Royal Bank of Canada in its inaugural US$1 billion Limited Recourse Series 4 Capital Notes offering Royal Bank of Canada in its inaugural US$1 billion Limited Recourse Series 4 Capital Notes offering

On April 24, 2024, Royal Bank of Canada (RBC) completed its inaugural offering of US$1 billion aggregate principal amount of Limited Recourse Capital Notes, Series 4 (Non-Viability Contingent Capital (NVCC)) (LRCNs) in the United States of America and on a private placement basis in Canada.

The offering represents another series of RBC’s Additional Tier 1 capital offerings following its inaugural Cdn$1.75 billion Limited Recourse Capital Notes offering completed in July 2020, subsequent Cdn$1.25 billion Limited Recourse Capital Notes offering in November 2020 and Cdn$1 billion Limited Recourse Capital Notes offering in June 2021, using the now market standard form of AT1 capital instrument pioneered by Osler.

The LRCNs will bear interest at a rate of 7.500% annually, payable quarterly, for the initial period ending May 2, 2029. Thereafter, the interest rate on the LRCNs will reset every five years at a rate equal to the prevailing U.S. Treasury Rate plus 2.887%. The LRCNs will mature on May 2, 2084. Net proceeds from this transaction will be used for general business purposes.

Royal Bank of Canada is a global financial institution and the largest bank in Canada by market capitalization.

Osler, Hoskin & Harcourt LLP represented Royal Bank of Canada with a team consisting of Rosalind Hunter, Jeremy Wu, Jessica Redmond (Corporate), Timothy Hughes and James Chang (Tax), François Paradis (Montreal) and Jacqueline Code (Research).