Bank of Montreal has announced (last week, actually, but I missed it):
that it will exercise its right to redeem all of its $350,000,000 Non-Cumulative Perpetual Class B Preferred Shares Series 13 (“Preferred Shares Series 13”) on May 25, 2015, at the redemption price of $25.25 per share, for total redemption proceeds of approximately $353.5 million.
Payment of the redemption price will be made by Bank of Montreal on or after May 25, 2015, upon surrender of the Preferred Shares Series 13.
Separately from the payment of the redemption price, the final quarterly dividend of $0.28125 per share for the Preferred Shares Series 13 will be paid in the usual manner on May 25, 2015, to shareholders of record on May 1, 2015.
Notice will be delivered to holders of the Preferred Shares Series 13 in accordance with the terms outlined in the Preferred Shares Series 13 prospectus supplement.
BMO.PR.J is a 4.50% DeemedRetractible announced 2007-1-8 which commenced trading 2007-1-17.
Holders are strongly urged to consider the tax implications of the redemption: it is being executed at a premium to par ($25.25) and will therefore be treated for tax purposes as a sale at 25.00 with a Deemed Dividend (taxed like any other dividend) of $0.25. If an investor sells on the market, however, it will be taxed as a sale at whatever price he gets (probably a penny or two below the redemption price), with none of the Deemed Dividend complication. The choice between the two options will be a function of transaction costs and the investors individual tax circumstances; please consult your personal tax advisor.
This entry was posted on Thursday, April 30th, 2015 at 4:12 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed.
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BMO.PR.J To Be Redeemed At A Premium
Bank of Montreal has announced (last week, actually, but I missed it):
BMO.PR.J is a 4.50% DeemedRetractible announced 2007-1-8 which commenced trading 2007-1-17.
Holders are strongly urged to consider the tax implications of the redemption: it is being executed at a premium to par ($25.25) and will therefore be treated for tax purposes as a sale at 25.00 with a Deemed Dividend (taxed like any other dividend) of $0.25. If an investor sells on the market, however, it will be taxed as a sale at whatever price he gets (probably a penny or two below the redemption price), with none of the Deemed Dividend complication. The choice between the two options will be a function of transaction costs and the investors individual tax circumstances; please consult your personal tax advisor.
This entry was posted on Thursday, April 30th, 2015 at 4:12 pm and is filed under Issue Comments. 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.