Royal Bank of Canada plans a domestic public offering of $325 million of Non-Cumulative, 5 year rate reset Preferred Shares Series AV, the bank said Tuesday.

The bank will issue 13 million Preferred Shares Series AV priced at $25 per share and holders will be entitled to receive non-cumulative quarterly fixed dividend for the initial period ending August 24, 2014 in the amount of $1.5625 per share, to yield 6.25% annually.

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

The bank has granted the underwriters an option, to purchase up to an additional 3 million preferred shares at the same offering price.

Subject to regulatory approval, on or after August 24, 2014, the bank may redeem the Preferred Shares Series AV in whole or in part at par. Thereafter, the dividend rate will reset every five years at a rate equal to 4.42% over the 5-year Government of Canada bond yield. Holders of Preferred Shares Series AV will have the right to convert all or any part of their shares to non-cumulative floating rate preferred shares Series AW (the Preferred Shares Series AW) on August 24, 2014 and on August 24 every five years thereafter.

Holders of the Preferred Shares Series AW 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 4.42%. Holders of Preferred Shares Series AW will have the right to convert all or any part of their shares to Preferred Shares Series AV on August 24, 2019 and on August 24 every five years thereafter.

The offering will be underwritten by a syndicate led by RBC Capital Markets. The expected closing date is April 1.