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Linked to the EURO STOXX® Banks Index.
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Unlike ordinary debt securities, the securities do not pay interest or repay a fixed amount of principal at maturity. Instead, the securities provide for a payment at maturity that may be greater than, equal
to or less than the initial public offering price of the securities, depending on the performance of the Index from its Initial Index Level to its Final Index Level.
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The payment at maturity will reflect the following terms:
o If the level of the Index stays unchanged or increases:
You will receive the initial public offering price plus the greater of (i) the Contingent Minimum Return and (ii) the product of $1,000 and the percentage increase of the Index
o If the level of the Index decreases but the decrease is not more than 20.00%:
You will be repaid the initial public offering price
o If the level of the Index decreases by more than 20.00%:
You will have full downside exposure to the decrease in the level of the Index from the Initial Index Level to the Final Index Level, and you will lose more than 20%, and
possibly all, of the initial public offering price.
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Investors may lose more than 20%, and up to 100%, of the initial public offering price
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All payments on the securities are subject to the credit risk of Royal Bank of Canada, and you will have no ability to pursue the issuer of any securities represented by the Index for payment; if Royal Bank of
Canada defaults on its obligations, you could lose some or all of your investment
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No periodic interest payments or dividends
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No exchange listing; designed to be held to maturity
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Hypothetical returns
Hypothetical
Final Index Level
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Percentage Change from the
Hypothetical Initial Index Level
to the Hypothetical
Final Index Level
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Hypothetical Maturity
Payment Amount per Security
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Hypothetical Pre-Tax
Total Rate of Return on
the Securities
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0.00
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-100.00%
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$0.00
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-100.00%
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10.00
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-90.00%
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$100.00
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-90.00%
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20.00
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-80.00%
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$200.00
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-80.00%
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30.00
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-70.00%
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$300.00
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-70.00%
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40.00
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-60.00%
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$400.00
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-60.00%
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50.00
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-50.00%
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$500.00
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-50.00%
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60.00
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-40.00%
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$600.00
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-40.00%
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70.00
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-30.00%
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$700.00
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-30.00%
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80.00
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(1)
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-20.00%
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$1,000.00
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0.00%
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85.00
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-15.00%
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$1,000.00
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0.00%
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90.00
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-10.00%
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$1,000.00
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0.00%
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95.00
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-5.00%
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$1,000.00
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0.00%
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100.00
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(2)
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0.00%
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$1,440.00
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(3)
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44.00%
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110.00
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10.00%
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$1,440.00
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44.00%
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120.00
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20.00%
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$1,440.00
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44.00%
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130.00
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30.00%
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$1,440.00
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44.00%
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140.00
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40.00%
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$1,440.00
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44.00%
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144.00
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44.00%
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$1,440.00
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44.00%
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150.00
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50.00%
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$1,500.00
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50.00%
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160.00
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60.00%
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$1,600.00
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60.00%
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170.00
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70.00%
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$1,700.00
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70.00%
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180.00
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80.00%
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$1,800.00
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80.00%
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190.00
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90.00%
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$1,900.00
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90.00%
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200.00
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100.00%
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$2,000.00
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100.00%
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(1)
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This is the hypothetical Threshold Level.
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(2)
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This is the hypothetical Initial Index Level.
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(3)
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This is the sum of the principal amount plus the Contingent Minimum Return of $1,440.00.
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How the maturity payment amount is calculated
The maturity payment amount will be determined as follows:
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If the Final Index Level is greater than or equal to the Initial Index Level, the maturity payment amount per security will equal the greater of:
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(i)
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$1,000 plus the Contingent Minimum Return and
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(ii)
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$1,000 plus
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If the Final Index Level is less than the Initial Index Level but greater than or equal to the Threshold Level, the maturity payment amount per security will equal the
issue price of $1,000.00
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If the Final Index Level is less than the Threshold Level, the maturity payment amount per security will equal:
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$1,000 -
In such a case, you will have full downside exposure to the decrease in the level of the Index, and you will lose 1% of the principal amount for each 1% that the
Final Index Level is less than the Initial Index Level. Accordingly, if the Final Index Level is less than the Threshold Level, you will lose more than 20%, and up to 100%, of your principal.
Daily closing levels of the Index*
*The graph above sets forth the daily closing levels of the Index for the period from January 1, 2016 to September 14, 2021. The closing level on September 14, 2021 was 96.64. The historical performance
of the Index is not an indication of its future performance during the term of the securities.
Selected risk considerations
The risks set forth below are discussed in detail in the “Risk Factors” section in the accompanying pricing supplement. Please review those risk disclosures
carefully.
Risks Relating to the Terms and Structure of the Securities
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Your investment may result in a loss of more than 20%, and up to 100%, of your principal
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You will not receive interest payments on the securities
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Your yield may be lower than the yield on a standard debt security of comparable maturity
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You will receive the Contingent Minimum Return only if the Final Index Level is greater than or equal to the Initial Index Level
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Owning the securities is not the same as owning the common stocks represented by the Index
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The securities will be debt obligations of Royal Bank of Canada. No other company or entity will be responsible for payments under the securities
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The tax treatment of the securities is uncertain and gain on the securities may be treated as ordinary income under the constructive ownership rules
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Risks Relating to the Secondary Market for the Securities
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There may not be an active trading market for the securities
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The amount to be paid at maturity is not linked to the level of the Index at any time other than the valuation date
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Many factors affect the market value of the securities
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Risks Relating to the Index
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An investment in the securities is subject to risks relating to non-U.S. companies
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The securities will not be adjusted for changes in exchange rates
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The Index is concentrated in the banking industry
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Changes that affect the Index will affect the market value of the securities and the maturity payment amount
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We have no affiliation with the sponsor of the Index and will not be responsible for any actions taken by the sponsor
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Historical levels of the Index should not be taken as an indication of the future levels of the Index during the term of the securities
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Risks Relating to the Initial Estimated Value of the Securities
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Our initial estimated value of the securities is less than the initial public offering price
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The price, if any, at which you may be able to sell your securities prior to maturity may be less than the initial public offering price and our initial estimated value
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The initial estimated value of the securities is an estimate only, calculated as of the time the terms of the securities were set
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Risks Relating to Conflicts of Interest
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Hedging transactions may affect the return on the securities
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Potential conflicts of interest could arise
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The calculation agent may postpone the valuation date and, therefore, determination of the Final Index Level and the maturity date if a market disruption event occurs on the valuation date
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There are potential conflicts of interest between you and the calculation agent
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Not suitable for all investors
Investment suitability must be determined individually for each investor. The securities described herein are not a suitable investment for all investors. In particular, no
investor should purchase the securities unless they understand and are able to bear the associated market, liquidity and yield risks. Unless market conditions and other relevant factors change significantly in your favor, a sale of the securities
prior to maturity is likely to result in sale proceeds that are substantially less than the initial public offering price per security. Royal Bank of Canada, Wells Fargo Securities, LLC and their respective affiliates are not obligated to purchase
the securities from you at any time prior to maturity.
The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should
read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC website at
www.sec.gov. Alternatively, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling your financial advisor or by calling Royal Bank of Canada toll-free at 1-877-688-2301.
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, members SIPC, separate registered
broker-dealers and non-bank affiliates of Wells Fargo & Company.
Consult your tax advisor
Investors should review carefully the accompanying pricing supplement, prospectus supplement and prospectus and consult their tax advisors regarding the application of the U.S. federal income tax laws to
their particular circumstances, as well as any tax consequences arising under the laws of any state, local or foreign jurisdiction.