RBC

Documents
(SEDAR filing: 22 November 2013) Pricing Supplement of Royal Bank of Canada for Equity Fixed $6.12 RoC Securities (Senior Note Program), Series 1 (356 K). Davies
Summaries
Summary Under
Tax Topics - Public Transactions - Offerings - Linked Notes - ROC Notes - Fixed ROC notes
Royal Bank of CanadaFixed $6.12 RoC Notes tied to 5 senior Canadian banks
ROC distributions and Maturity

The purchaser of a Cdn.$100 note is entitled to receive monthly distributions of $0.51 as partial repayments of principal (ROC distributions), or $30.60 over the five-year term. On the Maturity Date, the holder will receive (in addition to the ROC distribution then due) for each $100 (original) principal amount of note a cash payment equal to the Outstanding Principal Amount (i.e., the original $100 principal minus ROC distributions) plus the "Aggregate Return" (which can be a negative amount).

Aggregate Return

The Aggregate Return references the Return (the percentage change between the Initial Valuation Date three days before the issue date, and the Final Valuation Date two days before the Maturity Date, multiplied by $100) of the five Underlying Securities, being the common shares of the five senior Canadian banks. The Aggregate Return is:

(a) if the Return of the worst-performing share is positive and greater than $30.60: the total ROC distributions plus 5% of any Return excess over $30.60;

(b) if the Return of the worst-performing share is positive, zero or negative but not lower (i.e., worse) than -$30.60: the total ROC distributions;

(c) if the Return of the worst-performing share is negative and lower than -$30.60: the total ROC distributions minus such Return.

Canadian taxation

ROC distributions. The Partial Principal Repayments are specified to be repayments of principal, and there is a substantial risk that no return will be received. "Accordingly, Partial Principal Repayments should not be regarded as payments as, on account of, in lieu of payment of or in satisfaction of, current or future interest on the Securities." On this basis, Partial Principal Repayments should not be included in the holder's income but, rather, should reduce the Securities' adjusted cost base.

Other

The Variable Amount (if positive) will be included in income when it becomes calculable (implicitly, in the year of maturity unless there is an early termination event based on market disruption), and will be realized as a capital loss (if the Notes are capital property to the holder) if it is negative. Appreciation in the Note value over its amortized principal amount should be realized as a capital gain if there is a sale by such a holder before maturity, although "the matter is not free from doubt."