Royal Bank of Canada Offers Auto-Callable Contingent Coupon Barrier Notes Linked to Amazon Stock, Due September 2027

Structure and Terms of Royal Bank of Canada's Amazon-Linked Barrier Notes

Royal Bank of Canada disclosed the offering of Auto-Callable Contingent Coupon Barrier Notes linked to the common stock of Amazon.com, Inc. in a preliminary pricing supplement subject to completion. The Notes are structured as part of Royal Bank of Canada's Senior Global Medium-Term Notes, Series J program, with the prospectus dated December 20, 2023 and supplemented by a product supplement dated July 22, 2025 providing the foundational terms for the offering. The minimum investment is $1,000, with additional denominations required in multiples of $1,000.

The filing states that the Notes are scheduled to be issued on July 30, 2026 with a Valuation Date of August 27, 2027 and a Maturity Date of September 1, 2027. The Trade Date is disclosed as July 27, 2026, with the Initial Underlier Value defined as the closing value of Amazon's common stock on that date. Both the Coupon Threshold and the Barrier Value are set at 68% of the Initial Underlier Value, rounded to two decimal places. The specific dollar figures for the Initial Underlier Value, Coupon Threshold, and Barrier Value were not completed in the preliminary filing, as the supplement remains subject to completion.

Contingent Coupon Mechanics and Monthly Observation Schedule

The filing discloses that investors will receive a monthly Contingent Coupon of $9.50 per $1,000 principal amount of Notes — equivalent to 0.95% per month or 11.40% per annum — on each Coupon Payment Date, provided that Amazon's stock closed at or above the Coupon Threshold on the immediately preceding Coupon Observation Date. If Amazon's closing price falls below the Coupon Threshold on any given Coupon Observation Date, no coupon will be paid for that period. The filing explicitly states that investors may not receive any Contingent Coupons during the term of the Notes.

The Coupon Observation Dates run monthly from August 27, 2026 through August 27, 2027, with corresponding Coupon Payment Dates beginning September 1, 2026 and concluding on the Maturity Date of September 1, 2027. The filing provides a full schedule of thirteen observation and payment date pairs, with the final observation date doubling as the Valuation Date. All dates are described as subject to postponement pursuant to the terms set out in the accompanying product supplement. This monthly cadence means the coupon income potential of the Notes is closely tied to Amazon's stock performance over a period spanning approximately thirteen months.

Auto-Call Feature Linked to Amazon's Closing Price Relative to Initial Value

The auto-call feature of the Notes activates on a monthly basis beginning approximately six months after the Trade Date. The filing states that Call Observation Dates begin on the sixth Coupon Observation Date, which is January 27, 2027, and continue on each subsequent Coupon Observation Date through July 27, 2027, excluding the final Coupon Observation Date that serves as the Valuation Date. If, on any Call Observation Date, Amazon's closing price is greater than or equal to the Initial Underlier Value — representing a 100% threshold — the Notes will be automatically called.

Upon an automatic call, the filing states that investors will receive $1,000 per $1,000 principal amount of Notes plus the Contingent Coupon otherwise due on the corresponding Call Settlement Date, which is the Coupon Payment Date immediately following the relevant Call Observation Date. No further payments will be made on the Notes following an automatic call. The filing makes clear that the call threshold is set at 100% of the Initial Underlier Value, meaning Amazon's stock would need to recover to at least the level recorded on the Trade Date for an early redemption to be triggered.

Principal Repayment Scenarios at Maturity and Barrier Risk to Investors

The filing outlines two distinct principal repayment outcomes at maturity for Notes that have not been automatically called. If the Final Underlier Value — defined as Amazon's closing price on the Valuation Date of August 27, 2027 — is greater than or equal to the Barrier Value of 68% of the Initial Underlier Value, investors will receive $1,000 per $1,000 principal amount plus any Contingent Coupon otherwise due. This outcome preserves the full principal amount even if Amazon's stock has declined meaningfully from the Trade Date, provided the decline does not exceed 32%.

However, the filing also discloses a materially adverse scenario. If the Final Underlier Value is less than the Barrier Value at maturity, investors will not receive cash but will instead receive a number of Amazon shares equal to the Physical Delivery Amount, defined as $1,000 divided by the Initial Underlier Value, rounded to four decimal places. Fractional shares will be settled in cash based on the Final Underlier Value. The filing states explicitly that under these circumstances, investors will receive shares of Amazon that will likely be worth significantly less than the principal amount of their Notes and could be worth nothing at maturity. This represents a full principal-at-risk structure below the 68% barrier level.

Pricing, Estimated Value, and Underwriting Fees Disclosed in the Filing

The filing discloses that the Notes are offered to the public at 100% of their principal amount, or $1,000 per Note. However, the initial estimated value of the Notes, as determined by Royal Bank of Canada as of the Trade Date, is expected to fall between $924.00 and $974.00 per $1,000 principal amount. This range represents a discount of between $26.00 and $76.00 per Note relative to the public offering price, reflecting embedded costs including the underwriting discount and the economic terms of the structured product.

The underwriting discount and commissions are disclosed at 1.50% of the principal amount, with proceeds to Royal Bank of Canada stated at 98.50% per Note. The filing also notes that Royal Bank of Canada or one of its affiliates may pay selling concessions of up to $15.00 per $1,000 principal amount to registered broker-dealers involved in the distribution. Additionally, a referral fee of up to $6.50 per $1,000 principal amount may be paid to unaffiliated broker-dealers. For investors purchasing through certain fee-based advisory accounts, the effective price may range between $985.00 and $1,000.00 per $1,000 principal amount, with some dealers potentially forgoing part or all of their underwriting discount.

Amazon.com as the Underlying Reference Stock

The Underlier for these Notes is the common stock of Amazon.com, Inc., one of the world's largest companies by market capitalization, with its shares trading on NASDAQ under the ticker AMZN. Amazon operates across multiple business segments, including its global e-commerce marketplace, Amazon Web Services cloud computing division, advertising services, and subscription offerings such as Amazon Prime. The performance of Amazon's stock across the monthly observation dates is the sole determinant of whether contingent coupons are paid, whether the Notes are automatically called, and whether investors receive their full principal at maturity.

Because the Notes are entirely linked to a single stock rather than a basket or index, the filing suggests that the concentration risk is significant. Any adverse developments specific to Amazon — including earnings disappointments, regulatory actions, macroeconomic headwinds affecting consumer spending or cloud demand, or broader market dislocations — could cause Amazon's stock to fall below the 68% Barrier Value, exposing investors to substantial or total loss of their invested principal. The filing notes that Royal Bank of Canada's credit risk is also a factor, as all payments on the Notes are subject to the issuer's ability to meet its obligations.

Credit Risk, Deposit Insurance Exclusions, and Regulatory Status

The filing contains several important disclosures relating to the regulatory and credit status of the Notes. Royal Bank of Canada makes clear that the Notes are not deposits insured by the Canada Deposit Insurance Corporation, the U.S. Federal Deposit Insurance Corporation, or any other Canadian or U.S. governmental agency or instrumentality. As such, investors in these Notes do not benefit from the deposit protection frameworks that apply to conventional bank deposits held at Royal Bank of Canada or other insured institutions.

The filing further states that the Notes are not bail-inable notes and are not subject to conversion into Royal Bank of Canada's common shares under subsection 39.2(2.3) of the Canada Deposit Insurance Corporation Act. All payments on the Notes — including contingent coupons, any automatic call payment, and maturity proceeds — remain subject to the credit risk of Royal Bank of Canada as issuer. The filing also confirms that neither the SEC, any state securities commission, nor any other regulatory body has approved or disapproved of the Notes or passed judgment on the accuracy of the pricing supplement.

Listing Status, Liquidity Considerations, and Secondary Market Access

The filing discloses that the Notes will not be listed on any securities exchange following issuance. This means that investors who wish to exit their position prior to the Maturity Date of September 1, 2027 will need to rely on any secondary market that RBC Capital Markets, LLC may make in the Notes, which is not guaranteed. The absence of an exchange listing is a material liquidity consideration, as it may be difficult or impossible to sell the Notes before maturity at a price that reflects their theoretical value.

The filing notes that the market value of the Notes at any time will reflect many factors and cannot be predicted with accuracy, and that the market value may be less than the initial estimated value range of $924.00 to $974.00 per $1,000 principal amount. Factors that could influence secondary market pricing include changes in Amazon's stock price, implied volatility, interest rates, Royal Bank of Canada's credit spreads, and the passage of time. Investors should be aware that the initial estimated value is not the same as the public offering price, and the gap between the two reflects costs embedded in the product at issuance.

Regulatory Framework and Supporting Offering Documents

The Notes are being offered pursuant to Registration Statement No. 333-275898 and filed pursuant to Rule 424(b)(2). The offering is governed by a suite of documents, including the prospectus dated December 20, 2023, the prospectus supplement dated December 20, 2023, and Product Supplement No. 1B dated July 22, 2025. The filing states that the pricing supplement, together with these documents, contains the terms of the Notes and supersedes all prior or contemporaneous oral statements as well as any other written materials, including preliminary or indicative pricing terms.

Because the supplement reviewed here is a preliminary version subject to completion, several key figures — including the Initial Underlier Value, the precise Coupon Threshold dollar amount, the Barrier Value dollar amount, the Physical Delivery Amount, and the aggregate principal amount of the offering — were left blank pending finalization. The final pricing supplement is expected to set forth these figures along with the confirmed initial estimated value. Investors and advisors reviewing the terms of the Notes should consult the final pricing supplement once published, as it will supersede the preliminary version filed on July 13, 2026.