Royal Bank of Canada filed a free writing prospectus on November 3, 2026, disclosing terms for Auto-Callable Enhanced Return Barrier Notes linked to a basket of five energy and infrastructure equity securities, with a maturity date of November 29, 2029.

Key Highlights

  • Issuer: Royal Bank of Canada ("RBC"), CUSIP 78018DQT7, filed under Registration Statement No. 333-275898.
  • Basket composition: Equal 1/5 weighting across Constellation Energy Corporation (CEG), GE Vernova Inc. (GEV), NRG Energy Inc. (NRG), Quanta Services Inc. (PWR), and Vistra Corp. (VST).
  • Auto-call feature: If the basket closing value on November 30, 2027 is at or above the Initial Basket Value of 100, investors receive at least $1,190 per $1,000 principal amount, with no further payments.
  • Upside participation: If not called and the Final Basket Value exceeds the Initial Basket Value at maturity, investors receive a return equal to 150% of the Basket Return.
  • Barrier level: Set at 70, which the filing describes as 70% of the Initial Basket Value; principal is returned in full if the Final Basket Value falls between 70 and 100.
  • Principal risk: If the Final Basket Value falls below 70, investors lose 1% of principal for each 1% decline below the Initial Basket Value.
  • Initial estimated value: Expected to be between $890.00 and $940.00 per $1,000 principal amount, which the filing states "will be less than the public offering price of the Notes."

Terms and Structure of RBC's Five-Stock Energy Basket Notes

According to the filing, Royal Bank of Canada is offering structured notes tied to an equally weighted basket of five publicly traded companies operating across the energy generation, energy technology, power infrastructure, and electrical services sectors. The basket underliers are Constellation Energy Corporation, GE Vernova Inc., NRG Energy Inc., Quanta Services Inc., and Vistra Corp., each carrying a 1/5 basket weighting. The Initial Basket Value is set at 100 on the Trade Date of November 24, 2026, and the notes are scheduled to issue on November 30, 2026.

The filing discloses a single Call Observation Date of November 30, 2027. If the basket's closing value meets or exceeds the Initial Basket Value on that date, the notes are automatically called and investors receive at least $1,190 per $1,000 principal amount on the Call Settlement Date of December 3, 2027. If the notes are not called, payment at maturity on November 29, 2029 depends on the Final Basket Value as of the Valuation Date of November 26, 2029. A 150% Participation Rate applies only in the upside scenario at maturity. The notes pay no interest in any scenario, according to the filing's risk considerations.

The filing identifies several risks specific to this structure. It notes that GE Vernova has a limited trading history as a Basket Underlier. It also discloses that RBC Capital Markets, LLC ("RBCCM") serves as Calculation Agent, and states that "RBCCM's Role as Calculation Agent May Create Conflicts of Interest." All payments on the notes are subject to RBC's credit risk. The filing further states that "the U.S. Federal Income Tax Consequences of an Investment in the Notes Are Uncertain" and that there may not be an active secondary trading market for the notes.

What Was Disclosed

Royal Bank of Canada disclosed the preliminary terms of Auto-Callable Enhanced Return Barrier Notes due November 29, 2029, linked to a basket of five energy-sector equities, including call mechanics, a 70% barrier level, a 150% participation rate at maturity, and an initial estimated value range of $890.00 to $940.00 per $1,000 principal.