Bank of Montreal Announces AT1 Limited Recourse Capital Notes Issue

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

TORONTO, Sept. 9, 2020 /CNW/ - Bank of Montreal (TSX:BMO, NYSE:BMO or the "Bank") today announced the offering of C$1.25 billion of non-viability contingent capital ("NVCC") Additional Tier 1 (AT1) Limited Recourse Capital Notes, Series 1 (the "LRCNs").

The LRCNs will bear interest at a rate of 4.300 per cent annually, payable semi-annually, for the initial period ending November 26, 2025. Thereafter, the interest rate on the LRCNs will reset every five years at a rate equal to the prevailing 5-year Government of Canada Yield plus 3.938 per cent. The LRCNs will mature on November 26, 2080. The expected closing date of the offering is September 16, 2020.

Concurrently with the issuance of the LRCNs, the Bank will issue NVCC Non-Cumulative 5-Year Fixed Rate Reset First Preferred Shares, Series 48 ("Preferred Shares Series 48") to be held by Computershare Trust Company of Canada as trustee for a newly formed trust (the "Limited Recourse Trust"). In case of non-payment of interest on or principal of the LRCNs when due, the recourse of each LRCN holder will be limited to that holder's proportionate share of the Limited Recourse Trust's assets, which will consist of Preferred Shares Series 48 except in limited circumstances.

The Notes may be redeemed at the option of the Bank, with the prior written approval of the Superintendent of Financial Institutions (Canada), in whole or in part, on not less than 15 nor more than 60 days' prior notice, every five years during the period from October 26 to and including November 26, commencing in 2025.

Net proceeds from this transaction will be used for general banking purposes.

The LRCNs have not been, and will not be, registered in the United States under the United States Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state of the United States and may not be offered, sold or delivered, directly or indirectly in the United States or to, or for the account or benefit of, a "U.S. person" (as defined in Regulation S under the Securities Act) absent registration under the Securities Act or an applicable exemption from such registration requirements. This press release does not constitute an offer to sell or a solicitation to buy securities in the United States or in any other jurisdiction where such offer or solicitation would be unlawful.

About BMO Financial Group
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider - the 8th largest bank, by assets, in North America. With total assets of $974 billion as of July 31, 2020, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12+ million customers globally and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.

SOURCE BMO Financial Group

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