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TORONTO, Oct. 22, 2020 /CNW/ - Royal Bank of Canada (TSX: RY) (NYSE: RY) today announced the offering of $1.25 billion of non-viability contingent capital (NVCC) Additional Tier 1 (AT1) Limited Recourse Capital Notes, Series 2 (the "LRCNs").

The LRCNs will bear interest at a rate of 4.00 per cent annually, payable semi-annually, for the initial period ending February 24, 2026. Thereafter, the interest rate on the LRCNs will reset every five years at a rate equal to the prevailing 5-year Government of Canada Yield plus 3.617 per cent. The LRCNs will mature on February 24, 2081. The expected closing date of the offering is November 2, 2020. RBC Capital Markets is acting as lead agent on the issue.

Concurrently with the issuance of the LRCNs, the bank will issue NVCC Non-Cumulative 5-Year Fixed Rate Reset First Preferred Shares, Series BR ("Preferred Shares Series BR") to be held by Computershare Trust Company of Canada as trustee for Leo LRCN Limited Recourse Trust^TM (the "Limited Recourse Trust"). In case of non-payment of interest on or principal of the LRCNs when due, the recourse of each LRCN holder will be limited to that holder's proportionate share of the Limited Recourse Trust's assets, which will consist of Preferred Shares Series BR except in limited circumstances.

The bank may redeem the LRCNs during the period from January 24 to and including February 24, commencing in 2026 and every five years thereafter, only upon the redemption by the bank of the Preferred Shares Series BR held in the Limited Recourse Trust, in accordance with the terms of such shares and with the prior written approval of the Superintendent of Financial Institutions (Canada), in whole on not less than 15 nor more than 60 days' prior notice.

Net proceeds from this transaction will be used for general business purposes.

The LRCNs have not been, and will not be, registered in the United States under the United States Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state of the United States and may not be offered, sold or delivered, directly or indirectly in the United States or to, or for the account or benefit of, a "U.S. person" (as defined in Regulation S under the Securities Act) absent registration under the Securities Act or an applicable exemption from such registration requirements. This press release does not constitute an offer to sell or a solicitation to buy securities in the United States or in any other jurisdiction where such offer or solicitation would be unlawful.

SOURCE Royal Bank of Canada

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