TORONTO and MONTREAL, Dec. 12,
2022 /CNW/ - Bank of Montreal (TSX: BMO)(NYSE: BMO) (the "Bank",
"we" or "us") today announced the issue and sale of common shares
pursuant to a public offering and a concurrent private placement
for gross proceeds totaling approximately C$3.15 billion. This follows the announcement by
the Office of the Superintendent for Financial Institutions
("OSFI") of its intention to increase the domestic stability buffer
("DSB") for Domestic Systemically Important Banks ("D-SIBs").
On December 8, 2022, OSFI
announced that the DSB level will be set at 3.0% as of February 1, 2023. In addition, OSFI increased the
DSB's range from 0% to 4.0%, from the previous range of 0% to 2.5%.
The DSB applies to all D-SIBs, including the Bank. The Bank intends
to use the net proceeds from the public offering and the concurrent
private placement to align the Bank's capital position with
increased regulatory requirements and for general corporate
purposes. In light of the announced increase to the DSB, as of
February 1, 2023, the Bank expects to
target a Common Equity Tier 1 ratio at or above 11.5%.
Pursuant to the public offering, the Bank has agreed to issue
and sell 11,805,000 common shares at a price of C$118.60 per common share for total gross
proceeds of approximately C$1.40
billion. The public offering is being underwritten on a
bought-deal basis by a syndicate of underwriters led by BMO Capital
Markets. The Bank has granted to the underwriters an option to
purchase up to an additional 1,770,750 common shares at the public
offering price exercisable at any time up to 30 days after closing
of the public offering.
Pursuant to the concurrent private placement, the Bank has
agreed to issue and sell 14,755,477 common shares at the public
offering price to investors consisting of Caisse de dépôt et
placement du Québec ("CDPQ"), OMERS, Alberta Investment Management
Corporation ("AIMCo"), Healthcare of Ontario Pension Plan
("HOOPP"), Public Sector Pension Investment Board ("PSP"), Canada
Pension Plan Investment Board ("CPP Investments") and BNP Paribas
SA ("BNPP", and together with CDPQ, OMERS, AIMCo, HOOPP, PSP and
CPP Investments, the "Private Placement Investors"), for aggregate
gross proceeds of approximately C$1.75
billion. Upon the closing of the concurrent private
placement, each of the Private Placement Investors will be entitled
to a commitment fee equal to 3.5% of the aggregate purchase price
for the common shares for which it has subscribed. All common
shares issued pursuant to the concurrent private placement will be
subject to a statutory hold period under applicable Canadian
securities laws.
The anticipated closing date of the public offering and the
concurrent private placement, other than the private placement to
BNPP, is December 16, 2022. Closing
of the public offering and the concurrent private placement is
subject to customary conditions, including Toronto Stock Exchange
and New York Stock Exchange approvals. Closing of the private
placement with the Private Placement Investors other than BNPP will
occur concurrently with, and is conditional on, the closing of the
public offering. Closing of the public offering will occur
concurrently with, and is conditional on, the closing of the
private placement with the Private Placement Investors other than
BNPP. Closing of the private placement with BNPP is conditional on
the closing of the public offering and the concurrent private
placement with the Private Placement Investors other than BNPP and
the closing of the Bank's previously-announced acquisition of Bank
of the West from BNPP. Closing of the private placement with BNPP
will occur no later than concurrently with the closing of the Bank
of the West acquisition. The closing of the public offering and
concurrent private placement, other than the private placement to
BNPP, is not conditional on the closing of the Bank of the West
acquisition. Common shares issued and sold pursuant to the public
offering and concurrent private placement, other than the private
placement to BNPP unless it closes prior to the Bank of the West
acquisition, will remain outstanding whether or not the Bank of the
West acquisition is completed.
The common shares are being offered for sale in the public
offering in all of the provinces and territories of Canada by way of a Canadian prospectus
supplement to the Bank's Canadian short form base shelf prospectus
dated March 11, 2022. The common
shares are being offered for sale in the public offering in
the United States pursuant to the
Bank's registration statement (including a prospectus) filed with
the U.S. Securities and Exchange Commission (the "SEC") and a
prospectus supplement to such registration statement. Before
investing, prospective purchasers in Canada should read the Canadian prospectus
supplement, the Canadian short form base shelf prospectus and the
documents incorporated by reference therein for the purposes of the
public offering, and prospective purchasers in the United States should read the prospectus
in the U.S. registration statement, the U.S. prospectus supplement
and the other documents that the Bank has filed and will file with
the SEC for more complete information about the Bank and the public
offering in Canada and
the United States. Common shares
may also be offered on a private placement basis in other
international jurisdictions in reliance on applicable private
placement exemptions.
Copies of the Canadian and U.S. prospectus supplements, the
Canadian short form base shelf prospectus, and the registration
statement on Form F-3, when available, may be obtained upon request
in Canada by contacting BMO
Nesbitt Burns Inc., Brampton Distribution Centre C/O The Data Group
of Companies, 9195 Torbram Road, Brampton, Ontario, L6S 6H2 by telephone at
905-791-3151 Ext 4312 or by email at torbramwarehouse@datagroup.ca,
and in the United States by
contacting BMO Capital Markets Corp., Attn: Equity Syndicate
Department, 151 W 42nd Street, 32nd Floor, New York, NY 10036, or by telephone at (800)
414-3627 or by email at bmoprospectus@bmo.com. Copies of the
applicable offering documents, when available, can be obtained free
of charge under the Bank's profile on SEDAR at www.sedar.com and
EDGAR at www.sec.gov.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there
be any sale of these securities in any state or jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction.
About BMO Financial Group
Serving customers for 200
years and counting, BMO is a highly diversified financial services
provider - the 8th largest bank, by assets, in North America. With total assets of
C$1.14 trillion as of October 31, 2022, and a team of diverse and
highly engaged employees, BMO provides a broad range of personal
and commercial banking, wealth management and investment banking
products and services to 12 million customers and conducts business
through three operating groups: Personal and Commercial Banking,
BMO Wealth Management and BMO Capital Markets.
Cautionary statement regarding forward-looking
information
Certain statements in this press release are forward-looking
statements. All such statements are made pursuant to the "safe
harbor" provisions of, and are intended to be forward-looking
statements under, the United States Private Securities Litigation
Reform Act of 1995 and any applicable Canadian securities
legislation. Forward-looking statements in this press release may
include, but are not limited to, statements with respect to the
closing of the public offering and the concurrent private
placement, the use of proceeds of the public offering and the
concurrent private placement, the closing of the Bank of the West
acquisition and statements that the Bank expects to target a Common
Equity Tier 1 ratio at or above 11.5%. Forward looking statements
are typically identified by words such as "will", "anticipated",
"intend" and "scheduled" or negative or grammatical variations
thereof.
By their nature, forward-looking statements require us to make
assumptions and are subject to inherent risks and uncertainties,
both general and specific in nature. There is significant risk that
predictions, forecasts, conclusions or projections will not prove
to be accurate, that our assumptions may not be correct, and that
actual results may differ materially from such predictions,
forecasts, conclusions or projections. We caution readers of this
press release not to place undue reliance on our forward-looking
statements, as a number of factors – many of which are beyond our
control and the effects of which can be difficult to predict –
could cause actual future results, conditions, actions or events to
differ materially from the targets, expectations, estimates or
intentions expressed in the forward-looking statements.
The future outcomes that relate to forward-looking statements
may be influenced by many factors, including, but not limited to:
the possibility that the public offering and the concurrent private
placement do not close when expected, or at all, because
conditions to closing are not satisfied on a timely basis, or at
all, the possibility that the acquisition of Bank of the West does
not close when expected, or at all, because required regulatory
approvals and other conditions to closing are not received or
satisfied on a timely basis, or at all, and those other factors
discussed in the "Risks That May Affect Future Results" section,
and the sections related to credit and counterparty, market,
insurance, liquidity and funding, operational non-financial, legal
and regulatory, strategic, environmental and social, and reputation
risk, in the "Enterprise-Wide Risk Management" section of BMO's
2022 Annual Report, all of which outline certain key factors and
risks that may affect our future results and our ability to
anticipate and effectively manage risks arising from all of the
foregoing factors. We caution that the foregoing list is not
exhaustive of all possible factors. Other factors and risks could
adversely affect our results. Investors and others should carefully
consider these factors and risks, as well as other uncertainties
and potential events, and the inherent uncertainty of
forward-looking statements.
We do not undertake to update any forward-looking statements,
whether written or oral, that may be made from time to time by us
or on our behalf, except as required by law.
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SOURCE BMO Financial Group