PrefBlog

Bank of Montreal has announced (on September 27):

that it does not intend to exercise its right to redeem the currently outstanding Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 31 of the Bank (the “Preferred Shares Series 31”) on November 25, 2019. As a result, subject to certain conditions, the holders of Preferred Shares Series 31 have the right, at their option, to convert all or part of their Preferred Shares Series 31 on a one-for-one basis into Non-Cumulative Floating Rate Class B Preferred Shares, Series 32 of the Bank (the “Preferred Shares Series 32”) on November 25, 2019. Holders who do not exercise their right to convert their Preferred Shares Series 31 into Preferred Shares Series 32 on such date will retain their Preferred Shares Series 31, unless automatically converted in accordance with the conditions below.

The foregoing conversions are subject to the conditions that: (i) if, after November 12, 2019, the Bank determines that there would be less than 1,000,000 Preferred Shares Series 31 outstanding on November 25, 2019, then all remaining Preferred Shares Series 31 will automatically be converted into an equal number of Preferred Shares Series 32 on November 25, 2019; and (ii) alternatively, if the Bank determines that there would be less than 1,000,000 Preferred Shares Series 32 outstanding on November 25, 2019, no Preferred Shares Series 31 will be converted into Preferred Shares Series 32. In either case, the Bank will give written notice to that effect to any registered holders of Preferred Shares Series 31 affected by the preceding minimums on or before November 15, 2019.

The dividend rate applicable to the Preferred Shares Series 31 for the 5-year period commencing on November 25, 2019, and ending on November 24, 2024, and the dividend rate applicable to the Preferred Shares Series 32 for the 3-month period commencing on November 25, 2019, and ending on February 24, 2020, will be determined and announced by way of a news release on October 28, 2019. This date is the first business day following the dividend rate calculation date of October 26, 2019, established in the Preferred Shares Series 31 prospectus, which falls on a Saturday. The Bank will also give written notice of these dividend rates to the registered holders of Preferred Shares Series 31.

Beneficial owners of Preferred Shares Series 31 who, on or after October 28, 2019, wish to exercise their right of conversion should instruct their broker or other nominee to exercise such right before 5:00 p.m. (EDT) on November 12, 2019.

Conversion inquiries should be directed to BMO’s Registrar and Transfer Agent, Computershare Trust Company of Canada, at 1-800-340-5021.

BMO.PR.W is a FixedReset, 3.80%+222, that commenced trading 2014-7-30 after being announced 2014-7-22. It is tracked by HIMIPref™ and has been assigned to the FixedReset – Discount subindex.

I will have more to say once the reset rate is announced October 28.

This entry was posted on Tuesday, October 8th, 2019 at 12:50 am 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.