Royal Bank of Canada
Market Linked Securities
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Market Linked Securities – Leveraged Upside Participation to a Cap and Fixed Buffered Downside Principal at Risk Securities
Linked to the Energy Select Sector SPDR® Fund due August 5, 2022
Term Sheet to Preliminary Pricing Supplement No. WFC132 dated January 3, 2019
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Issuer
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Royal Bank of Canada
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Term
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Approximately 3.5 years
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Fund
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Energy Select Sector SPDR® Fund
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Pricing Date
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January 31 2019*
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Original Issue Date
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February 5, 2019*
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Principal Amount
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$1,000 per security (each security will be offered at an initial public offering price of $1,000)
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Payment at
Maturity
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See “How the maturity payment amount is calculated” on page 3
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Maturity Date
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August 5, 2022*
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Initial Fund Price
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The fund closing price of the Fund on the pricing date
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Final Fund Price
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The fund closing price of the Fund on the valuation date
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Maximum Maturity
Payment Amount
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[$1,450 - $1,500] (to be determined on the pricing date)
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Buffer Price
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85% of the Initial Fund Price
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Participation Rate
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150%
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Valuation Date
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July 29, 2022*
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Calculation Agent
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RBC Capital Markets, LLC, a wholly-owned subsidiary of the issuer
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Denominations
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$1,000 and any integral multiple of $1,000
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Underwriting
Discount and
Commission
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Up to 3.70%, of which dealers, including Wells Fargo Advisors, LLC (“WFA”), may receive a selling concession of 2.00% and WFA will receive a distribution expense fee of 0.075%
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CUSIP
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78013XVA3
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Linked to the Energy Select Sector SPDR® Fund
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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 Fund from its Initial Fund Price to its Final Fund Price.
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Investors may lose up to 85% 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 Fund or any securities held by the Fund 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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·
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No exchange listing; designed to be held to maturity
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The issuer’s initial estimated value of the securities as of the date of the accompanying preliminary pricing supplement is $930.09 per
$1,000 in principal amount, which is less than the public offering price. While the initial estimated value of the securities on the pricing date may differ from the estimated value set forth above, the issuer does not expect it to
differ significantly absent a material change in market conditions or other relevant factors. The final pricing supplement relating to the securities will set forth the issuer’s estimate of the initial value of the securities as of
the pricing date, which will not be less than $910.09 per $1,000 in principal amount. The market value of the securities at any time will reflect many factors, cannot be predicted with accuracy, and may be less than this amount. See
“Risk Factors” and “Supplemental Plan of Distribution – Structuring the Securities” in the accompanying preliminary pricing supplement for further information.
The securities have complex features and investing in the securities involves risks not associated with an
investment in conventional debt securities. See “Selected Risk Considerations” in this term sheet and “Risk Factors” in the accompanying preliminary pricing supplement.
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Hypothetical
Final Fund Price |
Percentage Change from the
Hypothetical Initial Fund Price
to the Hypothetical
Final Fund Price
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Hypothetical Maturity
Payment Amount per
Security(1)
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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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$150.00
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-85.00%
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$10.00
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-90.00%
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$250.00
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-75.00%
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$30.00
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-70.00%
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$450.00
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-55.00%
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$40.00
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-60.00%
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$550.00
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-45.00%
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$50.00
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-50.00%
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$650.00
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-35.00%
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$60.00
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-40.00%
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$750.00
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-25.00%
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$70.00
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-30.00%
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$850.00
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-15.00%
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$80.00
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-20.00%
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$950.00
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-5.00%
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$85.00
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(2)
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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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(3)
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0.00%
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$1,000.00
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0.00%
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$105.00
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5.00%
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$1,075.00
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7.50%
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$110.00
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10.00%
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$1,150.00
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15.00%
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$115.00
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15.00%
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$1,225.00
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22.50%
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$120.00
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20.00%
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$1,300.00
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30.00%
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$130.00
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30.00%
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$1,450.00
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45.00%
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$131.67
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31.67%
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$1,475.00
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47.50%
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$135.00
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35.00%
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$1,475.00
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47.50%
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$140.00
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40.00%
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$1,475.00
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47.50%
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$150.00
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50.00%
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$1,475.00
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47.50%
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(1) |
Based on a hypothetical maximum maturity payment amount of $1,475.00 (the mid-point of the specified range for the maximum maturity payment amount).
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(2) |
This is the hypothetical Buffer Price.
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(3) |
This is the hypothetical Initial Fund Price.
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If the Final Fund Price is greater than the Initial Fund Price, the
maturity payment amount per security will equal the lesser of:
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(i) |
(ii) |
the maximum maturity payment amount
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If the Final Fund Price is equal to or less than the Initial Fund Price but greater than or equal to the Buffer Price, the maturity payment amount per security will equal the issue price of $1,000.00
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If the Final Fund Price is less than the Buffer Price, the maturity payment amount per
security will equal:
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Your investment may result in a loss of up to 85% 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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Your return is limited and will not reflect the return of owning the Fund or the common stocks held by the Fund
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Owning the securities is not the same as owning the shares of the Fund or the common stocks held by the Fund
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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 price of the Fund 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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The correlation between the performance of the Fund and the performance of the Underlying Index may be imperfect
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An investment in the securities is subject to risks associated with investing in stocks in the energy sector
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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 policies of the Fund investment adviser and changes that affect the Underlying Index could affect the amount payable on the securities and their market value
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We have no affiliation with the Index Sponsor and will not be responsible for any actions taken by the Index Sponsor
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Historical prices of the Fund should not be taken as an indication of the future prices of the Fund during the term of the securities
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Hedging transactions may affect the return on the securities
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Our initial estimated value of the securities will be 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 will be an estimate only, calculated as of the time the terms of the securities are set
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Potential conflicts of interest could arise
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Anti-dilution adjustments relating to the shares of the Fund do not address every event that could affect such shares
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The calculation agent may postpone the valuation date and, therefore, determination of the Final Fund Price 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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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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