Prima Platinum Plan 16 will be available until 25 April and is linked to the performance of the FTSE 100 and S&P 500 indices. Besides the counterparty risk – RBC has a long-term credit rating of AA- from Standard & Poor’s – capital is at risk if either index closes more than 50% lower than its opening level at any close-of-business day during the investment term.
The strike date is 27 April, 2012, with the final level as at 27 April, 2017, with a maturity date of 12 May 2017. There are four annual measurement dates, starting on 29 April next year, at which point the plan will mature and pay 10% (gross) for each year the plan has been running if the FTSE 100 and S&P 500 are both above their opening level.
The plan has a five-year term and if it runs to maturity and the indices are at least equal to their opening level, the investment return will be 50%. If one or both indices are lower, there will be no investment return.
Capital return should the indices fall will reduce depending how far the indices fall.
