Royal Bank of Canada filed a free writing prospectus (FWP) disclosing the terms of its Dual Directional Barrier Digital Notes linked to the least performing of two underliers, with a maturity date of November 28, 2031, filed pursuant to Rule 433 under Registration Statement No. 333-275898.

Key Highlights

  • Underliers: The notes are linked to the MSCI Emerging Markets Index (Bloomberg: MXEF) and the EURO STOXX 50 Index (Bloomberg: SX5E), with returns determined by the least performing of the two.
  • Digital Return: If the least performing underlier finishes at or above its initial value, investors receive the greater of that underlier's return or a digital return of at least 63%, to be set on the Trade Date of November 25, 2026.
  • Absolute Value Return Cap: If the least performing underlier falls below its initial value but remains at or above 70% of that value, investors receive a positive return equal to the absolute value of the underlier return, capped at 30%.
  • Barrier Level: The barrier value is set at 70% of each underlier's initial value, as determined on the Trade Date.
  • Principal at Risk: If the least performing underlier closes below its barrier value on the Valuation Date of November 25, 2031, investors lose 1% of principal for each 1% decline from the initial underlier value.
  • Initial Estimated Value: According to the filing, the initial estimated value is expected to be between $880.00 and $930.00 per $1,000 principal amount, which "will be less than the public offering price of the Notes."
  • CUSIP: The notes carry CUSIP 78018DPS0 and do not pay interest.

Royal Bank of Canada's Barrier Digital Notes: Structure and Payment Terms

According to the filing, Royal Bank of Canada is the issuer of the Dual Directional Barrier Digital Notes, with an Issue Date of November 30, 2026, and a Maturity Date of November 28, 2031. The notes are structured around the performance of the least performing of two underliers: the MSCI Emerging Markets Index and the EURO STOXX 50 Index. Payment at maturity is determined per $1,000 principal amount and depends on where the least performing underlier finishes relative to its initial value and its barrier value.

The filing outlines three distinct payoff scenarios. If the least performing underlier's final value is greater than or equal to its initial value, investors receive $1,000 plus the greater of the underlier return or the digital return of at least 63%. If that underlier finishes below its initial value but at or above 70% of it, investors receive $1,000 plus a positive return equal to the absolute value of the underlier's negative return, though the filing specifies this positive return "will not exceed 30%." If the least performing underlier closes below its barrier value, investors receive $1,000 plus the underlier return, which would be negative, meaning "you will lose a substantial portion or all of your principal amount at maturity," as stated in the filing.

The filing also discloses that the initial estimated value, to be calculated as of the Trade Date, is expected to fall between $880.00 and $930.00 per $1,000 principal amount and will be less than the public offering price. The notes do not pay interest, and payments are subject to the credit risk of Royal Bank of Canada. The filing identifies multiple risk factors, including risks related to non-U.S. securities markets, emerging markets exposure through the MXEF index, currency exchange risk, and potential conflicts of interest involving RBCCM's role as calculation agent.

What Was Disclosed

Royal Bank of Canada disclosed the preliminary terms of Dual Directional Barrier Digital Notes due November 28, 2031, linked to the MSCI Emerging Markets Index and the EURO STOXX 50 Index, including payoff mechanics, a 70% barrier level, a digital return of at least 63%, and an estimated initial value range of $880.00 to $930.00 per $1,000 principal.