BMO.PR.D Firm On Good Volume

Bank of Montreal has announced:

it has closed its domestic public offering of Non-Cumulative 5-Year Rate Reset Class B Preferred Shares Series 42 (Non-Viability Contingent Capital (NVCC)) (the “Preferred Shares Series 42”). The offering was underwritten on a bought-deal basis by a syndicate of underwriters led by BMO Capital Markets. Bank of Montreal issued 16 million Preferred Shares Series 42 at a price of $25 per share to raise gross proceeds of $400 million.

The Preferred Shares Series 42 were issued under a prospectus supplement dated June 22, 2017, to the Bank’s short form base shelf prospectus dated April 13, 2016. Such shares will commence trading on the Toronto Stock Exchange today under the ticker symbol BMO.PR.D.

BMO.PR.D is a FixedReset, 4.40%+317, NVCC, announced 2017-6-20. It will be tracked by HIMIPref™ and has been assigned to the FixedResets subindex.

The issue traded 1,276,967 shares today in a range of 24.80-97 before closing at 24.94-95. Vital statistics are:

Maturity Type : Limit Maturity
Maturity Date : 2047-06-29
Maturity Price : 23.13
Evaluated at bid price : 24.94
Bid-YTW : 4.41 %

Implied Volatility for FixedResets analysis shows very little change in relative valuation since the issue was announced:

Click for Big

Only nine days ago, the GOC-5 rate was 1.13%, with the analysis showing a spread of 255bp and Implied Volatility of 18%. The theoretical price is now 24.81, compared to the issue-day calculation of 24.84.

3 Responses to “BMO.PR.D Firm On Good Volume”

  1. DrSpinz says:

    I would like to know readers views on the likelihood of a redemption of this D issue, scheduled to reset in August 2022. BMO seem to be in a redemption mood based the C and D issues redemptions that occurred earlier this year. Wondering what would be their best path to finance this redemption, if they have limitations etc. Thank you in advance

  2. DrSpinz says:

    Correction ”based the B and C issues redemptions that occurred earlier this year”

  3. […] is a FixedReset, 4.40%+317, NVCC, that commenced trading 2017-6-29 after being announced 2017-6-20. It has been tracked by HIMIPref™ and is currently assigned to […]

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