BMO debuts U.S. business; Laurence Kaplan to lead from New York

By Emma Trincal

New York, April 15 - Laurence Kaplan, former managing director in structured products at RBC Capital Markets, joined BMO Capital Markets last month where he will spearheading a new structured products business group in the United States from New York, sources said.

BMO Capital Markets is the U.S. broker-dealer arm of Bank of Montreal.

The news was first evidenced by Bank of Montreal filing a FWP document on Monday announcing a $50 million deal followed by a 424B2 filing on Wednesday announcing a planned offering.

Several sources confirmed the move.

Just getting started

According to one of them, Laurence Kaplan was appointed March 23 as managing director, head of structured products in New York.

Origination and sales of structured products in the United States is a brand new business for BMO, according to this source.

The person on top of the global structured product operations, among other businesses, is Luke Seabrook, head of the Financial Products Group at BMO Capital Markets in Toronto.

Seabrook's group includes cross-asset derivatives trading and origination, structured products and structured finance businesses, according to a company's press release.

Kaplan reports to Deland Kamanga, managing director in the Toronto-based financial products group.

'Impressive entry'

"Laurence [Kaplan] is one of the leading lights of the business and it's terrific to see him hitting the ground running at BMO. It's important for the industry to have additional, active issuers of structured investments for diversification, and it's a significant development that Bank of Montreal has made such an impressive entry into the business," Keith Styrcula, chairman of the Structured Products Association told Prospect News.

"It's news to me. I didn't know that Kaplan had joined BMO," a sellsider said at another firm in New York.

Canadian credit

"Canadian banks have been underrepresented in the U.S. market considering their geographic proximity," the sellsider continued.

"I don't know if this is because they view the U.S. financial market as highly regulated relative to Canada.

"I definitely think it's an opportunity because a lot of Canadian banks have high credit ratings. The more competitors the better because it validates the space.

"After the Lehman crisis people were wandering if there was going to be a space. I think this is another sign that the industry has weathered the storm and is coming back stronger than ever," the sellsider said.

First filings

On Monday, Bank of Montreal priced $50 million of redeemable range accrual notes due April 28, 2020 based on the performance of Libor, according to an FWP filing with the Securities and Exchange Commission

Interest will accrue at the rate of 6% per year on each day that Libor is 6.5% or less and at the rate of 0.05% per year on each day that Libor is more than 6.5%. Interest is payable quarterly.

The payout at maturity will be par.

The notes are callable at par on any interest payment date.

BMO Capital Markets Corp. is the agent.

On Wednesday, Bank of Montreal in a 424B2 filing with the SEC said that it planned to price 0% principal-protected commodity-linked notes due Oct. 30, 2015 linked to six subindexes of the Dow Jones-UBS Commodity index

The payout at maturity will be par plus the basket gain, capped at 200% of par. Investors will receive at least par.

The notes are expected to price on April 26 and settle on April 28.

BMO Capital Markets Corp. is the underwriter.

BMO Capital Markets is a full-service North American financial services provider, with over 2,200 employees operating in 15 North American offices and 28 worldwide, according to the company's website.

BMO Capital Markets is a member of BMO Financial Group, a financial services provider in North America with $373 billion total assets and more than 36,000 employees as of Jan. 31.

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