By Angela McDaniels
Tacoma, Wash., June 13 – Bank of Montreal increased the maximum issue size of its exchange-traded notes due Dec. 10, 2036 linked to the DWA MLP Select index to $60 million from $52.5 million, according to a 424B2 filing with the Securities and Exchange Commission.
The $7.5 million of additional notes will be sold from time to time at various prices.
Bank of Montreal priced the original $50 million of notes on Dec. 19, 2016 and an additional $2.5 million on Jan. 19, 2018.
The index includes 15 master limited partnerships based on the proprietary Dorsey Wright Relative Strength Ranking Methodology. By comparing the price relationship between each MLP, the index seeks to determine which MLPs are currently showing outperformance relative to their peers within the index universe. At each monthly rebalancing, each MLP is equally weighted within the index.
Each quarter, the notes pay a coupon amount equal to the sum of the cash distributions that a hypothetical holder of the index constituents would have been entitled to receive in the relevant period, reduced by the accrued tracking fee, which accrues on a daily basis at a rate of 0.85% of the indicative note value per year.
On the pricing date, the indicative note value equaled $50. On each subsequent business day, it equals (a) the product of (i) the indicative note value as of the close of the immediately preceding business day multiplied by (ii) the index factor for that business day minus (b) the investor fee for that business day.
The index factor equals the index closing level on that day divided by the index closing level on the immediately preceding business day.
The investor fee is product of (a) the indicative note value as of the close of the immediately preceding business day, (b) 0.85% per year and (c) the quotient of (i) the number of calendar days from and including the immediately preceding business day to such date of determination divided by (ii) 360. The fee accrues daily.
The payout at maturity will be (a) the product of (i) the indicative note value multiplied by (ii) the index factor minus (b) the investor fee plus (c) the final coupon amount minus (d) the accrued tracking fee plus (e) the stub reference distribution amount.
As of Dec. 27, 2016, the notes are putable subject to a minimum of 50,000 notes and a redemption fee equal to 0.125% of the indicative note value. As of June 22, 2017, the notes are callable in whole at any time.
BMO Capital Markets Corp. is the agent.
| Issuer: | Bank of Montreal
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| Issue: | Exchange-traded notes
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| Underlying index: | DWA MLP Select index
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| Maximum amount: | $60 million
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| Maturity: | Dec. 10, 2036
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| Coupon: | Each quarter, notes pay coupon amount equal to sum of cash distributions that hypothetical holder of index constituents would have been entitled to receive in relevant period, reduced by fee that accrues on daily basis at rate of 0.85% per year
|
| Principal amount: | $50
|
| Indicative note value: | On pricing date, $50; on subsequent business days, (a) product of (i) indicative note value as of close of immediately preceding business day multiplied by (ii) index factor for that business day minus (b) investor fee for that business day
|
| Index factor: | Index closing level on that day divided by index closing level on immediately preceding business day
|
| Investor fee: | Product of (a) indicative note value as of close of immediately preceding business day, (b) 0.85% per year and (c) quotient of (i) number of calendar days from and including immediately preceding business day to such date of determination divided by (ii) 360. fee accrues daily.
|
| Payout at maturity: | (a) Product of (i) indicative note value multiplied by (ii) index factor minus (b) investor fee plus (c) final coupon amount minus (d) accrued tracking fee plus (e) stub reference distribution amount.
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| Put option: | Beginning Dec. 27, 2016, subject to a minimum of 50,000 notes and redemption fee equal to 0.125% of indicative note value
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| Call option: | In whole at any time as of June 22, 2017
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| Initial index level: | 883.255
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| Pricing date: | Dec. 19, 2016 for original $50 million
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| Settlement date: | Dec. 22, 2016 for initial notes
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| Reopening dates: | Jan. 19, 2018 for $2.5 million and June 11 for $7.5 million
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| Agent: | BMO Capital Markets Corp.
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| Listing: | Nasdaq Global Market: BMLP
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| Cusip: | 063679104
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