New Issue: BMO 4.50% Perpetuals

The first week of the new year has started with a bang!

BMO has announced a bought deal for 14-million shares @ $25: these will be designated “Non-Cumulative Perpetual Class B Preferred Shares, Series 13”.

The anticipated closing date is January 17, 2007.

The redemption schedule is:

Redemption Schedule, BMO Ser 13
From To Price
2012-2-25 2013-2-24 $26.00
2013-2-25 2014-2-24 $25.75
2014-2-25 2015-2-24 $25.50
2015-2-25 2016-2-24 $25.25
2016-2-25 INFINITE DATE $25.00

More later.

Later, more:

Comparator Characteristics
Issue BNS.PR.K CM.PR.I RY.PR.D BMO.PR.? BNS.PR.?
Dividend 1.20 1.175 1.125 1.125 1.125
Quote 25.85-96 25.16-36 25.11-20 25.00 Issue 25.00 Issue
Redemption Schedule Start 2010-4-28 2012-1-31 2012-02-24 2012-2-25 2012-4-26
Price due to base-rate 24.25 24.07 23.45 23.38 23.37
Price due to short-term 0.03 0.04 0.03 0.03 0.03
Price due to long-term 0.49 0.49 0.48 0.46 0.46
Price due to error -0.01 0.02 -0.03 0.00 0.00
Price due to Credit Spread (Low) N/A -0.54 N/A N/A N/A
Intrinsic Curve Price 24.77 24.08 23.94 23.87 23.86
Price due to Liquidity 0.52 1.50 1.51 1.51? 1.51?
Curve Price 25.29 25.58 25.45 25.38? 25.37?
Yield-to-Worst (after Tax) 3.37% 3.66% 3.58% 3.58% 3.57%
Yield-to-Worst (Pre-Tax) 4.24% 4.61% 4.51% 4.50% 4.49%

So … the new issue looks like a good, but not great, purchase at the issue price.

3 Responses to “New Issue: BMO 4.50% Perpetuals”

  1. […] The Royal Bank decided to join BMO and Scotia in issuing a new 4.5% Perpetual this week. […]

  2. […] TD posted the last trade, a cross of 68,300 at $25.40. Now with a pre-tax bid-YTW of 4.53% based on a bid of $25.30 and a call 2016-3-1 at $25.00. Since the YTW exceeds the issue yield of the Royal, Scotia and BMO new issues, as well as having a certain amount of interest rate protection due to its higher coupon, some may conclude that this old issue is more attractive than the new ones. The volume indicates that, perhaps, many have done just that. I’m not one of them, but then, I’m a capital-gains fan. An equal number of shares were sold, of course, but the price was up today, at the issue gained 0.3172% (bid/bid). […]

  3. […] The BMO New Issue settled today and there wasn’t much of a surprise. The trading range was 24.90-98 on volume of 371,320 shares; the closing quote was 25.96-98, 25×35. […]

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