New Issue: Bank of Montreal prices $256,000 19.11% reverse exchangeables tied to Diamond Foods

By Marisa Wong

Madison, Wis., Feb. 28 - Bank of Montreal priced $256,000 of reverse exchangeable notes due May 31, 2012 linked to the common stock of Diamond Foods, Inc., according to a 424B2 filing with the Securities and Exchange Commission.

The three-month notes carry a coupon of 19.11% per year. Interest is payable monthly.

The payout at maturity will be par unless Diamond Foods stock closes below the trigger price - 68% of the initial share price - during the life of the notes and the final share price is less than the initial share price, in which case the payout will be a number of shares of Diamond Foods stock equal to $1,000 divided by the initial share price or, at the issuer's option, a cash amount equal to the value of those shares.

BMO Capital Markets Corp. is the agent.

Issuer:	Bank of Montreal
Issue:	Reverse exchangeable notes
Underlying stock:	Diamond Foods, Inc. (Symbol: DMND)
Amount:	$256,000
Maturity:	May 31, 2012
Coupon:	19.11%, payable monthly
Price:	Par
Payout at maturity:	If Diamond Foods stock closes below trigger price during life of notes and final share price is less than initial share price, a number of Diamond Foods shares equal to $1,000 divided by initial share price or equivalent amount in cash; otherwise, par
Initial share price:	$24.14
Trigger price:	$16.42, 68% of initial share price
Pricing date:	Feb. 24
Settlement date:	Feb. 29
Agent:	BMO Capital Markets Corp.
Fees:	2%
Cusip:	06366Q3S4

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