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Bank of Montreal launches offering of subordinated notes

Bank of Montreal is offering C$1.0 billion of subordinated notes through its Canadian medium-term note program.

The net proceeds will be used for general banking purposes. The offering is expected to close Sept. 16.

The notes bear fixed interest at 2.88% per year, paid semiannually, until Sept. 17, 2024. After that, the interest will be equal to the three-month bankers' acceptance rate plus 1.18%, paid quarterly, until their maturity on Sept. 17, 2029.

The bank may, with prior approval of Canada's Office of the Superintendent of Financial Institutions, redeem the notes on or after Sept. 17, 2024, at par, in whole at any time or in part from time to time, on not less than 30 days' and not more than 60 days' notice to registered holders. The redemption price is equal to par, together with accrued and unpaid interest to but excluding the date fixed for redemption.

At any time on or after a special event redemption date before Sept. 17, 2024, the bank may, with the prior approval of the Office of the Superintendent of Financial Institutions, on giving not more than 60 days' nor less than 30 days' notice to the registered holders, redeem all the notes. The redemption price is equal to the greater of the Canada yield price and par, together in either case with accrued and unpaid interest to but excluding the date fixed for redemption.

BMO Capital Markets is serving as lead agent on the issue.