Royal Bank of Canada Announces NVCC Preferred Share Issue

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

TORONTO, Feb. 25, 2016 /CNW/ - Royal Bank of Canada (RY on TSX and NYSE) today announced a domestic public offering of Non-Cumulative, 5-Year Rate Reset Preferred Shares Series BM.

Royal Bank of Canada will issue 12 million Preferred Shares Series BM priced at $25 per share to raise gross proceeds of $300 million.  The bank has granted the Underwriters an option, exercisable in whole or in part, to purchase up to an additional 2 million Preferred Shares Series BM at the same offering price.

The Preferred Shares Series BM will yield 5.50 per cent annually, payable quarterly, as and when declared by the Board of Directors of Royal Bank of Canada, for the initial period ending August 24, 2021.  Thereafter, the dividend rate will reset every five years at a rate equal to 4.80 per cent over the 5-year Government of Canada bond yield.

Subject to regulatory approval, on or after August 24, 2021, the bank may redeem the Preferred Shares Series BM in whole or in part at par. Holders of Preferred Shares Series BM will, subject to certain conditions, have the right to convert all or any part of their shares to Non-Cumulative Floating Rate Preferred Shares Series BN on August 24, 2021 and on August 24 every five years thereafter.

Holders of the Preferred Shares Series BN will be entitled to receive a non-cumulative quarterly floating dividend, as and when declared by the Board of Directors of Royal Bank of Canada, at a rate equal to the 3-month Government of Canada Treasury Bill yield plus 4.80 per cent. Holders of Preferred Shares Series BN will, subject to certain conditions, have the right to convert all or any part of their shares to Preferred Shares Series BM on August 24, 2026 and on August 24 every five years thereafter.

The offering will be underwritten by a syndicate led by RBC Capital Markets. The expected closing date is March 7, 2016.

We routinely undertake funding transactions to maintain strong capital ratios and a cost effective capital structure. Net proceeds from this transaction will be used for general business purposes.

The Preferred Shares Series BM 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 RBC

For further information:

please contact:

Investor Contact:
Shirley Boudreau, Shareholder Relations, 416-955-7806
Julia Macleod, Investor Relations, 416-955-7302

Media Contact:
Seema Sharma, Financial Communications, 416-974-5606


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