{"id":33502,"date":"2016-08-16T23:55:57","date_gmt":"2016-08-17T04:55:57","guid":{"rendered":"http:\/\/prefblog.com\/?p=33502"},"modified":"2016-08-16T23:55:57","modified_gmt":"2016-08-17T04:55:57","slug":"bmo-pr-q-19-conversion-to-bmo-pr-a","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=33502","title":{"rendered":"BMO.PR.Q: 19% Conversion to BMO.PR.A"},"content":{"rendered":"

Bank of Montreal has announced<\/a>:<\/p>\n

that 2,174,393 of its 11.6 million Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 25 (the “Preferred Shares Series 25”) will be converted on August 25, 2016, on a one-for-one basis, into Non-Cumulative Floating Rate Class B Preferred Shares, Series 26 of the Bank (the “Preferred Shares Series 26”). As a result, on August 25, 2016, the Bank will have 9,425,607 Preferred Shares Series 25 and 2,174,393 Preferred Shares Series 26 issued and outstanding. The Preferred Shares Series 25 are listed and the Preferred Shares Series 26 will be listed on the Toronto Stock Exchange under the symbols BMO.PR.Q and BMO.PR.A, respectively.<\/p><\/blockquote>\n

BMO.PR.Q was issued 2011-3-11<\/a> as a FixedReset 3.90%+115 announced 2011-3-2<\/a>. Its extension<\/a> and reset to 1.805%<\/a> have been reported on PrefBlog. It will be noted that the prospectus does not mention the NVCC rules<\/a> except as follows:<\/p>\n

The Basel Committee on Banking Supervision has announced new international bank capital adequacy rules (commonly called Basel III) which will amend the existing Basel II capital management framework. The Office of the Superintendent of Financial Institutions of Canada (\u2018\u2018OSFI\u2019\u2019) has announced that it plans to adopt the new Basel III rules for purposes of Canadian bank capital guidelines. Under the new Basel III rules, effective January 1, 2013, all non-common Tier 1 and Tier 2 capital instruments issued by a bank must have, either in their contractual terms and conditions or by way of statute in the issuer\u2019s home country, a clause requiring a full and permanent conversion into common shares of such bank upon certain trigger events at the point where such bank is determined to be no longer viable. The Preferred Shares Series 25 and, if and when issued, the Preferred Shares Series 26 as a result may not fully qualify as non-common Tier 1 capital under the new capital rules as no such conversion mechanism exists. For purposes of being included in the Bank\u2019s regulatory capital under the new capital rules, the Preferred Shares Series 25 and the Preferred Shares Series 26 would be phased out beginning January 31, 2013 (their recognition will be capped at 90% of total Tier 1 capital from January 1, 2013, with the cap reducing by 10% in each subsequent year). As a result, the Bank may, with the prior approval of the Superintendent, redeem the Preferred Shares Series 25 and the Preferred Shares Series 26, if any, in accordance with their respective terms.<\/p><\/blockquote>\n

Accordingly, I treat these shares as having a DeemedRetraction for analytical purposes.<\/p>\n

BMO.PR.Q is tracked by HIMIPref™ and assigned to the FixedReset subindex. I regret to say I neglected to make a recommendation<\/a> regarding conversion.<\/p>\n","protected":false},"excerpt":{"rendered":"

Bank of Montreal has announced: that 2,174,393 of its 11.6 million Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 25 (the “Preferred Shares Series 25”) will be converted on August 25, 2016, on a …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-33502","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/33502","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=33502"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/33502\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=33502"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=33502"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=33502"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}