New Issue: BMO Fixed-Reset 5.20% +165

And now there are six!

Actually, I detect a move in the right direction with this issue. The most recent fixed-reset was from National Bank, 5.375%+205 and the penultimate was TD, 5.00% +160; the Canada 5-year is now at 3.52%, up 6bp from yesterday. As the initial 5-year rate creeps up, I get more interested … but I’m not willing to buy just yet! Not with, for instance, BMO.PR.J closing at 19.83-95 last night, with a bid-Yield-to-Worst of 5.73% and the chance for a capital gain of 25% if yields fall.

Issue: Bank of Montreal Non-Cumulative 5-Year Rate Reset Class B Preferred Shares Series 16

Size: 10-million shares @25 (= $250-million); greenshoe of 2-million shares (=$50-million) exercisable prior to closing.

Exchange Dates: August 25, 2013 and every five years thereafter.

Dividends: 5.20% (=$1.30) p.a.; resets to 5-year Canadas +165bp every exchange date.

Exchange: Every Exchange Date to and from Series 17 Floaters, which pay 90-bills + 165, reset quarterly.

Redemption: Every Exchange Date at $25.00 for Resets; Floaters redeemable at $25 each Exchange Date and at $25.50 at all other times.

Ratings: S&P: P-1(low); DBRS: Pfd-1; Moody’s: Aa3

Closing: 2008-6-23

This entry was posted on Thursday, June 12th, 2008 at 2:29 pm and is filed under New Issues. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

5 Responses to “New Issue: BMO Fixed-Reset 5.20% +165”

  1. cowboylutrell says:
    June 12, 2008 at 3:58 pm

    Talking of BMO, what a huge cross late in the afternoon on BMO.PR.I: 634,200 shares at a negative YTW of ?.?% (Mr. Hymas will most probably get us the details concerning this jumbo cross as well as the actual YTW).

  2. mpisni says:
    June 16, 2008 at 10:16 am

    Hi James, Recently we have seen issues rated at lower ratings take some big hits ( FTS, SLF, ) but the recent issues in the 5.6% to 6 % range have remained relatively unaffected.

    Is this because of the dividend rate, higher ratings ?

    How will these issues prices be effected down the road and how much will rates have to increase to see negative effects on their prices

    Thanks James

  3. PrefBlog » Blog Archive » Negative Convexity? Negative Schmonvexity! says:
    June 16, 2008 at 2:12 pm

    […] the comments to another post, Assiduous Reader mpisni asks: Hi James, Recently we have seen issues rated at lower ratings take […]

  4. PrefBlog » Blog Archive » BMO.PR.M Settles without Incident says:
    June 23, 2008 at 4:37 pm

    […] Fixed Reset 5.20%+165bp issue announced on June 12 settled today with good volume and tone. 308,269 shares traded in a range of 24.90-97, closing with […]

  5. BMO.PR.M To Reset « PrefBlog says:
    July 22, 2013 at 7:08 pm

    […] is a FixedReset, 5.20%+165, announced June 12, 2008 which settled June 23, […]

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