RS-PR-A.TO

Structure Overview

This is a split-share corporation, which separates the capital appreciation and dividend income of an underlying equity portfolio between two share classes: preferred shares (priority distributions) and capital shares (residual income and NAV growth). The leverage embedded in the capital-share structure amplifies both gains and losses; distributions can be suspended if the coverage ratio falls below regulatory thresholds.

Canadian Planning Notes

• 1Split-share preferred shares receive priority distributions but are not the same as bank-issued preferred shares; review the coverage ratio, asset coverage test, and termination date before planning.
• 2Distribution suspensions on capital units can happen quickly when the underlying portfolio declines; do not plan income around split-share capital units without stress-testing coverage.
• 3Tax character of split-share distributions varies; confirm the T5 breakdown annually as it may include capital gains, eligible dividends, or return of capital depending on the issuer.

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