BMO.PR.S – Series 27 Prospectus – BMO Preferred Shares

The following is a  set of excerpts from the prospectus document for the Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 27. The excerpts, highlight the most relevant information, an investor should know when analyzing this preferred. A link to the prospectus is provided lower in this page.  The original document for BMO.PR.S – Series 27 Prospectus – BMO Preferred Shares was used for the excerpts and the important information was highlighted for quick access.

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Excerpt: Size and initial yield

April 16, 2014 $500,000,000 Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 27 (20,000,000 Shares) The holders of Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 27 (the Preferred Shares Series 27 ) of Bank of Montreal (the Bank ) will be entitled to receive fixed non-cumulative preferential cash dividends, for the initial period from and including the closing date to, but excluding, May 25, 2019 (the Initial Fixed Rate Period ), payable quarterly on the 25th day of February, May, August and November in each year, or if such day is not a business day, on the next business day, as and when declared by the board of directors of the Bank (the Board of Directors ). The initial dividend, if declared, shall be payable on August 25, 2014 and shall be $0.33973 per share, based on the anticipated closing date of April 23, 2014. Thereafter, quarterly dividends shall be at a rate of $0.25 per share.

Excerpt: Reset Terms and Yield

For each five-year period after the Initial Fixed Rate Period (each a Subsequent Fixed Rate Period ), the holders of Preferred Shares Series 27 will be entitled to receive fixed non-cumulative preferential cash dividends, as and when declared by the Board of Directors, payable quarterly on the 25th day of February, May, August and November in each year, in the amount per share per annum determined by multiplying the Annual Fixed Dividend Rate (as defined herein) applicable to such Subsequent Fixed Rate Period by $25.00. The Annual Fixed Dividend Rate for the ensuing Subsequent Fixed Rate Period will be determined by the Bank on the 30th day prior to the first day of such Subsequent Fixed Rate Period and will be equal to the sum of the Government of Canada Yield (as defined herein) on the date on which the Annual Fixed Dividend Rate is determined plus 2.33%. See Details of the Offering

Excerpt: Conversion Terms

Option to Convert Into Preferred Shares Series 28 The holders of Preferred Shares Series 27 will have the right, at their option, to convert their shares into an equal number of Non-Cumulative Floating Rate Class B Preferred Shares, Series 28 of the Bank (the Preferred Shares Series 28 ), subject to certain conditions, on May 25, 2019 and on May 25 every five years thereafter. The holders of Preferred Shares Series 28 will be entitled to receive floating rate non-cumulative preferential cash dividends, as and when declared by the Board of Directors, payable quarterly on the 25th day of February, May, August and November in each year (the initial quarterly dividend period and each subsequent quarterly dividend period is referred to as a Quarterly Floating Rate Period ), in the amount per share determined by multiplying the applicable Quarterly Floating Dividend Rate (as defined herein) by $25.00. The Quarterly Floating Dividend Rate will be equal to the sum of the T-Bill Rate (as defined herein) plus 2.33% (calculated on the basis of the actual number of days elapsed in the applicable Quarterly Floating Rate Period divided by 365) determined on the 30th day prior to the first day of the applicable Quarterly Floating Rate Period. See Details of the Offering

BMO.PR.S – Series 27 Prospectus – BMO Preferred Shares. Original Document

I have presented the most important information regarding the Series 27 preferreds. If you need to go through the original and complete document for BMO.PR.S – Series 27 Prospectus – BMO Preferred Shares is available here.