# EDGAR Filing Document

**Accession Number:** 0001000275
**File Stem:** 0001140361-23-015123
**Filing Date:** 2023-3
**Character Count:** 43493
**Document Hash:** 355cf069ca65b64b1d3a941c1d489e4f
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001140361-23-015123.hdr.sgml**: 20230331

**ACCESSION NUMBER**: 0001140361-23-015123

**CONFORMED SUBMISSION TYPE**: FWP

**PUBLIC DOCUMENT COUNT**: 3

**FILED AS OF DATE**: 20230331

**DATE AS OF CHANGE**: 20230331

**SUBJECT COMPANY**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ROYAL BANK OF CANADA
- **CENTRAL INDEX KEY:** 0001000275
- **STANDARD INDUSTRIAL CLASSIFICATION:** COMMERCIAL BANKS, NEC [6029]
- **IRS NUMBER:** 135357855
- **STATE OF INCORPORATION:** A6
- **FISCAL YEAR END:** 1031

**FILING VALUES:**
- **FORM TYPE:** FWP
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 333-259205
- **FILM NUMBER:** 23783376

**BUSINESS ADDRESS:**
- **STREET 1:** ROYAL BANK PLAZA
- **STREET 2:** 200 BAY STREET
- **CITY:** TORONTO
- **STATE:** A6
- **ZIP:** M5J2J5
- **BUSINESS PHONE:** 212-437-9267

**MAIL ADDRESS:**
- **STREET 1:** ROYAL BANK PLAZA
- **STREET 2:** 200 BAY STREET
- **CITY:** TORONTO
- **STATE:** A6
- **ZIP:** M5J2J5

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ROYAL BANK OF CANADA \
- **DATE OF NAME CHANGE:** 19950908
**FILED BY**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ROYAL BANK OF CANADA
- **CENTRAL INDEX KEY:** 0001000275
- **STANDARD INDUSTRIAL CLASSIFICATION:** COMMERCIAL BANKS, NEC [6029]
- **IRS NUMBER:** 135357855
- **STATE OF INCORPORATION:** A6
- **FISCAL YEAR END:** 1031

**FILING VALUES:**
- **FORM TYPE:** FWP

**BUSINESS ADDRESS:**
- **STREET 1:** ROYAL BANK PLAZA
- **STREET 2:** 200 BAY STREET
- **CITY:** TORONTO
- **STATE:** A6
- **ZIP:** M5J2J5
- **BUSINESS PHONE:** 212-437-9267

**MAIL ADDRESS:**
- **STREET 1:** ROYAL BANK PLAZA
- **STREET 2:** 200 BAY STREET
- **CITY:** TORONTO
- **STATE:** A6
- **ZIP:** M5J2J5

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ROYAL BANK OF CANADA \
- **DATE OF NAME CHANGE:** 19950908

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| ![](image00001.jpg) |
| &nbsp;&nbsp;&nbsp; The information in this preliminary terms supplement is not complete and may be changed.  |
| &nbsp;&nbsp; Preliminary Terms Supplement<br> Subject to Completion:<br> Dated March 30, 2023<br> Pricing Supplement Dated April __, 2023 to the Product Prospectus Supplement ERN-EI-1, the Prospectus Supplement and the Prospectus, Each Dated September 14, 2021<br> &nbsp;&nbsp;&nbsp; $ Barrier Absolute Enhanced Return Notes Linked to the<br> EURO STOXX 50<sup>®</sup> Index, Due April 26, 2028<br> Royal Bank of Canada<br>|

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**Royal Bank of Canada is offering Barrier Absolute Enhanced Return Notes (the "Notes") linked to the performance of the EURO STOXX 50<sup>®</sup> Index (the "Reference Asset").**

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| | | |
|:---|:---|:---|
| Reference Asset | Initial Level\* | Barrier Level |
| EURO STOXX 50<sup>®</sup> Index ("SX5E") |  | 60% of the Initial Level |

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\* The Initial Level of the Reference Asset will be its closing level on the Trade Date.

• If the Final Level of the Reference Asset is greater than the Initial Level, the Notes will pay at maturity a return equal to 165.50% of the Percentage Change of the principal amount of the Notes.

• If the Final Level of the Reference Asset is less than or equal to the Initial Level, but is greater than or equal to 60% of its Initial Level (the "Barrier Level"), then the Notes will pay a one-for-one positive return equal to the absolute value of the Percentage Change.

• If the Final Level of the Reference Asset is less than the Barrier Level, investors will lose 1% of the principal amount of the Notes for each 1% decrease from the Initial Level to the Final Level. Accordingly, investors may lose all or a substantial portion of their principal amount.

<br> • Any payments on the Notes are subject to our credit risk.

<br> • The Notes do not pay interest.

<br> • The Notes will not be listed on any securities exchange.

Issue Date: April 26, 2023

Maturity Date: April 26, 2028

CUSIP: 78016HX39

Investing in the Notes involves a number of risks. See "Selected Risk Considerations" beginning on page P-7 of this terms supplement, "Additional Risk Factors Specific to the Notes" beginning on page PS-4 of the product prospectus supplement dated September 14, 2021, and "Risk Factors" beginning on page S-2 of the prospectus supplement dated September 14, 2021.

The Notes will not constitute deposits insured by the Canada Deposit Insurance Corporation, the U.S. Federal Deposit Insurance Corporation or any other Canadian or U.S. government agency or instrumentality. The Notes are not subject to conversion into our common shares under subsection 39.2(2.3) of the Canada Deposit Insurance Corporation Act.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined that this terms supplement is truthful or complete. Any representation to the contrary is a criminal offense.

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| | | |
|:---|:---|:---|
|  | Per Note | Total |
| Price to public | 100.00% | $|
| Underwriting discounts and commissions<sup>(1)</sup> | 0.00% | $|
| Proceeds to Royal Bank of Canada | 100.00% | $|

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<sup>(1)</sup> RBC Capital Markets, LLC ("RBCCM"), acting as our agent, will not receive a commission in connection with its sales of the Notes. We or one of our affiliates will pay a selected dealer a structuring fee of $7.00 per $1,000 in principal amount of the Notes. See "Supplemental Plan of Distribution (Conflicts of Interest)" below.

The initial estimated value of the Notes as of the Trade Date is expected to be between $920 and $970 per $1,000 in principal amount, and will be less than the price to public. The final pricing supplement relating to the Notes will set forth our estimate of the initial value of the Notes as of the Trade Date. The actual value of the Notes at any time will reflect many factors, cannot be predicted with accuracy, and may be less than this amount. We describe our determination of the initial estimated value in more detail below.

RBC Capital Markets, LLC

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<br>Barrier Absolute Enhanced Return Notes<br>Royal Bank of Canada <br>

SUMMARY

*The information in this "Summary" section is qualified by the more detailed information set forth in this terms supplement, the product prospectus supplement, the prospectus supplement, and the prospectus.*

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| | |
|:---|:---|
| General: | This terms supplement relates to an offering of Barrier Absolute Enhanced Return Notes linked to the Reference Asset (the "Notes"). |
| Issuer: | Royal Bank of Canada ("Royal Bank") |
| Trade Date (Pricing<br> Date): | April 21, 2023 |
| Issue Date: | April 26, 2023 |
| Valuation Date: | April 21, 2028 |
| Maturity Date: | April 26, 2028 |
| Denominations: | Minimum denomination of $1,000, and integral multiples of $1,000 thereafter. |
| Initial Level: | The closing level of the Reference Asset on the Trade Date. |
| Final Level: | The closing level of the Reference Asset on the Valuation Date. |
| Barrier Level: | 60% of the Initial Level. |
| Barrier Percentage: | 40% |
| Leverage Factor: | 165.50% |
| Payment at Maturity (if<br> held to maturity): | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We will pay you at maturity an amount based on the Final Level:<br> If the Final Level is ***greater than*** the Initial Level (that is, the Percentage Change is positive), then the investor will receive an amount per $1,000 in principal amount per Note equal to:<br> $1,000 + [$1,000 x (Percentage Change x Leverage Factor)]<br> If the Final Level *is* ***less than or equal to the Initial Level, but greater than or equal to the Barrier Level*** (that is, the Percentage Change is between -0.01% and -40.00%)**,** the investor will receive, for each $1,000 in principal amount of the Notes, a one-for-one positive return equal to the absolute value of the Percentage Change, calculated as follows:<br> $1,000 + [-1 x ($1,000 x Percentage Change)]<br> *In this case, you will receive a positive return on the Notes, even though the Percentage Change is negative.*<br> If the Final Level is ***less than the Barrier Level*** (that is, the Percentage Change is less than -40.00%), then the investor will receive, for each $1,000 in principal amount of the Notes:<br> $1,000 + ($1,000 x Percentage Change)<br> *In this case, you will lose all or a substantial portion of the principal amount.* |
| Percentage Change: | <u>Final Level – Initial Level</u><br> Initial Level |
| Calculation Agent: | RBC Capital Markets, LLC ("RBCCM") |

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P-2 RBC Capital Markets, LLC

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<br>Barrier Absolute Enhanced Return Notes<br>Royal Bank of Canada <br>

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| | |
|:---|:---|
| 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 section below, "Supplemental Discussion of U.S. Federal Income Tax Consequences," and the discussion (including the opinion of our special U.S. tax counsel, Ashurst LLP) in the product prospectus supplement dated September 14, 2021 under "Supplemental Discussion of U.S. Federal Income Tax Consequences," which apply to the Notes. |
| Secondary Market: | RBCCM (or one of its affiliates), though not obligated to do so, may maintain a secondary market in the Notes after the issue date. The amount that you may receive upon sale of the Notes prior to maturity may be less than the principal amount. |
| Listing: | The Notes will not be listed on any securities exchange. |
| Settlement: | DTC global (including through its indirect participants Euroclear and Clearstream, Luxembourg as described under "Ownership and Book-Entry Issuance" in the prospectus dated September 14, 2021). |
| Terms Incorporated in<br> the Master Note: | All of the terms appearing on the cover page and above the item captioned "Secondary Market" on pages P-2 and P-3 of this terms supplement, and the terms appearing under the captions "General Terms of the Notes" and "Supplemental Discussion of U.S. Federal Income Tax Consequences" in the product prospectus supplement dated September 14, 2021, as modified by this terms supplement. |

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*The Trade Date, issue date and other dates set forth above are subject to change, and will be set forth in the final pricing supplement relating to the Notes.*

P-3 RBC Capital Markets, LLC

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<br>Barrier Absolute Enhanced Return Notes<br>Royal Bank of Canada <br>

#### ADDITIONAL TERMS OF YOUR NOTES
You should read this terms supplement together with the prospectus dated September 14, 2021, as supplemented by the prospectus supplement dated September 14, 2021 and the product prospectus supplement dated September 14, 2021, relating to our Senior Global Medium Term Notes, Series I, of which these Notes are a part. Capitalized terms used but not defined in this terms supplement will have the meanings given to them in the product prospectus supplement. In the event of any conflict, this terms supplement will control. ***The Notes vary from the terms described in the product prospectus supplement in several important ways. You should read this terms supplement carefully.***

This terms 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 September 14, 2021 and "Additional Risk Factors Specific to the Notes" in the product prospectus supplement dated September 14, 2021, 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 September 14, 2021:

[<u>https://www.sec.gov/Archives/edgar/data/1000275/000121465921009470/rbc911212424b3.htm</u>](https://www.sec.gov/Archives/edgar/data/1000275/000121465921009470/rbc911212424b3.htm)

Prospectus Supplement dated September 14, 2021:

[<u>https://www.sec.gov/Archives/edgar/data/1000275/000121465921009472/rbcsupp911210424b3.htm</u>](https://www.sec.gov/Archives/edgar/data/1000275/000121465921009472/rbcsupp911210424b3.htm)

Product Prospectus Supplement ERN-EI-1 dated September 14, 2021:

[https://www.sec.gov/Archives/edgar/data/1000275/000114036121031150/brhc10028901_424b5.htm](https://www.sec.gov/Archives/edgar/data/1000275/000114036121031150/brhc10028901_424b5.htm)

Our Central Index Key, or CIK, on the SEC website is 1000275. As used in this terms supplement, "we," "us," or "our" refers to Royal Bank of Canada.

Royal Bank of Canada has filed a registration statement (including a product prospectus supplement, a prospectus supplement, and a prospectus) with the SEC for the offering to which this terms supplement relates. Before you invest, you should read those documents and the other documents relating to this offering that we have filed with the SEC for more complete information about us and this offering. You may obtain these documents without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, Royal Bank of Canada, any agent or any dealer participating in this offering will arrange to send you the product prospectus supplement, the prospectus supplement and the prospectus if you so request by calling toll-free at 1-877-688-2301.

P-4 RBC Capital Markets, LLC

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<br>Barrier Absolute Enhanced Return Notes<br>Royal Bank of Canada <br>

#### HYPOTHETICAL RETURNS
The table set out below is included for illustration purposes only. The table illustrates the hypothetical Redemption Amount of the Notes for a hypothetical range of performance for the Reference Asset, assuming the following terms:

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| | |
|:---|:---|
| Hypothetical Initial Level: | 1,000.00\* |
| Hypothetical Barrier Level: | 600.00, which is 60.00% of the hypothetical Initial Level |
| Leverage Factor: | 165.50% |
| Principal Amount: | $1,000 per Note |

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\* The hypothetical Initial Level of 1,000.00 used in the examples below has been chosen for illustrative purposes only and does not represent the actual expected Initial Level. The actual Initial Level will be set forth on the cover page of the final pricing supplement relating to the Notes.

Hypothetical Final Levels are shown in the first column on the left. Hypothetical Percentage Changes are shown in the second column. The third column shows the Redemption Amount for a range of Final Levels of the Reference Asset. The fourth column shows the Redemption Amount to be paid on the Notes per $1,000 in principal amount.

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| | | | |
|:---|:---|:---|:---|
| **Hypothetical Final Level of the**<br> **Reference Asset** | **Hypothetical Percentage**<br> **Change** | **Redemption Amount as**<br> **Percentage of Principal Amount** | **Redemption Amount**<br> **per $1,000 in Principal**<br> **Amount** |
| $1500.00 | 50.00% | 182.750% | $1827.50 |
| 1400.00 | 40.00% | 166.200% | $1662.00 |
| 1300.00 | 30.00% | 149.650% | $1496.50 |
| 1200.00 | 20.00% | 133.100% | $1331.00 |
| 1100.00 | 10.00% | 116.550% | $1165.50 |
| 1050.00 | 5.00% | 108.275% | $1082.75 |
| 1000.00 | 0.000% | 100.000% | $1000.00 |
| 900.00 | -10.000% | 110.000% | $1100.00 |
| 800.00 | -20.000% | 120.000% | $1200.00 |
| 700.00 | -30.000% | 130.000% | $1300.00 |
| 600.00 | -40.000% | 140.000% | $1400.00 |
| 599.99 | -40.001% | 59.999% | $599.99 |
| 500.00 | -50.000% | 50.000% | $500.00 |
| 400.00 | -60.000% | 40.000% | $400.00 |
| 300.00 | -70.000% | 30.000% | $300.00 |
| 200.00 | -80.000% | 20.000% | $200.00 |
| 100.00 | -90.000% | 10.000% | $100.00 |
| 0.00 | -100.000% | 0.000% | $0.00 |

---

P-5 RBC Capital Markets, LLC

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<br>Barrier Absolute Enhanced Return Notes<br>Royal Bank of Canada <br>

The following hypothetical examples illustrate how the payments at maturity set forth in the table above are calculated.

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| | | |
|:---|:---|:---|
| Example 1 — | Calculation of the Payment at Maturity where the Percentage Change is positive. | Calculation of the Payment at Maturity where the Percentage Change is positive. |
|  | Percentage Change: | 5% |
|  | Payment at Maturity: | $1,000 + [($1,000 x (5% x 165.50%)] = $1,000 + $82.75 = $1,082.75 |
|  | In this case, on a $1,000 investment, a 5% Percentage Change results in a Payment at Maturity of $1,082.75, a 8.275% return on the Notes. | In this case, on a $1,000 investment, a 5% Percentage Change results in a Payment at Maturity of $1,082.75, a 8.275% return on the Notes. |

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| | | |
|:---|:---|:---|
| Example 2 — | Calculation of the Payment at Maturity where the Percentage Change is negative, but the Final Level is greater than or equal to the Barrier Level. | Calculation of the Payment at Maturity where the Percentage Change is negative, but the Final Level is greater than or equal to the Barrier Level. |
|  | Percentage Change: | -10% |
|  | Payment at Maturity: | $1,000 + [-1 x ($1,000 x -10%)] = $1,000 + $100 = $1,100 |
|  | In this case, on a $1,000 investment, a -10% Percentage Change results in a Payment at Maturity of $1,100, a 10% return on the Notes.<br> In this case, even though the Percentage Change is negative, you will receive a positive return equal to the absolute value of the Percentage Change. | In this case, on a $1,000 investment, a -10% Percentage Change results in a Payment at Maturity of $1,100, a 10% return on the Notes.<br> In this case, even though the Percentage Change is negative, you will receive a positive return equal to the absolute value of the Percentage Change. |

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| | | |
|:---|:---|:---|
| Example 3 — | Calculation of the Payment at Maturity where the Percentage Change is negative, and the Final Level is less than the Barrier Level. | Calculation of the Payment at Maturity where the Percentage Change is negative, and the Final Level is less than the Barrier Level. |
|  | Percentage Change: | -50% |
|  | Payment at Maturity: | $1,000 + ($1,000 x -50%) = $1,000 - $500 = $500 |
|  | In this case, on a $1,000 investment, a -50% Percentage Change results in a Payment at Maturity of $500, a -50% return on the Notes. | In this case, on a $1,000 investment, a -50% Percentage Change results in a Payment at Maturity of $500, a -50% return on the Notes. |

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P-6 RBC Capital Markets, LLC

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<br>Barrier Absolute Enhanced Return Notes<br>Royal Bank of Canada <br>

### 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" in the product prospectus supplement. In addition to the risks described in the prospectus supplement and the product prospectus supplement, you should consider the following:

#### Risks Relating to the Terms of the Notes
• **You May Not Receive the Full Principal Amount at Maturity** – Investors in the Notes will lose some or all of their principal amount if the Final Level is less than the Barrier Level. In such a case, the absolute return feature of the Notes will not apply, and you will lose 1% of the principal amount of the Notes for each 1% that the Final Level is less than the Initial Level.

• **The Notes Do Not Pay Interest and Your Return May Be Lower than the Return on a Conventional Debt Security of Comparable Maturity** – You will not receive any 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, the return may be less than the return you would earn if you purchased one of our conventional senior interest bearing debt securities.

• **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 our senior unsecured debt securities. As a result, your receipt of the Redemption Amount is dependent upon our ability to repay our obligations at that time. This will be the case even if the level of the Reference Asset increases or decreases after the Trade Date. No assurance can be given as to what our financial condition will be at the maturity of the Notes.

#### Risks Relating to the Secondary Market for 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 our other affiliates may make a market for the Notes; however, they are not required to do so. RBCCM or any of our other affiliates 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 the Notes in any secondary market could be substantial.

#### Risks Relating to the Estimated Value of the Notes
• **The Initial Estimated Value of the Notes Will Be Less than the Price to the Public** — The initial estimated value of the Notes that will be set forth on the cover page of the final pricing supplement for the Notes does not represent a minimum price at which we, RBCCM or any of our affiliates would be willing to purchase the Notes in any secondary market (if any exists) at any time. If you attempt to sell the Notes prior to maturity, their market value may be lower than the price you paid for them and the initial estimated value. This is due to, among other things, changes in the level of the Reference Asset, the borrowing rate we pay to issue securities of this kind, and the inclusion in the price to the public of the structuring fee and the estimated costs relating to our hedging of the Notes. These factors, together with various credit, market and economic factors over the term of the Notes, are expected to reduce the price at which you may be able to sell the Notes in any secondary market and will affect the value of the Notes in complex and unpredictable ways. Assuming no change in market conditions or any other relevant factors, the price, if any, at which you may be able to sell the Notes prior to maturity may be less than your original purchase price, as any such sale price would not be expected to include the structuring fee or the hedging costs relating to the Notes. In addition to bid-ask spreads, the value of the Notes determined by RBCCM for any secondary market price is expected to be based on the secondary rate rather than the internal funding rate used to price the Notes and determine the initial estimated value. As a result, the secondary price will be less than if the internal funding rate was used. The Notes are not designed to be short-term trading instruments. Accordingly, you should be able and willing to hold the Notes to maturity.

P-7 RBC Capital Markets, LLC

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<br>Barrier Absolute Enhanced Return Notes<br>Royal Bank of Canada <br>

• **The Initial Estimated Value of the Notes that We Will Provide in the Final Pricing Supplement Will Be an Estimate Only, Calculated as of the Time the Terms of the Notes Are Set** — The initial estimated value of the Notes will be based on the value of our obligation to make the payments on the Notes, together with the mid-market value of the derivative embedded in the terms of the Notes. See "Structuring the Notes" below. Our estimate will be based on a variety of assumptions, including our credit spreads, expectations as to dividends, interest rates and volatility, and the expected term of the Notes. These assumptions are based on certain forecasts about future events, which may prove to be incorrect. Other entities may value the Notes or similar securities at a price that is significantly different than we do.

The value of the Notes at any time after the Trade Date will vary based on many factors, including changes in market conditions, and cannot be predicted with accuracy. As a result, the actual value you would receive if you sold the Notes in any secondary market, if any, should be expected to differ materially from the initial estimated value of the Notes.

#### Risks Relating to Conflicts of Interest and Our Trading Activities
• **Our Business Activities May Create Conflicts of Interest —** We and our affiliates expect to engage in trading activities related to the Reference Asset that are not for the account of holders of the Notes or on their behalf. These trading activities may present a conflict between the holders' interests in the Notes and the interests we and our affiliates will have in their proprietary accounts, in facilitating transactions, including options and other derivatives transactions, for their customers and in accounts under their management. These trading activities, if they influence the level of the Reference Asset, could be adverse to the interests of the holders of the Notes. We and one or more of our affiliates may, at present or in the future, engage in business with companies included in the Reference Asset, including making loans to or providing advisory services. These services could include investment banking and merger and acquisition advisory services. These activities may present a conflict between our or one or more of our affiliates' obligations and your interests as a holder of the Notes. Moreover, we, and our affiliates may have published, and in the future expect to publish, research reports with respect to the Reference Asset. This research is modified from time to time without notice and may express opinions or provide recommendations that are inconsistent with purchasing or holding the Notes. Any of these activities by us or one or more of our affiliates may affect the level of the Reference Asset, and, therefore, the market value of the Notes.

#### Risks Relating to the Reference Asset
• **An Investment in the Notes Is Subject to Risks Relating to Non-U.S. Securities Markets** — Because foreign companies or foreign equity securities included in the Reference Asset are publicly traded in the applicable foreign countries and are denominated in euro, an investment in the Notes involves particular risks. For example, the non-U.S. securities markets may be more volatile than the U.S. securities markets, and market developments may affect these markets differently from the U.S. or other securities markets. Direct or indirect government intervention to stabilize the securities markets outside the U.S., as well as cross-shareholdings in certain companies, may affect trading prices and trading volumes in those markets. Also, the public availability of information concerning the foreign issuers may vary depending on their home jurisdiction and the reporting requirements imposed by their respective regulators. In addition, the foreign issuers may be subject to accounting, auditing and financial reporting standards and requirements that differ from those applicable to U.S. reporting companies.

• **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 Final Level will not reflect any dividends paid on the securities included in the Reference Asset, and accordingly, any positive return on the Notes may be less than the potential positive return on those securities.

• **The Payments on the Notes Are Subject to Postponement Due to Market Disruption Events and Adjustments** – The Redemption Amount 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.

P-8 RBC Capital Markets, LLC

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<br>Barrier Absolute Enhanced Return Notes<br>Royal Bank of Canada <br>

### INFORMATION REGARDING THE REFERENCE ASSET

All disclosures contained in this document regarding the Reference Asset, including, without limitation, its make-up, method of calculation, and changes in its components, have been derived from publicly available sources. The information reflects the policies of, and is subject to change by, STOXX Limited, as the sponsor of the Reference Asset ("STOXX"). STOXX, which owns the copyright and all other rights to the Index, has no obligation to continue to publish, and may discontinue publication of, the Reference Asset. The consequences of STOXX discontinuing publication of the Reference Asset are discussed in the section of the product prospectus supplement entitled "General Terms of the Notes— Unavailability of the Level of the Reference Asset." Neither we nor RBCCM accepts any responsibility for the calculation, maintenance or publication of the Reference Asset or any successor index.

#### EURO STOXX 50<sup>®</sup>Index<sup></sup>("SX5E")

#### Composition and Maintenance
The SX5E is composed of 50 component stocks of market sector leaders from within the 20 EURO STOXX<sup>®</sup> Supersector indices, which represent the Eurozone portion of the STOXX Europe 600<sup>®</sup> Supersector indices.

The composition of the SX5E is reviewed annually, based on the closing stock data on the last trading day in August. The component stocks are announced on the first trading day in September. Changes to the component stocks are implemented on the third Friday in September and are effective the following trading day. Changes in the composition of the SX5E are made to ensure that the SX5E includes the 50 market sector leaders from within the Eurozone.

The free float factors for each component stock used to calculate this Reference Asset, as described below, are reviewed, calculated, and implemented on a quarterly basis and are fixed until the next quarterly review.

The SX5E is also reviewed on an ongoing monthly basis. Corporate actions (including initial public offerings, mergers and takeovers, spin-offs, delistings, and bankruptcy) that affect the SX5E composition are announced immediately, implemented two trading days later and become effective on the next trading day after implementation.

#### Calculation of the SX5E
The SX5E is calculated with the "Laspeyres formula," which measures the aggregate price changes in the component stocks against a fixed base quantity weight. The formula for calculating the SX5E value can be expressed as follows:

SX5E *=* <u> *Free float market capitalization of the SX5E* </u> <br> *Divisor*

The "free float market capitalization of the SX5E" is equal to the sum of the products of the price, the number of shares, the free float factor and the weighting cap factor for each component stock as of the time the SX5E is being calculated.

The SX5E is also subject to a divisor, which is adjusted to maintain the continuity of the SX5E values across changes due to corporate actions, such as the deletion and addition of stocks, the substitution of stocks, stock dividends, and stock splits.

P-9 RBC Capital Markets, LLC

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<br>Barrier Absolute Enhanced Return Notes<br>Royal Bank of Canada <br>

#### License Agreement
We have entered into a non-exclusive license agreement with STOXX providing for the license to us and certain of our affiliated or subsidiary companies, in exchange for a fee, of the right to use indices owned and published by STOXX (including the SX5E) in connection with certain securities, including the Notes offered hereby.

The license agreement between us and STOXX requires that the following language be stated in this document:

STOXX has no relationship to us, other than the licensing of the SX5E and the related trademarks for use in connection with the Notes. STOXX does not:

<br> • sponsor, endorse, sell, or promote the Notes;

<br> • recommend that any person invest in the Notes offered hereby or any other securities;

• have any responsibility or liability for or make any decisions about the timing, amount, or pricing of the Notes;

<br> • have any responsibility or liability for the administration, management, or marketing of the Notes; or

<br> • consider the needs of the Notes or the holders of the Notes in determining, composing, or calculating the SX5E, or have any obligation to do so.

STOXX will not have any liability in connection with the Notes. Specifically:

<br> • STOXX does not make any warranty, express or implied, and disclaims any and all warranty concerning:

<br> • the results to be obtained by the Notes, the holders of the Notes or any other person in connection with the use of the SX5E and the data included in the SX5E;

<br> • the accuracy or completeness of the SX5E and its data;

<br> • the merchantability and the fitness for a particular purpose or use of the SX5E and its data;

<br> • STOXX will have no liability for any errors, omissions, or interruptions in the SX5E or its data; and

<br> • Under no circumstances will STOXX be liable for any lost profits or indirect, punitive, special, or consequential damages or losses, even if STOXX knows that they might occur.

The licensing agreement between us and STOXX is solely for their benefit and our benefit, and not for the benefit of the holders of the Notes or any other third parties.

P-10 RBC Capital Markets, LLC

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<br>Barrier Absolute Enhanced Return Notes<br>Royal Bank of Canada <br>

#### Historical Information
The graph below sets forth the information relating to the historical performance of the Reference Asset from January 1, 2013 to March 29, 2023. We obtained the information in the graph 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.

#### EURO STOXX 50<sup>®</sup> Index ("SX5E")

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| |
|:---|
| ![](image00004.jpg) |
| ***PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.*** |

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P-11 RBC Capital Markets, LLC

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<br>Barrier Absolute Enhanced Return Notes<br>Royal Bank of Canada <br>

#### SUPPLEMENTAL DISCUSSION OF U.S. FEDERAL INCOME TAX CONSEQUENCES
The following disclosure supplements, and to the extent inconsistent supersedes, the discussion in the product prospectus supplement dated September 14, 2021 under "Supplemental Discussion of U.S. Federal Income Tax Consequences."

Under Section 871(m) of the Code, a "dividend equivalent" payment is treated as a dividend from sources within the United States. Such payments generally would be subject to a 30% U.S. withholding tax if paid to a non-U.S. holder. Under U.S. Treasury Department regulations, payments (including deemed payments) with respect to equity-linked instruments ("ELIs") that are "specified ELIs" may be treated as dividend equivalents if such specified ELIs reference, directly or indirectly, an interest in an "underlying security," which is generally any interest in an entity taxable as a corporation for U.S. federal income tax purposes if a payment with respect to such interest could give rise to a U.S. source dividend. However, the Internal Revenue Service (the "IRS") has issued guidance that states that the U.S. Treasury Department and the IRS intend to amend the effective dates of the U.S. Treasury Department regulations to provide that withholding on dividend equivalent payments will not apply to specified ELIs that are not delta-one instruments and that are issued before January 1, 2025. Based on our determination that the Notes are not delta-one instruments, non-U.S. holders should not be subject to withholding on dividend equivalent payments, if any, under the Notes. However, it is possible that the Notes could be treated as deemed reissued for U.S. federal income tax purposes upon the occurrence of certain events affecting the Reference Asset or the Notes (for example, upon the Reference Asset rebalancing), and following such occurrence the Notes could be treated as subject to withholding on dividend equivalent payments. Non-U.S. holders that enter, or have entered, into other transactions in respect of the Reference Asset or the Notes should consult their tax advisors as to the application of the dividend equivalent withholding tax in the context of the Notes and their other transactions. If any payments are treated as dividend equivalents subject to withholding, we (or the applicable withholding agent) would be entitled to withhold taxes without being required to pay any additional amounts with respect to amounts so withheld.

P-12 RBC Capital Markets, LLC

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<br>Barrier Absolute Enhanced Return Notes<br>Royal Bank of Canada <br>

#### SUPPLEMENTAL PLAN OF DISTRIBUTION (CONFLICTS OF INTEREST)
We expect that delivery of the Notes will be made against payment for the Notes on or about April 26, 2023, which is the third (3rd) business day following the Trade Date (this settlement cycle being referred to as "T+3"). See "Plan of Distribution" in the prospectus dated September 14, 2021. 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 September 14, 2021.

We expect to deliver the Notes on a date that is greater than two business days following the Trade Date. Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Notes more than two business days prior to the original issue date will be required to specify alternative settlement arrangements to prevent a failed settlement.

We or one of our affiliates may also pay a structuring fee to a selected dealer of $7.00 per $1,000 in principal amount of the Notes. In addition, we or one of our affiliates will also pay an expected fee to a broker-dealer that is unaffiliated with us for certain electronic platform services with respect to this offering.

The value of the Notes shown on your account statement may be based on RBCCM's estimate of the value of the Notes if RBCCM or another of our affiliates were to make a market in the Notes (which it is not obligated to do). That estimate will be based upon the price that RBCCM may pay for the Notes in light of then prevailing market conditions, our creditworthiness and transaction costs. For a period of approximately twelve months after the issue date of the Notes, the value of the Notes that may be shown on your account statement may be higher than RBCCM's estimated value of the Notes at that time. This is because the estimated value of the Notes will not include the structuring fee or our hedging costs and profits; however, the value of the Notes shown on your account statement during that period may be a higher amount, reflecting the addition of the structuring fee and our estimated costs and profits from hedging the Notes. This excess is expected to decrease over time until the end of this period. After this period, if RBCCM repurchases your Notes, it expects to do so at prices that reflect their estimated value.

We may use this terms supplement in the initial sale of the Notes. In addition, RBCCM or another of our affiliates may use this terms 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 terms supplement is being used in a market-making transaction.***

P-13 RBC Capital Markets, LLC

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<br>Barrier Absolute Enhanced Return Notes<br>Royal Bank of Canada <br>

#### STRUCTURING THE NOTES
The Notes are our debt securities, the return on which is linked to the performance of the Reference Asset. As is the case for all of our debt securities, including our structured notes, the economic terms of the Notes reflect our actual or perceived creditworthiness at the time of pricing. In addition, because structured notes result in increased operational, funding and liability management costs to us, we typically borrow the funds under these Notes at a rate that is more favorable to us than the rate that we might pay for a conventional fixed or floating rate debt security of comparable maturity. Using this relatively lower implied borrowing rate rather than the secondary market rate, is a factor that is likely to reduce the initial estimated value of the Notes at the time their terms are set. Unlike the estimated value that will be included in the final pricing supplement, any value of the Notes determined for purposes of a secondary market transaction may be based on a different funding rate, which may result in a lower value for the Notes than if our initial internal funding rate were used.

In order to satisfy our payment obligations under the Notes, we may choose to enter into certain hedging arrangements (which may include call options, put options or other derivatives) on the issue date with RBCCM or one of our other subsidiaries. The terms of these hedging arrangements take into account a number of factors, including our creditworthiness, interest rate movements, the volatility of the Reference Asset, and the tenor of the Notes. The economic terms of the Notes and their initial estimated value depend in part on the terms of these hedging arrangements.

The lower implied borrowing rate is a factor that reduces the economic terms of the Notes to you. The initial offering price of the Notes also reflects the structuring fee and our estimated hedging costs. These factors result in the initial estimated value for the Notes on the Trade Date being less than their public offering price. See "Selected Risk Considerations—The Initial Estimated Value of the Notes Will Be Less than the Price to the Public" above.

P-14 RBC Capital Markets, LLC

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