[Form 3] MasterCraft Boat Holdings, Inc. Initial Statement of Beneficial Ownership

Rhea-AI Filing Summary

Royal Bank of Canada (RY) has filed a 424B2 pricing supplement for a $553,000 issuance of Auto-Callable Contingent Coupon Barrier Notes linked to the Bloomberg US Large Cap VolMax Index (BMAXUS), maturing March 25, 2030. The notes offer a monthly contingent coupon of 1.05% (12.60% p.a.) when the Underlier’s closing value on the observation date is at least 50% of the initial level (Coupon Threshold/Barrier = 5,722.60, based on an initial level of 11,445.19).
• Auto-call feature: beginning June 22 2026 (month 12), the notes will be redeemed at par plus the coupon if the Underlier closes at or above the initial level on any observation date.
• Principal at maturity: if not called and the Underlier is ≥ Barrier (50% of initial), investors receive par plus any due coupon; if the Underlier is < Barrier, repayment equals par plus the Underlier return, resulting in 1-for-1 downside exposure below the barrier.
• Issue economics: price to public 100%, underwriting discount 1.25%; proceeds to RBC 98.75%. The initial estimated value is $922.49 per $1,000 (≈92.25% of par), highlighting a dealer margin of ~7.75%.
• Liquidity & credit: the notes are senior unsecured obligations, not listed on any exchange, and subject to RBC’s credit risk. RBCCM is calculation agent and underwriter.
• Underlying mechanics: BMAXUS is a recently launched (Dec 9 2024) 40% target-volatility index that can lever up to 5× exposure to the Bloomberg US Large Cap Total Return Index, less daily deductions: SOFR+0.5% financing cost, 6% annual fee, and 0.01% daily transaction cost. These drag factors will reduce index performance relative to the underlying equity basket.
• Key dates: Trade Date 6/20/2025; Issue Date 6/25/2025; Valuation Date 3/20/2030; monthly coupon/observation schedule provided through maturity.
• Risk highlights: investors may receive no coupons, face substantial loss below the 50% barrier, lack secondary market liquidity, and confront uncertain U.S. tax treatment. The note’s payoff caps upside at coupon income and provides no participation in index appreciation.

Positive

• Attractive headline income: contingent coupon of 12.60% per annum when the Underlier stays ≥50% of initial level.
• 50% soft barrier: investors retain full principal if the index does not fall more than 50% at maturity.
• Auto-call at par plus coupon: early redemption provides timely return of capital if the index is at or above the initial level after year 1.
• Not bail-inable: notes are exempt from Canadian bail-in conversion, reducing statutory conversion risk.

Negative

• Principal loss below barrier: 1-for-1 downside if the Underlier ends <50% of initial, exposing investors to substantial losses.
• No participation in upside: returns are capped at coupon income; investors forgo index appreciation.
• Initial estimated value 7.75% below issue price: implies immediate mark-to-market discount and high fees.
• Illiquidity risk: no exchange listing; secondary market, if any, depends solely on RBCCM.
• Complex, leveraged Underlier: daily financing cost, 6% annual drag, and up to 5× leverage increase volatility and barrier breach risk.
• Uncertain U.S. tax treatment: potential 30% withholding for non-U.S. holders and lack of IRS guidance.

Insights

Structured-Products Analyst

TL;DR – High coupon but high embedded costs, limited upside, 50% soft barrier; risk-reward profile is income-focused, not growth.

The 12.60% headline coupon is attractive versus conventional fixed-income yields, yet payment is conditional on the Underlier staying above half its initial level. The 50% soft barrier offers some downside buffer, but below that investors absorb losses point-for-point. Upside is capped—no equity participation—and auto-call after year 1 truncates income potential if the index rebounds. The initial estimated value of 92.249% reveals c. 775 bps in dealer and structuring charges, meaning investors give up immediate mark-to-market value. Illiquidity, credit exposure to RBC, and the complex, leveraged, fee-laden VolMax index further elevate risk. Overall impact for RBC equity holders is negligible; for note buyers, the product suits yield-seeking investors who can tolerate equity-like downside and limited liquidity.

Risk Analyst

TL;DR – Principal loss potential, leverage in index, and uncertain taxation heighten downside and complexity.

The VolMax index’s 40% volatility target with up to 5× leverage amplifies moves and drags from daily costs, raising the probability of breaching the 50% barrier in stressed markets. Credit risk is senior unsecured; any deterioration in RBC spreads will mark down secondary values. The note is not bail-inable, limiting conversion risk but still unprotected by deposit insurance. Tax treatment as prepaid forward is not settled, and non-U.S. holders may face 30% withholding on coupons. Lack of listing and potential wide bid-ask spreads mean exit prices could be far below theoretical value, especially because the note’s fair value excludes the 1.25% underwriting fee and hedging costs. From a portfolio standpoint, the structure adds concentrated tail risk relative to conventional bonds.

SEC Form 3

FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

OMB APPROVAL

OMB Number:			3235-0104
Estimated average burden
hours per response:			0.5

1. Name and Address of Reporting Person^*

Kent Walter Scott

(Last) (First) (Middle)

100 CHEROKEE COVE DRIVE

(Street)

VONORE TN 37855

(City) (State) (Zip)

2. Date of Event Requiring Statement (Month/Day/Year)
07/01/2025

3. Issuer Name and Ticker or Trading Symbol
MasterCraft Boat Holdings, Inc. [ MCFT ]

4. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

	Director		10% Owner
X	Officer (give title below)		Other (specify below)
	Chief Financial Officer

5. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)
Common Stock	20,185	D

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
	Date Exercisable	Expiration Date	Title	Amount or Number of Shares

Explanation of Responses:

	/s/ W. Scott Kent	07/03/2025
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.

FAQ

What coupon rate do Royal Bank of Canada’s (RY) VolMax Auto-Callable Notes pay?

They offer a contingent coupon of 1.05% per month, or 12.60% per annum, payable only if the index is ≥ 50% of its initial level on the observation date.

When can the RY Auto-Callable Notes be redeemed early?

Starting with the June 22 2026 observation date, the notes are automatically called at par plus the due coupon if the index closes at or above its initial level.

What happens at maturity if the Bloomberg US Large Cap VolMax Index falls more than 50%?

Investors receive $1,000 plus the index return, resulting in a dollar-for-dollar loss below the 50% barrier; all principal can be lost.

How does the initial estimated value compare to the purchase price?

RBC’s initial estimated value is $922.49 per $1,000, about 7.75% below the public offering price, reflecting fees and hedging costs.

Are these RY notes protected by deposit insurance or bail-in rules?

No. They are unsecured senior debt, not insured by CDIC or FDIC, but they are expressly not subject to Canadian bail-in conversion.

Is there a secondary market for the notes?

The notes will not be listed; RBCCM may act as market-maker but is not obligated, so liquidity may be limited and prices discounted.