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Preferred Share Description
Royal Bank of Canada (RY.PR.J)
3.60% Non-Cumulative, Redeemable, Rate Reset, NVCC*, 1st preferred shares, Series BD
Prospectus - January 27, 2015
DBRS Credit Rating: June 18, 2019 - DBRS upgraded the long-term ratings of the Royal Bank of Canada and its related entities, including RBC’s Long-Term Issuer Rating, to AA (high) from AA. DBRS also changed the trend on all long-term ratings to Stable from Positive. The Bank’s Short-Term Issuer Rating was confirmed at R-1 (high) with a Stable trend. RBC’s Long-Term Issuer Rating is composed of an Intrinsic Assessment (IA) of AA and Support Assessment of SA2, which reflect the expectation of timely systemic support from the Government of Canada (rated AAA with a Stable trend by DBRS). The SA2 designation results in a one-notch uplift to the Long-Term Issuer Rating. Under the new Canadian Bank Recapitalization Regime (the Bail-In Regime), DBRS expects to eventually remove the uplift from systemic support, once the Bank has issued a sufficient level of bail-inable senior debt, which would thereby provide an adequate buffer for non-bail-inable obligations and is then expected to offset the removal of systemic support.
Important Note: NVCC preferred shares have a lower credit rating than other ROyal Bank preferred share issues. DBRS assigned the NVCC Preferred Shares Series BD a rating equal to the Bank’s intrinsic assessment less four rating notches because the Series BD has only an Office of the Superintendent of Financial Institutions (OSFI)-compliant non-viable contingent capital (NVCC) trigger, which is consistent with the OSFI requirements for NVCC instruments, and no additional triggers.
*NVCC is short for Non-Viability Contingent Capital and it refers to the issuer's ability to convert the preferred shares into common shares if a "Trigger Event" occurs. See "Convertible by Company" section below for the definition of a trigger event.
- DBRS Rating
- Pfd-2 (high) Stable Trend
- DBRS Rating Date
- Shares Issued
- Issued Date
- Shares O/S
- O/S Date
- $0.90 per share per year
- Dividend Dates
- On the 24th day of February, May, August and November
- Dividend Details
- Initially fixed. The dividend rate will be reset on May 24, 2020 and on May 24th every five years thereafter. The dividend rate will be set at an annual rate equal to the Government of Canada Yield (GCAN5YR) plus 2.74%.
- The shares are not redeemable by the company prior to May 24, 2020. On May 24, 2020 and on May 24th every year thereafter, the company may redeem the shares at $25.00 per share.
- Holders of the Series BD have the right to convert their shares into an equal number of Series BE Floating-Rate preferred shares on May 24, 2020 and on May 24th every five years thereafter. The Floating Rate Class BE shares will calculate and pay dividends quarterly. The floating-rate dividend will equal the 3-month Government of Canada Treasury Bill yield plus 2.74%. On May 24, 2025 and on May 24th every five years thereafter Series BE shareholders have the right to convert back into Series BD rate-reset preferred shares.
- Lead Underwriter(s)
- RBC Capital Markets, BMO Capital Markets, CIBC World Markets
- Transfer Agent
- Computershare Trust Company of Canada
- Computershare Trust Company of Canada
- Dividend Reinvestment Plan
- Registered holders of the preferred shares are eligible to participate in the Dividend Reinvestment Plan for the purchase of common shares. Preferred share dividends can be reinvested in the issuer's common shares. For more information, visit Shareholder investment Plans at http://www.rbc.com/investorrelations/ir_dividends.html
- Convertible by Company
- Contingent Conversion: If a "Trigger Event" (as defined below) were to occur, all of the then outstanding Preferred Shares Series BD will be automatically exchanged, without the consent of the holders, for newly issued fully-paid and freely-tradable common shares of the Bank (the “Common Shares”), the number of which to be determined in accordance with the Contingent Conversion Formula; rounding down, if necessary, to the nearest whole number of Common Shares, such conversion being referred to herein as the “Contingent Conversion”. Fractions of Common Shares will not be issued or delivered pursuant to a Contingent Conversion and no cash payment will be made in lieu thereof. A Trigger Event means any one of the following: 1) the Superintendent publicly announces that the Bank has been advised, in writing, that the Superintendent is of the opinion that the Bank has ceased, or is about to cease, to be viable and that, after the conversion of the Preferred Shares Series BD and all other non-viability contingent capital instruments issued by the Bank and taking into account any other factors or circumstances that are considered relevant or appropriate, it is reasonably likely that the viability of the Bank will be restored or maintained; or 2) a federal or provincial government in Canada publicly announces that the Bank has accepted or agreed to accept a capital injection, or equivalent support, from the federal government or any provincial government or political subdivision or agent or agency thereof without which the Bank would have been determined by the Superintendent to be non-viable. See the share's prospectus for the exact details.
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