Principal At Risk Notes
Bank of Montreal Preferred Share AutoCallable Principal At Risk Notes, Series 439 (CAD) (F-Class)
|Bank of Montreal|
|BMO Laddered Preferred Share Index ETF|
|June 14, 2017|
|June 14, 2022|
- The Notes offer the potential for a variable return while providing contingent protection against a slight to moderate decline in the price of the units of the BMO Laddered Preferred Share Index ETF (the “Reference ETF”) over the term of the Notes. The Principal Amount is NOT protected under these Notes.
- Issuer: Bank of Montreal.
- Medium Term: 5-year term to maturity (subject to the Notes being automatically called by the Bank).
- Reference ETF: The Reference ETF is an exchange traded fund that seeks to replicate, to the extent possible, the performance net of expenses, of a Canadian preferred shares index, currently, the Solactive Laddered Canadian Preferred Share Index. The investment strategy of the Reference ETF is to invest in and hold the constituent securities of the Solactive Laddered Canadian Preferred Share Index in the same proportion as they are reflected in the Solactive Laddered Canadian Preferred Share Index or securities intended to replicate the performance of the Solactive Laddered Canadian Preferred Share Index.*
- AutoCall Feature: The Notes will be automatically called by the Bank if the Closing Price of the units of the Reference ETF is equal to or above the AutoCall Level (i.e., 100% of the Initial Price) on any Valuation Date. If the AutoCall feature is triggered, Holders will receive payment of the Principal Amount, plus a Variable Return that increases each Valuation Date. If the Closing Price of the units of the Reference ETF is never equal to or above the AutoCall Level on any Valuation Date, the Notes will not be automatically called by the Bank and there will be no Variable Return paid on the Notes.
- Potential Variable Return: If the Closing Price of the units of the Reference ETF is equal to or above the AutoCall Level on any Valuation Date, the Notes will be automatically called by the Bank and Holders will receive a payment of a Fixed Return, plus 5.00% additional participation in the price performance of the units of the Reference ETF above the Fixed Return specified for that Valuation Date. Fixed Return in 9 months: 16.00%; 24 months: 20.00%; 36 months: 25.00%; 48 months: 30.00%; 60 months: 35.00% (or an annualized return of 21.95%, 9.54%, 7.71%, 6.77%, and 6.18% respectively).
- Contingent Protection: If the ETF Return is negative, the Principal Amount will be protected so long as the Final Price is equal to or above the Barrier Level (i.e., 80% of the Initial Price) on the Final Valuation Date. If the Final Price is below the Barrier Level on the Final Valuation Date, the Maturity Payment will be equal to the Principal Amount reduced by the actual ETF Return (which will be a negative amount equal to the decline in the unit price of the Reference ETF), subject to the Minimum Payment Amount. The calculation and timing of the payments at Maturity may be adjusted upon the occurrence of certain special circumstances.
- Daily Secondary Market: Provided by BMO Capital Markets (may be subject to limitations as described in the Prospectus).
|May 19, 2017|
Bid Price (i) may be subject to an Early Trading Charge (equal to a percentage of the Principal Amount), (ii) on the date of sale may be at a discount from the maturity payment that would be payable if the Principal At Risk Notes were maturing on such date, and (iii) reflects the most recent price available. The Bid Price may fluctuate and/or be adversely affected by a number of factors, including certain factors discussed in the Offering Documents.
Past performance is not indicative of future performance and returns, if any, will fluctuate with any change in value of the reference asset(s). This information should not be construed as an estimate or forecast of the performance of the reference asset(s) or of the return that a holder may realize.
The above summary and the other material on this website is for information purposes only and does not constitute an offer to sell or a solicitation to purchase Principal At Risk Notes. Investors should read the Base Shelf Prospectus and applicable Prospectus Supplement and/or Pricing Supplement (collectively, the “Offering Documents”) which set out the specific terms and risk factors associated with an investment in the Principal At Risk Notes carefully and discuss the suitability of the Principal At Risk Notes with their investment advisor before making any investment decisions. The offering and sale of Principal At Risk Notes may be prohibited or restricted by laws in certain jurisdictions. Principal At Risk Notes may only be purchased where they may be lawfully offered for sale and only through individuals qualified to sell them. For a copy of the applicable Offering Documents, click on the link above.
Amounts, if any, paid to holders of Principal At Risk Notes will depend on the performance of the reference asset(s) described in the applicable Offering Documents. Bank of Montreal does not guarantee that holders will receive an amount equal to the amount invested in the Principal At Risk Notes and does not guarantee that any return or distributions will be paid on the Principal At Risk Notes (other than any minimum amount that may be stipulated in the applicable Offering Documents). Since the principal amount of the Principal At Risk Notes will not be guaranteed and will be at risk, holders may not receive any amount at maturity (other than any minimum amount that may be stipulated in the applicable Offering Documents) and holders could lose substantially all of their investment in the Principal At Risk Notes. Please see the Offering Documents for complete details, including the precise formula for determining the return, if any, on a Principal At Risk Note.