Bank of Montreal Announces AT1 Limited Recourse Capital Notes Issue

TORONTO, Feb. 29, 2024 /CNW/ - Bank of Montreal (TSX: BMO) (NYSE: BMO) (or the "Bank") today announced the pricing of USD $1.0 billion of non-viability contingent capital ("NVCC") Additional Tier 1 (AT1) Limited Recourse Capital Notes, Series 4 (the "LRCNs").

The LRCNs will bear interest at a rate of 7.700 per cent annually, payable quarterly, for the initial period ending, but excluding, May 26, 2029. Thereafter, the interest rate on the LRCNs will reset every five years at a rate equal to the prevailing 5-year U.S. Treasury Rate plus 3.452 per cent. The LRCNs will mature on May 26, 2084. The expected closing date of the offering is March 8, 2024.

Concurrently with the issuance of the LRCNs, the Bank will issue NVCC Non-Cumulative 5-Year Fixed Rate Reset Class B Preferred Shares, Series 53 ("Preferred Shares Series 53") to be held by Computershare Trust Company of Canada, as trustee for BMO LRCN 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 53 except in limited circumstances.

The LRCNs 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 10 nor more than 60 days' prior notice, every quarter on the interest payment date, commencing on May 26, 2029.

Net proceeds from this transaction will be contributed to the general funds of the Bank and will qualify as Additional Tier 1 capital of the Bank for regulatory purposes.

BMO Capital Markets Corp., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Barclays Capital Inc., BNP Paribas Securities Corp. and Credit Agricole Securities (USA) Inc. are the joint book-running managers for the offering.

A registration statement relating to the offering has been filed with the U.S. Securities and Exchange Commission (the "SEC") and is effective. The offering is being made only by means of a prospectus supplement and the accompanying prospectus that forms a part of the registration statement. Copies of the preliminary prospectus supplement and the accompanying prospectus for the offering may be obtained free of charge by visiting EDGAR on the SEC's website at www.sec.gov. Alternatively, copies of the final prospectus supplement, when available, and the accompanying prospectus may also be obtained by contacting BMO Capital Markets Corp. toll-free at 1-866-864-7760; Goldman Sachs & Co. LLC toll-free at 1-866-471-2526; Morgan Stanley & Co. LLC toll-free at 1-866-718-1649; Barclays Capital Inc. toll-free at 1-888- 603-5847; BNP Paribas Securities Corp. toll-free at 1-800-854-5674; and Credit Agricole Securities (USA) Inc. toll-free at 1-866 807-6030.

This press release does not constitute an offer to sell, or a solicitation of an offer to buy, these securities in the United States or in any other jurisdiction where such offer, solicitation or sale would be unlawful. The offering may be made only by means of a prospectus supplement and the accompanying prospectus.

BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.3 trillion as of January 31, 2024. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society.

SOURCE BMO Financial Group