Royal Bank of Canada has completed several fixed-income deals totaling CA$2.6 billion in subordinated and Limited Recourse Capital Notes while lifting its quarterly dividend to CA$1.76 per share. The issuance includes CA$1.50 billion in fixed-to-floating subordinated NVCC notes due 2036 and CA$1.10 billion in fixed-to-floating Limited Recourse Capital Notes due 2086, alongside a series of new senior and subordinated bond issues in multiple currencies. The bank's narrative projects CA$78.1 billion in revenue and CA$24.9 billion in earnings by 2029, implying 5.9% yearly revenue growth and about a CA$3.3 billion earnings increase from CA$21.6 billion today. Three fair value estimates for RBC range from CA$298.79 to CA$363.49, with the bank's forecasts yielding a CA$298.79 fair value, a 5% upside to its current price. The heavy use of subordinated and Limited Recourse Capital Notes puts the focus on credit risk and how that could influence RBC's ability to sustain current capital returns and earnings quality over time.
Royal Bank of CanadaRBC completed CA$2.6B in subordinated and Limited Recourse Capital Notes and raised its quarterly dividend to CA$1.76 per share.
