$275M Bank of Montreal Preferred Share Offering

On March 20, 2009, Bank of Montreal issued $275 million of Non-Cumulative 5-Year Rate Reset Class B Preferred Shares Series 21. The offering was underwritten on a bought deal basis by a syndicate led by BMO Capital Markets and included CIBC World Markets, RBC Capital Markets, Scotia Capital Inc., TD Securities Inc., National Bank Financial Inc., Desjardins Securities Inc., HSBC Securities (Canada) Inc., Blackmont Capital Inc., Brookfield Financial Corp., Canaccord Capital Corporation, Dundee Securities Corporation, Laurentian Bank Securities Inc. and Raymond James Ltd.

The preferred shares were issued to the public at a price of $25 per preferred share and holders will be entitled to receive non-cumulative preferential quarterly dividends as and when declared by the board of directors of the Bank, payable in the amount of $0.40625 per preferred share, to yield 6.50 per cent annually commencing on the closing date and ending on, but excluding, May 25, 2014.

Thereafter, the dividend rate will reset every five years to be equal to the 5-Year Government of Canada Bond Yield plus 4.58 per cent. Subject to certain conditions, holders may elect to convert any or all of their preferred shares into an equal number of Non-Cumulative Floating Rate Class B Preferred Shares Series 22 on May 25, 2014 and on May 25th of every fifth year thereafter. The deal was announced on March 11, 2009 and closed on March 20, 2009.

Bank of Montreal was advised by in-house counsel Conni Gibson and assisted by Rick Fullerton, Kashif Zaman and Justin Williams (corporate) and Andy McGuffin (tax) of Osler, Hoskin & Harcourt LLP.

BMO Capital Markets and the syndicate of underwriters were advised by Andrew Parker and Matthew Appleby (business law), together with Barry Ryan, as well as Gabrielle M. Richards (tax) of McCarthy Tétrault LLP.