Business Context and Reporting Period
This Form 6-K filing covers the month of August 2013 for Royal Bank of Canada and RBC Covered Bond Guarantor Limited Partnership. The report relates to the registrants' U.S.$12,000,000,000 global covered bond programme under a Form F-3 shelf registration statement. The filing documents amendments to transaction agreements to comply with Canadian covered bond legislation under Part I.1 of the National Housing Act, administered by Canada Mortgage and Housing Corporation.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, or liquidity ratios. Instead, it details specific debt issuance activities:
- Covered Bond Issuance: U.S.$1,750,000,000 in 1.1250% Covered Bonds Due 2016.
- Covered Bond Issuance: EUR 2,000,000,000 in 1.625% Covered Bonds Due August 2020.
- Programme Capacity: Total global covered bond programme size is U.S.$12,000,000,000.
Material Changes
Material changes involve the amendment and restatement of key transaction agreements to align with updated Canadian covered bond legislation and the "Canadian Registered Covered Bond Programs Guide" (amended June 27, 2013). Specific changes include:
- Amended Underwriting Agreement for the U.S.$1.75 billion issuance.
- Amended Dealership Agreement, Trust Deed, Master Definitions Agreement, and Agency Agreement.
- Execution of standby agreements with Bank of Montreal to ensure continuity of account banking and Guaranteed Investment Contract (GIC) functions if the Bank can no longer perform them.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, management commentary on future earnings, or specific risk factors beyond the operational context of the bond programme. The primary contingency addressed is the operational risk of the Bank failing to perform its duties as account bank or GIC provider. To mitigate this, standby agreements (Exhibits 4.19 and 4.20) were established with an unaffiliated replacement bank (Bank of Montreal) to ensure a seamless transition.
Investor Verification Checklist
- Verify the terms and pricing of the U.S.$1.75 billion 1.1250% Covered Bonds Due 2016.
- Confirm the terms and pricing of the EUR 2.0 billion 1.625% Covered Bonds Due 2020.
- Review the amended transaction agreements to ensure compliance with the National Housing Act (Part I.1).
- Assess the standby arrangements with Bank of Montreal for account and GIC services.
- Check the status of the U.S.$12 billion global covered bond programme shelf registration (File No. 333-181552).