Royal Bank of Canada is planning a domestic public offering of $300 million of Non-Cumulative, 5 year rate reset Preferred Shares Series AX, the bank said Tuesday.

The bank will issue 12 million Series AX preferred shares priced at $25 per share. Holders will be entitled to receive non-cumulative quarterly fixed dividend for the initial period ending Nov. 24, 2014 in the amount of $1.525 per share, to yield 6.1%
annually.

Net proceeds from the transaction will be used for general business purposes, the bank said.

The offering will be underwritten by a syndicate led by RBC Capital Markets. The expected closing date is April 29.

The bank has granted the underwriters an option to purchase up to an additional 1 million preferred shares at the same offering price.

Subject to regulatory approval, on or after Nov. 24, 2014, the bank may redeem the Series AX shares in whole or in part at par. Thereafter, the dividend rate will reset every five years at a rate equal to 4.13% over the 5-year Government of Canada bond yield. Holders of Series AX shares will have the right to convert all or any part of their shares to non-cumulative floating rate preferred shares Series AY on Nov. 24, 2014 and on November 24 every five years thereafter.

Holders of the Series AY share will be entitled to receive a non-cumulative quarterly floating dividend at a rate equal to the 3-month Government of Canada Treasury Bill yield plus 4.13%. Holders of Series AY shares wil have the right to convert all or any part of their shares to Series AX shares on Nov. 24, 2019 and on Nov. 24 every five years thereafter.

IE