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Bank of Montreal plans equity-linked notes on basket of oil stocks
By Toni Weeks
San Luis Obispo, Calif., Jan. 12 – Bank of Montreal plans to price 0% equity-linked “oil market recovery” notes due July 29, 2016 linked to a basket of common stocks, equally weighted, according to a 424B2 filing with the Securities and Exchange Commission.
The underlying stocks, which were selected by Raymond James & Associates, Inc., are Basic Energy Services, Inc., Bonanza Creek Energy, Inc., Chevron Corp., Concho Resources Inc., Energy Transfer Equity, LP, Chart Industries, Inc., Nabors Industries Ltd., Oasis Petroleum Inc., Occidental Petroleum Corp., Plains GP Holdings, LP, Phillips 66, Patterson-UTI Energy, Inc., RSP Permian, Inc., Targa Resources Corp., Valero Energy Corp. and Whiting Petroleum Corp.
The issue price will be $1,027.50 per $1,000 principal amount of notes.
The payout at maturity will be par plus the basket level percentage minus the redemption adjustment amount of $3.50.
The basket level percentage must exceed 3.1% in order for investors to receive a redemption amount that exceeds the issue price.
For each stock, the initial share price will be determined over three averaging dates, which are Jan. 23, 2015, Jan. 26, 2015 and Jan. 27, 2015, and will equal the average of the average intra-day prices on each averaging date, plus $0.01.
For each stock, the final share price will be the sum of (a) the average of the closing prices on the three valuation dates (July 22, 2016, Jul 25, 2016 and July 26, 2016), minus $0.01, and (ii) the dividend amount for that share.
BMO Capital Markets Corp. is the agent. Raymond James is the distributor and will receive $27.50 per note for its services.
The notes (Cusip: 06366RZF5) are expected to settle Jan. 30.
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