f1221120424b2.htm
     
                  RBC Capital Markets®
Filed Pursuant to Rule 424(b)(2) 
Registration Statement No. 333-171806 
     
 
 
 
   
Pricing Supplement
 
Dated December 21, 2012
 
To the Product Prospectus Supplement ERN-EI-1, Prospectus
Supplement, and Prospectus, Each Dated January 28, 2011
     
$1,498,000
 
Buffered Bullish Enhanced Return Notes
Linked to the Dow Jones Industrial
AverageSM, Due December 27, 2017
Royal Bank of Canada
 
      
 
   
 
Royal Bank of Canada is offering the Buffered Bullish Enhanced Return Notes (the “Notes”) linked to the performance of the Reference Asset named below.
 
The CUSIP number for the Notes is 78008SRZ1. The Notes provide a 120.50% leveraged return, if the level of the Reference Asset increases from the Initial Level to the Final Level. The Notes do not pay interest. Investors will lose 1.6667% of the principal amount of the Notes for each 1% decrease from the Initial Level to the Final Level of more than 40%. Any payments on the Notes are subject to our credit risk.
 
Issue Date: December 27, 2012
 
Maturity Date: December 27, 2017
 
The Notes will not be listed on any U.S. securities exchange.
 
Investing in the Notes involves a number of risks. See “Risk Factors” beginning on page 1 of the prospectus supplement dated January 28, 2011, “Additional Risk Factors Specific to the Notes” beginning on page PS-4 of the product prospectus supplement dated January 28, 2011, and “Selected Risk Considerations” on page P-6 of this pricing supplement.
 
The Notes will not constitute deposits insured by the Canada Deposit Insurance Corporation, the U.S. Federal Deposit Insurance Corporation (the “FDIC”) or any other Canadian or U.S. government agency or instrumentality.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined that this pricing supplement is truthful or complete. Any representation to the contrary is a criminal offense.
 
 
Per Note
 
Total
Price to public
100.00%
 
$1,498,000
Underwriting discounts and commissions
   0.25%
 
$3,745
Proceeds to Royal Bank of Canada
99.75%
 
$1,494,255
 
The price at which you purchase the Notes includes hedging costs and profits that Royal Bank of Canada or its affiliates expect to incur or realize.  These costs and profits will reduce the secondary market price, if any secondary market develops, for the Notes.  As a result, you may experience an immediate and substantial decline in the market value of your Notes on the Issue Date.
 
RBC Capital Markets, LLC, which we refer to as RBCCM, acting as agent for Royal Bank of Canada, received a commission of $2.50 per $1,000 in principal amount of the Notes and used a portion of that commission to allow selling concessions to other dealers of up to $2.50 per $1,000 in principal amount of the Notes. The other dealers may forgo, in their sole discretion, some or all of their selling concessions.  The price of the Notes included a profit of $20.00 per $1,000 in principal amount of the Notes earned by Royal Bank of Canada in hedging its exposure under the Notes. The total of the commission received by RBCCM, which includes concessions to be allowed to other dealers, and the hedging profits of Royal Bank of Canada, was $22.50 per $1,000 in principal amount of the Notes.
 
We may use this pricing supplement in the initial sale of the Notes.  In addition, RBCCM or another of our affiliates may use this pricing supplement in a market-making transaction in the Notes after their initial sale.  Unless we or our agent informs the purchaser otherwise in the confirmation of sale, this pricing supplement is being used in a market-making transaction.
 
RBC Capital Markets, LLC
 

 
   
 
 
 
 
 
 
   
Buffered Bullish Enhanced Return Notes
Linked to the the Dow Jones Industrial AverageSM,
Due December 27, 2017
 
 
 
 
  
 
SUMMARY
 
The information in this “Summary” section is qualified by the more detailed information set forth in this pricing supplement, the product prospectus supplement, the prospectus supplement, and the prospectus.
 
       
Issuer:
Royal Bank of Canada (“Royal Bank”)
     
 
Issue:
Senior Global Medium-Term Notes, Series E
     
 
Underwriter:
RBC Capital Markets, LLC (“RBCCM”)
     
 
Reference Asset:
Dow Jones Industrial AverageSM
     
 
Bloomberg Ticker:
INDU
     
 
Currency:
U.S. Dollars
     
 
Minimum
Investment:
$1,000 and minimum denominations of $1,000 in excess thereof
     
 
Pricing Date:
December 21, 2012
     
 
Issue Date:
December 27, 2012
     
 
CUSIP:
78008SRZ1
     
 
Valuation Date:
December 21, 2017
     
 
Payment at Maturity
(if held to maturity):
If, on the Valuation Date, the Percentage Change is positive, then the investor will receive an amount per $1,000 principal amount per Note equal to:
 
Principal Amount + (Principal Amount x Percentage Change x Leverage Factor)
     
   
If, on the Valuation Date, the Percentage Change is less than or equal to 0%, but not by more than the Buffer Percentage (that is, the Percentage Change is between zero and -40%), then the investor will receive the principal amount only.
     
   
If, on the Valuation Date, the Percentage Change is negative, by more than the Buffer Percentage (that is, the Percentage Change is between -40.01% and -100%), then the investor will receive a cash payment equal to:
 
Principal Amount + [Principal Amount x (Percentage Change + Buffer Percentage) x Downside Multiplier]
     
 
Percentage Change:
The Percentage Change, expressed as a percentage, is calculated using the following formula:
     
   
Final Level – Initial Level
Initial Level
     
 
Initial Level:
13,190.84
     
 
Final Level:
The closing level of the Reference Asset on the Valuation Date.
     
 
Leverage Factor:
120.50%
 
RBC Capital Markets, LLC
P-2

 
   
 
 
 
 
 
 
   
Buffered Bullish Enhanced Return Notes
Linked to the the Dow Jones Industrial AverageSM,
Due December 27, 2017
 
 
 
 
  
 
       
Buffer Percentage:
40%
     
 
Buffer Level:
7,914.50 (60% of the Initial Level, rounded to two decimal places)
     
 
Downside Multiplier:
1.6667
     
 
Maturity Date:
December 27, 2017, subject to extension for market and other disruptions, as described in the product prospectus supplement dated January 28, 2011.
     
 
Term:
Five (5) years
     
 
Principal at Risk:
The Notes are NOT principal protected.  You may lose a substantial portion of your principal amount at maturity if there is a percentage decrease from the Initial Level to the Final Level of more than 40%.
     
 
Calculation Agent:
RBCCM
     
 
U.S. Tax Treatment:
By purchasing a Note, each holder agrees (in the absence of a change in law, an administrative determination or a judicial ruling to the contrary) to treat the Note as a pre-paid cash-settled derivative contract for U.S. federal income tax purposes.  However, the U.S. federal income tax consequences of your investment in the Notes are uncertain and the Internal Revenue Service could assert that the Notes should be taxed in a manner that is different from that described in the preceding sentence.  Please see the discussion in this pricing supplement under “Supplemental Discussion of U.S. Federal Income Tax Consequences” and the discussion (including the opinion of our counsel Morrison & Foerster LLP) in the product prospectus supplement dated January 28, 2011 under “Supplemental Discussion of U.S. Federal Income Tax Consequences,” which applies to the Notes.
     
 
Secondary Market:
RBCCM (or one of its affiliates), though not obligated to do so, plans to maintain a secondary market in the Notes after the Issue Date.  The amount that you may receive upon sale of your Notes prior to maturity may be less than the principal amount of your Notes.
     
 
Listing:
The Notes will not be listed on any securities exchange.
     
 
Clearance and
Settlement:
DTC global (including through its indirect participants Euroclear and Clearstream, Luxembourg as described under “Description of Debt Securities—Ownership and Book-Entry Issuance” in the prospectus dated January 28, 2011).
     
 
Terms Incorporated
in the Master Note:
All of the terms appearing above the item captioned “Secondary Market” on pages P-2 and P-3 of this pricing supplement and the terms appearing under the caption “General Terms of the Notes” in the product prospectus supplement dated January 28, 2011, as modified by this pricing supplement.
 
RBC Capital Markets, LLC
P-3

 
   
 
 
 
 
 
 
   
Buffered Bullish Enhanced Return Notes
Linked to the the Dow Jones Industrial AverageSM,
Due December 27, 2017
 
 
 
 
  
 
ADDITIONAL TERMS OF YOUR NOTES
 
You should read this pricing supplement together with the prospectus dated January 28, 2011, as supplemented by the prospectus supplement dated January 28, 2011 and the product prospectus supplement dated January 28, 2011, relating to our Senior Global Medium-Term Notes, Series E, of which these Notes are a part. Capitalized terms used but not defined in this pricing supplement will have the meanings given to them in the product prospectus supplement. In the event of any conflict, this pricing supplement will control.  The Notes vary from the terms described in the product prospectus supplement in several important ways.  You should read this pricing supplement carefully.
 
This pricing supplement, together with the documents listed below, 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, correspondence, trade ideas, structures for implementation, sample structures, brochures or other educational materials of ours. You should carefully consider, among other things, the matters set forth in “Risk Factors” in the prospectus supplement dated January 28, 2011 and “Additional Risk Factors Specific to the Notes” in the product prospectus supplement dated January 28, 2011, as the Notes involve risks not associated with conventional debt securities. We urge you to consult your investment, legal, tax, accounting and other advisors before you invest in the Notes. You may access these documents on the Securities and Exchange Commission (the “SEC”) website at www.sec.gov as follows (or if that address has changed, by reviewing our filings for the relevant date on the SEC website):
 
Prospectus dated January 28, 2011:
http://www.sec.gov/Archives/edgar/data/1000275/000121465911000309/f127115424b3.htm

Prospectus Supplement dated January 28, 2011:
http://www.sec.gov/Archives/edgar/data/1000275/000121465911000311/m127114424b3.htm

Product Prospectus Supplement ERN-EI-1 dated January 28, 2011:
http://www.sec.gov/Archives/edgar/data/1000275/000121465911000380/m22111424b5.htm

Our Central Index Key, or CIK, on the SEC website is 1000275.  As used in this pricing supplement, the “Company,” “we,” “us,” or “our” refers to Royal Bank of Canada.
 
RBC Capital Markets, LLC
P-4

 
   
 
 
 
 
 
 
   
Buffered Bullish Enhanced Return Notes
Linked to the the Dow Jones Industrial AverageSM,
Due December 27, 2017
 
 
 
 
  
 
HYPOTHETICAL RETURNS
 
The examples set out below are included for illustration purposes only. The hypothetical Percentage Changes of the Reference Asset used to illustrate the calculation of the Payment at Maturity (rounded to two decimal places) are not estimates or forecasts of the Final Level or the level of the Reference Asset on the Valuation Date or on any trading day prior to the Maturity Date. All examples assume that a holder purchased Notes with an aggregate principal amount of $1,000, the Buffer Percentage of 40% (the Buffer Level is 60% of the Initial Level), the Leverage Factor of 120.50% and the Downside Multiplier of 1.6667, and that no market disruption event occurs on the Valuation Date.
 

Example 1—
Calculation of the Payment at Maturity where the Percentage Change is positive.
   
 
Percentage Change:
10%
     
 
Payment at Maturity:
$1,000 + ($1,000 x 10% x 120.50%) = $1,000 + $120.50 = $1,120.50
     
 
On a $1,000 investment, a 10% Percentage Change results in a Payment at Maturity of $1,120.50,
a 12.05% return on the Notes.
   

Example 2—
Calculation of the Payment at Maturity where the Percentage Change is negative (but not by more than the Buffer Percentage).
   
 
Percentage Change:
-8%
     
 
Payment at Maturity:
At maturity, if the Percentage Change is negative BUT not by more than the Buffer Percentage, then the Payment at Maturity will equal the principal amount.
     
 
On a $1,000 investment, a -8% Percentage Change results in a Payment at Maturity of $1,000, a 0% return on the Notes.
 

Example 3—
Calculation of the Payment at Maturity where the Percentage Change is negative (by more than the Buffer Percentage).
   
 
Percentage Change:
-50%
     
 
Payment at Maturity:
$1,000 + [$1,000 x (-50% +40%) x 1.6667)] = $1,000 -$166.67 = $833.33
     
 
On a $1,000 investment, a -50% Percentage Change results in a Payment at Maturity of $833.33,
a -16.67% return on the Notes.
 
RBC Capital Markets, LLC
P-5

 
   
 
 
 
 
 
 
   
Buffered Bullish Enhanced Return Notes
Linked to the the Dow Jones Industrial AverageSM,
Due December 27, 2017
 
 
 
 
  
 
SELECTED RISK CONSIDERATIONS
 
An investment in the Notes involves significant risks.  Investing in the Notes is not equivalent to investing directly in the Reference Asset.  These risks are explained in more detail in the section “Additional Risk Factors Specific to the Notes,” beginning on page PS-4 of the product prospectus supplement.  In addition to the risks described in the prospectus supplement and the product prospectus supplement, you should consider the following:
 
 
·
Principal at Risk – Investors in the Notes could lose a substantial portion of their principal amount if there is a decline in the level of the Reference Asset.  You will lose 1.6667% of the principal amount of your Notes for each 1% that the Final Level is less than the Initial Level by more than 40%.
 
 
·
The Notes Do Not Pay Interest and Your Return May Be Lower than the Return on a Conventional Debt Security of Comparable Maturity – There will be no periodic interest payments on the Notes as there would be on a conventional fixed-rate or floating-rate debt security having the same maturity.  The return that you will receive on the Notes, which could be negative, may be less than the return you could earn on other investments.  Even if your return is positive, your return may be less than the return you would earn if you bought a conventional senior interest bearing debt security of Royal Bank.
 
 
·
Your Potential Payment at Maturity Is Limited – The Notes will provide less opportunity to participate in the appreciation of the Reference Asset than an investment in a security linked to the Reference Asset providing full participation in the appreciation, because the payment at maturity will not exceed the Maximum Redemption Amount.  Accordingly, your return on the Notes may be less than your return would be if you made an investment in a security directly linked to the positive performance of the Reference Asset.
 
 
·
Payments on the Notes Are Subject to Our Credit Risk, and Changes in Our Credit Ratings Are Expected to Affect the Market Value of the Notes – The Notes are Royal Bank’s senior unsecured debt securities.  As a result, your receipt of the amount due on the maturity date is dependent upon Royal Bank’s ability to repay its obligations at that time.  This will be the case even if the level of the Reference Asset increases after the pricing date.  No assurance can be given as to what our financial condition will be at the maturity of the Notes.
 
 
·
There May Not Be an Active Trading Market for the Notes—Sales in the Secondary Market May Result in Significant Losses – There may be little or no secondary market for the Notes.  The Notes will not be listed on any securities exchange.  RBCCM and other affiliates of Royal Bank may make a market for the Notes; however, they are not required to do so.  RBCCM or any other affiliate of Royal Bank may stop any market-making activities at any time.  Even if a secondary market for the Notes develops, it may not provide significant liquidity or trade at prices advantageous to you.  We expect that transaction costs in any secondary market would be high.  As a result, the difference between bid and asked prices for your Notes in any secondary market could be substantial.
 
 
·
You Will Not Have Any Rights to the Securities Included in the Reference Asset – As a holder of the Notes, you will not have voting rights or rights to receive cash dividends or other distributions or other rights that holders of securities included in the Reference Asset would have.
 
 
·
The Inclusion in the Purchase Price of the Notes of a Selling Concession and of Royal Bank’s Cost of Hedging its Market Risk under the Notes Will Adversely Affect the Value of the Notes Prior to Maturity – The price at which you purchase of the Notes includes a selling concession (including a broker’s commission), as well as the costs that Royal Bank (or one of its affiliates) expects to incur in the hedging of its market risk under the Notes. Such hedging costs include the expected cost of undertaking this hedge, as well as the profit that Royal Bank (or its affiliates) expects to realize in consideration for assuming the risks inherent in providing such hedge.  As a result, assuming no change in market conditions or any other relevant factors, the price, if any, at which you may be able to sell your Notes prior to maturity may be less than your original purchase price. The Notes are not designed to be short-term trading instruments.  Accordingly, you should be able and willing to hold your Notes to maturity.
 
RBC Capital Markets, LLC
P-6

 
   
 
 
 
 
 
 
   
Buffered Bullish Enhanced Return Notes
Linked to the the Dow Jones Industrial AverageSM,
Due December 27, 2017
 
 
 
 
  
 
 
·
Market Disruption Events and Adjustments – The payment at maturity and the valuation date are subject to adjustment as described in the product prospectus supplement.  For a description of what constitutes a market disruption event as well as the consequences of that market disruption event, see “General Terms of the Notes—Market Disruption Events” in the product prospectus supplement.
 
 
 
 
 
 
RBC Capital Markets, LLC
P-7

 
   
 
 
 
 
 
 
   
Buffered Bullish Enhanced Return Notes
Linked to the the Dow Jones Industrial AverageSM,
Due December 27, 2017
 
 
 
 
  
 
INFORMATION REGARDING THE REFERENCE ASSET

The Dow Jones Industrial AverageSM

We have obtained all information regarding the DJIA contained in this pricing supplement from publicly available information. That information reflects the policies of, and is subject to change by the S&P Dow Jones Indices LLC, the Index Sponsor. The Index Sponsor, which owns the copyright and all other rights to the DJIA, has no obligation to continue to publish, and may discontinue publication of the DJIA.  Neither we nor RBCCM accepts any responsibility for the calculation, maintenance or publication of the DJIA or any successor index.

The DJIA is widely used as an indicator of the pattern of the price movement of U.S. equities.  The calculation of the level of the DJIA, discussed below in further detail, is a price-weighted average of the stocks of 30 blue-chip companies that are generally the leaders in their industry.

The composition of the DJIA is not limited to traditionally defined industrial stocks.  Instead, the companies are chosen from sectors of the economy most representative of the country’s economic health.  The DJIA serves as a measure of the entire U.S. market, covering such diverse industries as financial services, technology, consumer services, health care and consumer goods.  The editors of The Wall Street Journal maintain and review the DJIA and from time to time, in their sole discretion, may add companies to, or delete companies from, the DJIA to achieve the objectives stated above.  Composition changes are rare, however, and generally occur only after events such as corporate acquisitions or other dramatic shifts in a component’s core business.  When such an event causes one component to be replaced, the entire index is reviewed, and therefore, multiple component changes are often implemented simultaneously.  A stock typically is added if it has an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors, and accurately represents the sector(s) covered by the DJIA.

The DJIA is price-weighted rather than market capitalization-weighted, which means that weightings are based only on changes in the stocks’ prices, rather than by both price changes and changes in the number of shares outstanding.  The divisor used to calculate the price-weighted average of the DJIA is not simply the number of component stocks; rather, the divisor is adjusted to smooth out the effects of stock splits and other corporate actions.  While this methodology reflects current practice in calculating the DJIA, no assurance can be given that the DJIA Sponsor will not modify or change this methodology in a manner that may affect the amount payable on the Notes at maturity.

License Agreement

S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (S&P) and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones).  These trademarks have been licensed for use by S&P Dow Jones Indices LLC. “DJIASM” is a trademark of Dow Jones. The trademark has been sublicensed for certain purposes by us. The DJIA is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by us. 

The Notes are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or any of their respective affiliates (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices make no representation or warranty, express or implied, to the holders of the Notes or any member of the public regarding the advisability of investing in securities generally or in the Notes particularly or the ability of the DJIA to track general market performance. S&P Dow Jones Indices’ only relationship to us with respect to the DJIA is the licensing of the DJIA and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices and/or its third party licensors. The DJIA is determined, composed and calculated by S&P Dow Jones Indices without regard to us or the Notes.  S&P Dow Jones Indices have no obligation to take our needs or the needs of us or holders of the Notes into consideration in determining, composing or calculating the DJIA. S&P Dow Jones Indices are not responsible for and have not participated in the determination of the prices, and amount of the Notes or the timing of the issuance or sale of the Notes or in the determination or calculation of the equation by which the Notes are to be converted into cash. S&P Dow Jones Indices have no obligation or liability in connection with the administration, marketing or trading of the Notes. There is no assurance that investment products based on the DJIA will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC and its subsidiaries are not investment advisors.  Inclusion of a security or futures contract within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security or futures contract, nor is it considered to be investment advice. Notwithstanding the foregoing, CME Group Inc. and its affiliates may independently issue and/or sponsor financial products unrelated to the Notes currently being issued by us, but which may be similar to and competitive with the Notes. In addition, CME Group Inc. and its affiliates may trade financial products which are linked to the performance of the DJIA. It is possible that this trading activity will affect the value of the Notes.
 
RBC Capital Markets, LLC
P-8

 
   
 
 
 
 
 
 
   
Buffered Bullish Enhanced Return Notes
Linked to the the Dow Jones Industrial AverageSM,
Due December 27, 2017
 
 
 
 
  
 
S&P DOW JONES INDICES DO NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE DJIA OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY US, HOLDERS OF THE NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE DJIA OR WITH RESPECT TO ANY DATA RELATED THERETO.  WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBLITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND US, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.
 
 
 
 
 
 
RBC Capital Markets, LLC
P-9

 
   
 
 
 
 
 
 
   
Buffered Bullish Enhanced Return Notes
Linked to the the Dow Jones Industrial AverageSM,
Due December 27, 2017
 
 
 
 
  
 
Historical Information
 
The graph below sets forth the information relating to the historical performance of the Reference Asset. In addition, below the graph is a table setting forth the intra-day high, intra-day low and period-end closing levels of the Reference Asset. The information provided in this table is for the four calendar quarters of 2009, 2010, and 2011, the first, second and third calendar quarters of 2012 and for the period from October 1, 2012 to December 21, 2012.
 
We obtained the information regarding the historical performance of the Reference Asset in the chart below from Bloomberg Financial Markets.
 
We have not independently verified the accuracy or completeness of the information obtained from Bloomberg Financial Markets. The historical performance of the Reference Asset should not be taken as an indication of its future performance, and no assurance can be given as to the Final Level of the Reference Asset. We cannot give you assurance that the performance of the Reference Asset will result in any positive return on your initial investment.
 

Period-
Start Date
 
Period-
End Date
 
High Intra-Day Level
of the Reference Asset
 
Low Intra-Day Level
of the Reference Asset
 
Period-End Closing Level
of the Reference Asset
                 
1/1/2009
 
3/31/2009
 
 9,088.06
 
6,469.95
 
7,608.92
4/1/2009
 
6/30/2009
 
8,877.93
 
7,483.87
 
8,447.00
7/1/2009
 
9/30/2009
 
9,917.99
 
8,087.19
 
9,712.28
10/1/2009
 
12/31/2009
 
10,580.33
 
9,430.08
 
10,428.05
                 
1/1/2010
 
3/31/2010
 
10,955.48
 
9,835.09
 
10,856.63
4/1/2010
 
6/30/2010
 
11,258.01
 
9,753.84
 
9,774.02
7/1/2010
 
9/30/2010
 
10,948.88
 
9,614.32
 
10,788.05
10/1/2010
 
12/31/2010
 
11,625.00
 
10,711.12
 
11,577.51
                 
1/1/2011
 
3/31/2011
 
12,391.29
 
11,555.48
 
12,319.73
4/1/2011
 
6/30/2011
 
12,876.00
 
11,862.53
 
12,414.34
7/1/2011
 
9/30/2011
 
12,753.89
 
10,597.14
 
10,913.38
10/1/2011
 
12/31/2011
 
12,328.47
 
10,404.49
 
12,217.56
                 
                 
1/01/2012
 
3/31/2012
 
13,289.08
 
12,221.19
 
13,212.04
4/1/2012
 
6/30/2012
 
13,338.66
 
12,035.09
 
12,880.09
7/1/2012
 
9/28/2012
 
13,653.24
 
12,492.25
 
13,437.13
10/1/2012
 
12/21/2012
 
13,661.87
 
12,471.49
 
13,190.84
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
 
RBC Capital Markets, LLC
P-10

 
   
 
 
 
 
 
 
   
Buffered Bullish Enhanced Return Notes
Linked to the the Dow Jones Industrial AverageSM,
Due December 27, 2017
 
 
 
 
  
 
SUPPLEMENTAL PLAN OF DISTRIBUTION
 
We expect that delivery of the Notes will be made against payment for the Notes on or about December 27, 2012, which is the third (3rd) business day following the Pricing Date (this settlement cycle being referred to as “T+3”).  See “Supplemental Plan of Distribution” in the prospectus supplement dated January 28, 2011. For additional information as to the relationship between us and RBCCM, please see the section “Plan of Distribution—Conflicts of Interest” in the prospectus dated January 28, 2011.
 
RBCCM will pay fees of up to $5.00 per $1,000 in principal amount of the Notes to one or more FINRA members for marketing services relating to this offering.
 
SUPPLEMENTAL DISCUSSION OF
U.S. FEDERAL INCOME TAX CONSEQUENCES
 
The following disclosure supplements the discussion in the product prospectus supplement dated January 28, 2011 under “Supplemental Discussion of U.S. Federal Income Tax Consequences.”
 
Dividend Equivalent. A “dividend equivalent” payment is treated as a dividend from sources within the U.S. and such payments generally would be subject to a 30% U.S. withholding tax if paid to a non-U.S. holder (as defined in the product prospectus supplement).  Under recently proposed U.S. Treasury Department regulations, certain payments that are contingent upon or determined by reference to U.S. source dividends, including payments reflecting adjustments for extraordinary dividends, with respect to equity-linked instruments, including the Notes, may be treated as dividend equivalents.  If enacted in their current form, the regulations will impose a withholding tax on payments made on the Notes on or after January 1, 2014 that are treated as dividend equivalents.  In that case, we (or the applicable paying agent) would be entitled to withhold taxes without being required to pay any additional amounts with respect to amounts so withheld.  Further, non-U.S. holders may be required to provide certifications prior to, or upon the sale, redemption or maturity of the Notes in order to minimize or avoid U.S. withholding taxes.
 
Foreign Account Tax Compliance Act. The Internal Revenue Service has issued notices and the Treasury Department has issued proposed regulations affecting the legislation enacted on March 18, 2010 and discussed in the product prospectus supplement dated January 28, 2011 under “Supplemental Discussion of U.S. Federal Income Tax Consequences—Supplemental U.S. Tax Considerations—Legislation Affecting Taxation of Notes Held By or Through Foreign Entities.”  Pursuant to the Internal Revenue Service notices, withholding requirements with respect to payments made on the Notes will generally begin no earlier than January 1, 2014.  Pursuant to the proposed regulations, if finalized in their current form, the withholding tax will not be imposed on payments pursuant to obligations outstanding on January 1, 2013.  Holders are urged to consult their own tax advisors regarding the implications of this legislation and subsequent guidance on their investment in the Notes.
 
RBC Capital Markets, LLC
P-11

 
   
 
 
 
 
 
 
   
Buffered Bullish Enhanced Return Notes
Linked to the the Dow Jones Industrial AverageSM,
Due December 27, 2017
 
 
 
 
  
 
VALIDITY OF THE NOTES
 
In the opinion of Norton Rose Canada LLP, the issue and sale of the Notes has been duly authorized by all necessary corporate action of the Bank in conformity with the Indenture, and when the Notes have been duly executed, authenticated and issued in accordance with the Indenture, the Notes will be validly issued and, to the extent validity of the Notes is a matter governed by the laws of the Province of Ontario or Québec, or the laws of Canada applicable therein, and will be valid obligations of the Bank, subject to applicable bankruptcy, insolvency and other laws of general application affecting creditors’ rights, equitable principles, and subject to limitations as to the currency in which judgments in Canada may be rendered, as prescribed by the Currency Act (Canada).  This opinion is given as of the date hereof and is limited to the laws of the Provinces of Ontario and Quebec and the federal laws of Canada applicable thereto.  In addition, this opinion is subject to customary assumptions about the Trustee’s authorization, execution and delivery of the Indenture and the genuineness of signatures and certain factual matters, all as stated in the letter of such counsel dated March 6, 2012, which has been filed as Exhibit 5.1 to Royal Bank’s Form 6-K filed with the SEC on March 6, 2012.
 
In the opinion of Morrison & Foerster LLP, when the Notes have been duly completed in accordance with the Indenture and issued and sold as contemplated by the prospectus supplement and the prospectus, the Notes will be valid, binding and enforceable obligations of Royal Bank, entitled to the benefits of the Indenture, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability (including, without limitation, concepts of good faith, fair dealing and the lack of bad faith).  This opinion is given as of the date hereof and is limited to the laws of the State of New York.  This opinion is subject to customary assumptions about the Trustee’s authorization, execution and delivery of the Indenture and the genuineness of signatures and to such counsel’s reliance on the Bank and other sources as to certain factual matters, all as stated in the legal opinion dated March 6, 2012, which has been filed as Exhibit 5.2 to the Bank’s Form 6-K dated March 6, 2012.
 
RBC Capital Markets, LLC
P-12