BMO.PR.N To Be Redeemed

The Bank of Montreal has announced:

its intention to redeem all of its $150,000,000 Non-cumulative 5-Year Rate Reset Class B Preferred Shares Series 18 (“Preferred Shares Series 18”) on February 25, 2014.

The Preferred Shares Series 18 are redeemable at Bank of Montreal’s option on February 25, 2014, at a redemption price of $25.00 per share together with declared and unpaid dividends to the date fixed for redemption. Payment of the redemption price will be made by Bank of Montreal on or after February 25, 2014, upon surrender of the Preferred Shares Series 18.

Separately from the payment of the redemption price, the final quarterly dividend of $0.40625 per share for the Preferred Shares Series 18 will be paid in the usual manner on February 25, 2014, to shareholders of record on February 1, 2014.

Notice will be delivered to holders of the Preferred Shares Series 18 in accordance with the terms outlined in the Preferred Shares Series 18 prospectus.

BMO.PR.N is a FixedReset, 6.50%+383, that settled 2008-12-11 after being announced November 25 – a time when the preferred share market was not having a nice time. With an Issue Reset Spread of 383bp, there hasn’t been any real doubt about the redemption – still, BMO left the official announcement until the last minute!

All of the February Exchange Dates have now been accounted for; the next batch comes at the end of April, with BNS.PR.T, BNS.PR.X, CM.PR.L, TD.PR.E and TD.PR.G on the block. The minimum Issue Reset Spread amongst these issues is 414bp, so there’s not much doubt about what’s going to happen.

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