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Preferred Share Description
Bank of Montreal (BMO.PR.B)
4.85% Non-Cumulative, Redeemable, Rate-Reset, NVCC* Class B preferred shares, Series 38
Prospectus - October 14, 2016
DBRS Credit Rating: July 28, 2016 - DBRS has today confirmed the ratings of Bank of Montreal and related entities, including BMO’s Issuer Rating and Deposits & Senior Debt rating at AA and its Short-Term Instruments rating at R-1 (high). The trends on the senior long-term debt, short-term instruments and older-style subordinated debt remain Negative, while other capital instruments whose ratings are notched down from the Bank’s intrinsic assessment (IA) continue to have a Stable trend. Confirmation of the ratings follows a detailed review of the Bank’s operating results, financial fundamentals and future prospects.
Important Note: NVCC preferred shares have a lower credit rating than other Bank of Montreal preferred share issues. DBRS assigned the NVCC Preferred Shares Series 38 a rating equal to the Bank’s intrinsic assessment less four rating notches because the Series 38 has only an Office of the Superintendent of Financial Institutions (OSFI)-compliant non-viable contingent capital (NVCC) trigger, which is consistent with the OSFI requirements for NVCC instruments, and no additional triggers.
*NVCC is short for Non-Viability Contingent Capital and it refers to the issuer's ability to convert the preferred shares into common shares if a "Trigger Event" occurs. See "Convertible by Company" section below for the definition of a trigger event.
- DBRS Rating
- Pfd-2 Stable Trend
- DBRS Rating Date
- Shares Issued
- Issued Date
- Shares O/S
- O/S Date
- $1.2125 per share per year
- Dividend Dates
- On the 25th day of February, May, August and November
- Dividend Details
- Initially the dividend is set at a fixed annual rate of 4.85% until February 25, 2022. The dividend rate will be reset on February 25, 2022 and on February 25th every five years thereafter. The dividend rate will be set at an annual rate equal to the 5-year Government of Canada Bond Yield (GCAN5YR) plus 4.06%.
- The shares are not redeemable by the company prior to February 25, 2022. On February 25, 2022 and on February 25th every five years thereafter the Bank may redeem all or any part of the then outstanding Preferred Shares Series 38, at the Bank’s option without the consent of the holder, by the payment of an amount in cash for each such share so redeemed of $25.00 per share.
- Holders of the Series 38 have the right to convert their shares into an equal number of Series 39 Floating-Rate preferred shares on February 25, 2022 and on February 25th every five years thereafter. The Floating Rate shares will calculate and pay dividends quarterly. The floating-rate dividend will equal the 3-month Government of Canada Treasury Bill yield plus 4.06%. On February 25, 2027 and on February 25th every five years thereafter Series 39 shareholders have the right to convert back into Series 38 rate-reset preferred shares.
- Transfer Agent
- Computershare Trust Company of Canada
- Computershare Trust Company of Canada
- Dividend Reinvestment Plan
- Holders of this series of BMO preferred shares may be eligible for the DRIP, where preferred share dividends can be reinvested into common shares of BMO. Check with the financial institution that administers your account.
- Convertible by Company
- Upon the occurrence of a Trigger Event (as defined in the prospectus), each outstanding Preferred Share Series 38 and, if issued, each outstanding Preferred Share Series 39 will automatically and immediately be converted, without the consent of the holders thereof, into that number of Common Shares of the Bank determined by dividing $25.00 plus any declared but unpaid dividends in respect of such Preferred Share Series 38 or Preferred Share Series 39 by the Conversion Price.
- Last Updated