Bank of Montreal plans six-year coupon notes tied to commodity basket

By Susanna Moon

Chicago, April 5 - Bank of Montreal plans to price notes due April 28, 2017 linked to an equally weighted basket of three exchange-traded commodity futures contracts and four commodity spot prices, according to a 424B2 filing with the Securities and Exchange Commission.

The underlying components are the copper spot price, nickel spot price, silver spot price, gold spot price, sugar futures contract, Brent crude oil futures contract and cotton futures contract.

The coupon on each coupon payment date will be the sum of the component performances, calculated as follows:

• If a component return is positive, the component performance will equal a digital coupon of 11% to 13%, with the exact rate to be set at pricing;

• If a component return falls by up to 15%, the component performance will equal the component return; and

• If a component return falls by more than 15%, the component performance will equal negative 15%.

Interest is payable annually and cannot be less than zero.

The payout at maturity will be par.

BMO Capital Markets Corp. is the underwriter.

The notes are expected to price April 26 and settle April 29.

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