Bank of Montreal prices $22 million linked to housing stocks; BofA offers S&P-linked notes

By Sheri Kasprzak

New York, Sept. 23 – It was an active session for structured products with quite a few add-ons in the mix.

Among the new issues, Bank of Montreal hit the market with $22 million of Raymond James Housing Opportunity Series 2 equity-linked notes. The notes are linked to a basket of 13 stocks that include Apartment Investment and Management Co., American Homes 4 Rent, American Residential Properties, Inc., Catchmark Timber Trust, Inc., D.R. Horton, Inc., St. Joe Co., Mohawk Industries, Inc., Potlatch Corp., PGT, Inc., Post Properties, Inc., Toll Brothers, Inc., WCI Communities, Inc. and Weyerhaeuser Co. The weighting is 5.5% for American Residential Properties, 2.75% for Catchmark, 6.75% for WCI and 8.5% for each of the remaining stocks.

The notes are due Sept. 30, 2016 and may pay a variable coupon each quarter. The coupon will depend on the total dividends paid on the shares during the preceding quarter.

The payout at maturity will be 97% of the sum of par plus the basket return. This calculation will result in a payout below par if the basket return does not exceed 3.09%.

The initial share price of each stock will be determined over three averaging dates – Sept. 18, Sept. 21 and Sept. 22 – occurring shortly before issuance. Likewise, the final share price of each stock will be determined over three valuation dates, which are Sept. 23, 2016, Sept. 26, 2016 and Sept. 27, 2016.

BofA offers notes

In other news, Bank of America Corp. priced $16.22 million of 0% Accelerated Return Notes linked to the S&P 500 index.

The notes are due Nov. 25, 2016 and pay at maturity par of $10 plus 300% of any index gain, up to a maximum return of 14.4%. Investors will be exposed to any losses.

BofA Merrill Lynch is the underwriter.

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