Principal At Risk Notes
Bank of Montreal Canadian Capped Utilities Callable Income Principal At Risk Notes, Series 505 (CAD), Due February 7, 2025
|Bank of Montreal|
|S&P/TSX Capped Utilities Index |
|February 07, 2018|
|February 07, 2025|
|6.00% Per Annum|
- The Notes offer semi-annual coupon payments for investors while providing contingent protection against a slight to moderate decline in the S&P/TSX Capped Utilities Index (Price Return Version) (the “Reference Index”) over the term of the Notes. The Principal Amount is NOT protected under these Notes.
- Issuer: Bank of Montreal.
- Medium Term: 7-year term to maturity (subject to the Notes being automatically called by the Bank).
- Reference Index: The S&P/TSX Capped Utilities Index (Price Return Version) is comprised of securities of Canadian utilities sector issuers. S&P/TSX Capped Utilities Index constituents are selected from constituents included in the S&P/TSX Composite Index that are classified in the Global Industry Classification System (GICS®) utilities sector. The relative weight of any single constituent of the S&P/TSX Capped Utilities Index is capped at 25%.*
- Contingent Semi-Annual Coupon Payments: Semi-annual Coupons equal to 3.00% (equivalent to 6.00% per annum), provided that the Closing Level of the Reference Index is equal to or above the Coupon Knock-Out Level (i.e., 70% of the Initial Level) on the applicable Observation Date. If the Closing Level of the Reference Index is below the Coupon Knock- Out Level on an Observation Date, then no Coupon will be payable to a Holder on the related Coupon Payment Date.
- AutoCall Feature: The Notes will be automatically called by the Bank if the Closing Level of the Reference Index is equal to or above the AutoCall Level (i.e., 110% of the Initial Level) on any Observation Date. If the AutoCall feature is triggered, Holders will receive the Principal Amount plus the applicable Coupon on the corresponding Coupon Payment Date (in this case, the Call Date). If the Closing Level of the Reference Index is never equal to or above the AutoCall Level on any Observation Date, the Notes will not be automatically called by the Bank. If the Notes are automatically called by the Bank before Maturity, the Notes will be cancelled and Holders will not be entitled to receive any subsequent payments in respect of the Notes.
- Contingent Protection: If the Index Return is negative, the Principal Amount will be protected so long as the Final Level is equal to or above the Barrier Level (i.e., 70% of the Initial Level) on the Final Valuation Date. If the Final Level is below the Barrier Level on the Final Valuation Date, the Maturity Payment will be equal to the Principal Amount reduced by the Index Return (which will be a negative amount equal to the decline in the Reference Index), 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 an early trading charge of up to 3.50% declining to zero over 180 days after the Issue Date and other limitations as described in the Prospectus).
|May 22, 2018|
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.