, the price to the public may change.
We may use this pricing supplement in the initial sale of the Notes. In addition, RBC Capital Markets, LLC or another of our affiliates may use this pricing supplement in a market-making
transaction in the Notes after their initial sale. Unless we or our agent informs the purchaser otherwise in the confirmation of sale, this pricing supplement is being used in a market-making
transaction.
|
P-7
|
RBC Capital Markets, LLC
|