Bond Montreal Bank 7.7% ( US06368LQ586 ) in USD

Issuer Montreal Bank
Market price refresh price now   107.166 %  ▲ 
Country  Canada
ISIN code  US06368LQ586 ( in USD )
Interest rate 7.7% per year ( payment 2 times a year)
Maturity 25/05/2084



Prospectus brochure of the bond Bank of Montreal US06368LQ586 en USD 7.7%, maturity 25/05/2084


Minimal amount 200 000 USD
Total amount 1 000 000 000 USD
Cusip 06368LQ58
Standard & Poor's ( S&P ) rating BBB- ( Lower medium grade - Investment-grade )
Next Coupon 26/05/2026 ( In 154 days )
Detailed description Bank of Montreal (BMO) is a major Canadian multinational bank offering a wide range of financial services including personal and commercial banking, wealth management, and investment banking, operating across North America and internationally.

The Bond issued by Montreal Bank ( Canada ) , in USD, with the ISIN code US06368LQ586, pays a coupon of 7.7% per year.
The coupons are paid 2 times per year and the Bond maturity is 25/05/2084
The Bond issued by Montreal Bank ( Canada ) , in USD, with the ISIN code US06368LQ586, was rated BBB- ( Lower medium grade - Investment-grade ) by Standard & Poor's ( S&P ) credit rating agency.







FWP 1 d794169dfwp.htm FWP
Registration Statement No. 333-264388
Filed Pursuant to Rule 433
February 29, 2024
Pricing Term Sheet
Bank of Montreal
US$1,000,000,000
7.700% Fixed Rate Reset Limited Recourse Capital Notes, Series 4
(Non-Viability Contingent Capital (NVCC))
(Subordinated Indebtedness)
Issuer:
Bank of Montreal (the "Bank")
Issue:
7.700% Fixed Rate Reset Limited Recourse Capital Notes, Series 4 (Non-Viability Contingent Capital
(NVCC)) (Subordinated Indebtedness) (the "Notes")
Expected Credit Ratings*:
S&P: BBB-
Moody's: Baa3 (hyb)
Format:
SEC Registered
Principal Amount:
US$1,000,000,000
Price to Public (Issue Price):
100.000%
Underwriting Commission:
1.000% per Note
Net Proceeds to the Bank after
US$990,000,000
Underwriting Commission and Before
Expenses:
Trade Date:
February 29, 2024
Issue Date:
March 8, 2024 (T+6) (the "Issue Date")
Initial Interest Reset Date:
May 26, 2029 (the "Initial Interest Reset Date")
Maturity Date:
May 26, 2084 (60 years)
Interest Reset Dates:
May 26, 2029 and each fifth anniversary date thereafter occurring prior to and not including the Maturity
Date (each such date, an "Interest Reset Date").
Interest:
The Notes will bear interest on their principal amount (i) from and including the Issue Date to, but
excluding, the Initial Interest Reset Date, at a rate of 7.700% per annum and (ii) during each Rate Reset
Period (as defined in the Prospectus Supplement), at a rate per annum equal to the U.S. Treasury Rate (as
defined in the Prospectus Supplement) on the applicable Interest Rate Calculation Date (as defined below)
plus 3.452%.


For each Rate Reset Period, the U.S. Treasury Rate will be determined by the calculation agent on the third
business day immediately preceding the applicable Interest Reset Date (each such date, an "Interest Rate
Calculation Date").
The interest rate on the Notes will in no event be higher than the maximum rate permitted by New York law
as the same may be modified by United States law of general application. In no event will the interest rate
on the Notes be less than zero.
Interest Payment Dates:
Quarterly on February 26, May 26, August 26 and November 26 of each year (each, an "Interest Payment
Date"), beginning on May 26, 2024 (short first coupon).
Interest Deferability:
Interest payments are non-deferrable.
On any Failed Coupon Payment Date (as defined below), the principal amount of, and any accrued and
unpaid interest on, all outstanding Notes will become immediately due and payable by the Bank, subject to
the limited recourse feature described below. Upon delivery to all holders of Notes (the "Noteholders") of
their proportionate share of the Trust Assets (as defined below) following any Failed Coupon Payment Date
in accordance with the limited recourse feature described below, all Notes will cease to be outstanding and
each Noteholder will cease to be entitled to interest thereon. See "Limited Recourse" below.
"Failed Coupon Payment Date" means the fifth business day immediately following an Interest Payment
Date upon which the Bank does not pay interest on the Notes and has not cured such non-payment by
subsequently paying such interest prior to such fifth business day.
Initial Benchmark Treasury:
UST 4.250% due February 28, 2029
Initial Benchmark Treasury Yield:
4.248%
Initial Re-Offer Spread to Benchmark
+345.2 bps
Treasury:
Initial Re-Offer Yield:
7.700%
Day Count / Business Day Convention:
30/360; Following, Unadjusted
Redemption:
The Notes may be redeemed, at the option of the Bank, with the prior written approval of the
Superintendent of Financial Institutions (Canada) (the "Superintendent") and without the consent of the
Noteholders, in whole or in part, on not less than 10 days' and not more than 60 days' prior notice to the
registered Noteholders, on the Initial Interest Reset Date and on each February 26, May 26, August 26 and
November 26 thereafter, at the Redemption Price (as defined below) (an "Optional Redemption").
The Bank may also, at its option, with the prior written approval of the Superintendent and without the
consent of the Noteholders, redeem the Notes, in whole but not in part, on not less than 10 days' and not
more than 60 days' prior notice to the registered Noteholders (i) at any time following a Regulatory Event
Date (as defined in the Prospectus Supplement), or (ii) at any time following the occurrence of a Tax Event
Date (as defined in the Prospectus Supplement), in each case at the Redemption Price (a "Special Event
Redemption").
2


Upon any redemption by the Bank of the Non-Cumulative 5-Year Fixed Rate Reset Class B Preferred
Shares, Series 53 (Non-Viability Contingent Capital (NVCC)) (the "Preferred Shares") held in the Limited
Recourse Trust (as defined below) in accordance with their terms prior to the Maturity Date (such
redemption will be subject to the prior written approval of the Superintendent), outstanding Notes with an
aggregate principal amount equal to the aggregate face amount of Preferred Shares redeemed by the Bank
pursuant to such redemption shall automatically and immediately be redeemed, on a full and permanent
basis, for a cash amount equal to the Redemption Price, without any action on the part of, or the consent of,
the Noteholders. See the Pricing Term Sheet for the Preferred Shares attached hereto (the "Preferred Share
Term Sheet") for circumstances under which the Preferred Shares may be redeemed by the Bank. For
certainty, to the extent that, in accordance with the terms of the Indenture (as defined in the Prospectus
Supplement), the Bank has immediately prior to or concurrently with such redemption of Preferred Shares
redeemed or purchased for cancellation outstanding Notes with an aggregate principal amount equal to the
aggregate face amount of Preferred Shares being redeemed such requirement to redeem a corresponding
number of Notes shall be deemed satisfied.
The Bank will not redeem the Notes under any circumstances if such redemption would, directly or
indirectly, result in the Bank's breach of any provision of the Bank Act (Canada) (the "Bank Act") or the
guidelines for capital adequacy requirements for banks in Canada of the Office of the Superintendent of
Financial Institutions (Canada) ("OSFI"), as may be amended from time to time (the "CAR Guideline").
"Redemption Price" of the Notes means the aggregate of (i) the principal amount thereof, plus (ii) any
accrued and unpaid interest thereon up to, but excluding, the date fixed for redemption.
Limited Recourse:
If (i) a Failed Coupon Payment Date occurs, (ii) on the Maturity Date, the Bank does not pay the aggregate
principal amount of the Notes, together with any accrued and unpaid interest thereon, in cash, (iii) an Event
of Default occurs, (iv) in connection with the redemption of the Notes, on the date fixed for such
redemption, the Bank does not pay the Redemption Price in cash, or (v) a Trigger Event occurs (each such
event, a "Recourse Event"), while a Noteholder will have a claim against the Bank for the principal amount
of the Notes and any accrued and unpaid interest thereon (which will then be due and payable), the
Noteholder's sole recourse in respect of such claim will be limited to such Noteholder's proportionate share
of the assets (the "Trust Assets") held by a third party trustee (the "LRT Trustee") in respect of the Notes
in the BMO LRCN Trust (the "Limited Recourse Trust"). The LRT Trustee will hold assets in the Limited
Recourse Trust in respect of more than one series of limited recourse capital notes and the assets (including
the Bank's preferred shares) for each such series will be held separate from the assets for other series.
Computershare Trust Company of Canada will act as the LRT Trustee.
3


Initially, at the time of issuance of the Notes, the Trust Assets will consist of Preferred Shares issued on or
before the Issue Date at an issue price equal to the Canadian Dollar Equivalent (as defined in the Preferred
Share Term Sheet) of US$1,000 per Preferred Share. Following the issuance of the Notes, the Trust Assets
may consist of (i) Preferred Shares (or proceeds with respect to the subscription for units of the Limited
Recourse Trust by the Bank, which are to be used by the Limited Recourse Trust to subscribe for Preferred
Shares), (ii) cash if the Preferred Shares are redeemed for cash, or purchased for cancellation, by the Bank
with the prior written approval of the Superintendent (other than the portion of such cash in respect of any
declared and unpaid dividends), (iii) common shares of the Bank ("Common Shares") issued upon the
conversion of the Preferred Shares into Common Shares as a result of a Trigger Event (other than any
Dividend Common Shares (as defined below), if any), or (iv) any combination thereof, depending on the
circumstances. At no time shall the Trust Assets include any dividends paid on the Preferred Shares, any
right to receive declared, but unpaid, dividends on the Preferred Shares or any Dividend Common Shares.
The number of Preferred Shares issued on or before the Issue Date will be equal to the total principal
amount of the Notes divided by US$1,000. If the Trust Assets consist solely of Preferred Shares at the time
a Recourse Event occurs, the LRT Trustee will deliver to each Noteholder one Preferred Share for each
US$1,000 principal amount of Notes held by such Noteholder, which shall be applied to the payment of the
principal amount of the Notes, and such delivery of Preferred Shares will be each Noteholder's sole remedy
against the Bank for repayment of the principal amount of the Notes and any accrued but unpaid interest
thereon then due and payable.
Upon the occurrence of a Recourse Event that is a Trigger Event, each Noteholder will be entitled to receive
such Noteholder's proportionate share of the Trust Assets and the LRT Trustee will deliver to each
Noteholder such Noteholder's proportionate share of Common Shares issued in connection with the Trigger
Event upon the conversion of the Preferred Shares into Common Shares upon the happening of an NVCC
Automatic Conversion (as defined below in the Preferred Share Term Sheet) upon the occurrence of such
Trigger Event (other than any Dividend Common Shares). The number of Common Shares issuable in
connection with the Trigger Event will be calculated based on a Share Value (as defined below in the
Preferred Share Term Sheet) of US$1,000 plus declared and unpaid dividends, if any, up to, but excluding,
the date of the Trigger Event, expressed in Canadian dollars. The delivery of such Common Shares (other
than any Common Shares issued in respect of the portion of the Share Value, if any, equal to any declared
and unpaid dividends (the "Dividend Common Shares"), which Dividend Common Shares shall not be
delivered to the Noteholders and shall either be retained by the Limited Recourse Trust or sold by the
Limited Recourse Trust with the proceeds distributed to the Bank) shall be applied to the payment of the
principal amount of the Notes, and such delivery of Common Shares will be each Noteholder's sole remedy
against the Bank for repayment of the principal amount of the Notes and any accrued but unpaid interest
thereon then due and payable. See "NVCC Automatic Conversion" below.
The receipt by a Noteholder of such Noteholder's proportionate share of the Trust Assets upon the
occurrence of a Recourse Event shall exhaust the remedies of such Noteholders under the Notes. If a
Noteholder does not receive its proportionate share of the Trust Assets under such circumstances, the sole
remedy of such Noteholder for any claims against the Bank shall be limited to a claim for the delivery of
such Trust Assets.
4


In case of any shortfall resulting from the value of the Trust Assets being less than the principal amount of
and any accrued and unpaid interest on the Notes, all losses arising from such shortfall shall be borne by the
Noteholders.
All claims of any Noteholder against the Bank under the Notes will be extinguished upon receipt by such
Noteholder of its proportionate share of the Trust Assets.
NVCC Automatic Conversion:
Upon the occurrence of a Trigger Event, each outstanding Preferred Share will automatically and
immediately be converted, on a full and permanent basis, without any action on the part of the holder
thereof, into fully-paid and non-assessable Common Shares, the number of which is to be determined in
accordance with the NVCC Automatic Conversion Formula (as defined in the Preferred Share Term Sheet).
See "NVCC Automatic Conversion" in the Preferred Share Term Sheet for more details.
Immediately following such NVCC Automatic Conversion (as defined in the Preferred Share Term Sheet),
pursuant to the limited recourse feature described above, each Noteholder will be entitled to receive such
Noteholder's proportionate share of the Trust Assets and the LRT Trustee will deliver to each Noteholder
such Noteholder's proportionate share of Common Shares issued in connection with the Trigger Event
(other than any Dividend Common Shares) upon the conversion of the Preferred Shares into Common
Shares upon the happening of an NVCC Automatic Conversion upon the occurrence of such Trigger Event.
See "Limited Recourse" above.
Status and Subordination:
The Notes will be direct unsecured subordinated indebtedness of the Bank and rank subordinate to all of the
Bank's deposit liabilities and all of the Bank's other indebtedness (including all of the Bank's other
unsecured and subordinated indebtedness) from time to time issued and outstanding, except for such
indebtedness which by its terms ranks equally in right of payment with, or is subordinate to, the Notes.
Upon the occurrence of a Recourse Event, including a Trigger Event or an Event of Default (as defined
below), the recourse of each holder of the Notes will be limited to the holder's proportionate share of the
Trust Assets. The receipt by a Noteholder of its proportionate share of the Trust Assets upon the occurrence
of a Recourse Event shall exhaust the remedies of such Noteholder under the Notes. If a Noteholder does
not receive its proportionate share of the Trust Assets under such circumstances, the sole remedy of the
Noteholder for any claims against the Bank will be limited to a claim for the delivery of such Trust Assets.
If the Trust Assets that are delivered to the Noteholders under such circumstances comprise of Preferred
Shares or Common Shares, such Preferred Shares or Common Shares will rank on parity with the Bank's
other Class B preferred shares or Common Shares, as applicable.
The Notes will not constitute savings accounts, deposits or other obligations that are insured by the United
States Federal Deposit Insurance Corporation, the Deposit Insurance Fund, the Canada Deposit Insurance
Corporation or any other governmental agency or under the Canada Deposit Insurance Corporation Act
(Canada), the Bank Act or any other deposit insurance regime designed to ensure the payment of all or a
portion of a deposit upon the insolvency of the deposit taking financial institution.
5


Events of Default:
The only events of default under the Notes will be the bankruptcy, insolvency or liquidation of the Bank
(each, an "Event of Default").
An Event of Default under the Notes will not include any non-payment by the Bank of the principal amount
of or interest on the Notes, a default in the performance by the Bank of any other covenant of the Bank
contained in the Indenture, or the occurrence of a Trigger Event (including an NVCC Automatic
Conversion).
The occurrence of an Event of Default is a Recourse Event for which the sole remedy of the Noteholders
will be the delivery of the Trust Assets, and the delivery of the Trust Assets to the Noteholders will exhaust
all remedies of such Noteholders in connection with such Event of Default. See "Limited Recourse" above.
Prohibited Owners:
The terms and conditions of the Notes will contain provisions that will provide the Bank with the right not
to deliver some or all, as applicable, of the Preferred Shares or Common Shares (issued upon a Recourse
Event) to any person who the Bank or its transfer agent has reason to believe is an Ineligible Person (as
defined in the Prospectus Supplement) or any person who, by virtue of that delivery would become a
Significant Shareholder (as defined in the Prospectus Supplement).
Purchase for Cancellation:
The Bank may, at any time or from time to time, with the prior written approval of the Superintendent,
purchase Notes in the open market or by tender, by private contract or otherwise. Any Notes so purchased
will be cancelled by the Bank.
If any Notes are so purchased for cancellation, subject to the provisions of the Bank Act, the consent of the
Superintendent and various restrictions on the retirement of Preferred Shares, the Bank shall redeem a
corresponding number of Preferred Shares (which Preferred Shares will have a face amount equal to the
aggregate principal amount of the Notes to be cancelled) then held in the Limited Recourse Trust.
Use of Proceeds:
The net proceeds will be contributed to the general funds of the Bank and will qualify as Additional Tier 1
capital of the Bank for regulatory purposes.
Joint Book-Running Managers:
BMO Capital Markets Corp.
Goldman Sachs & Co. LLC
Morgan Stanley & Co. LLC
Barclays Capital Inc.
BNP Paribas Securities Corp.
Credit Agricole Securities (USA) Inc.
Co-Managers:
Desjardins Securities Inc.
Commonwealth Bank of Australia
HSBC Securities (USA) Inc.
Intesa Sanpaolo IMI Securities Corp.
Lloyds Securities Inc.
nabSecurities, LLC
Natixis Securities Americas LLC
Nomura Securities International, Inc.
CastleOak Securities, L.P.
Mischler Financial Group, Inc.
6


Form and Denomination:
The Notes will be registered in the name of the nominee of The Depository Trust Company. Minimum of
US$200,000 and integral multiples of US$1,000 in excess thereof.
CUSIP / ISIN:
06368LQ58 / US06368LQ586
* A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
Under Rule 15c6-1 of the Securities Exchange Act of 1934, as amended, trades in the secondary market generally are required to settle in two
business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade their Notes more than
two business days prior to the settlement date will be required, by virtue of the fact that the Notes initially will settle in six business days (T+6),
to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement.
Certain of the underwriters may not be U.S. registered broker-dealers and accordingly will not effect any sales within the United States except
in compliance with applicable U.S. laws and regulations, including the rules of the Financial Industry Regulatory Authority.
The Bank has filed a registration statement (File No. 333-237342) (including a prospectus) and a preliminary prospectus supplement with the
SEC for the offering to which this communication relates. Before you invest, you should read those documents and the documents incorporated
therein by reference that the Bank has filed with the SEC for more complete information about the Bank and this offering. You may get these
documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the Bank, any underwriter or any dealer
participating in the offering will arrange to send you the pricing supplement, the prospectus supplement and the prospectus if you request them
by calling BMO Capital Markets Corp. toll-free at 1-866-864-7760, Goldman Sachs & Co. LLC toll-free at 1-866-471-2526, Morgan Stanley &
Co. LLC toll-free at 1-866-718-1649, Barclays Capital Inc. toll-free at 1-888-603-5847, BNP Paribas Securities Corp. toll-free at 1-800-854-5674
or Credit Agricole Securities (USA) Inc. toll-free at 1-866-807-6030.
7


February 29, 2024
Pricing Term Sheet
Bank of Montreal
1,000,000 Non-Cumulative 5-Year Fixed Rate Reset Class B Preferred Shares, Series 53
(Non-Viability Contingent Capital (NVCC))
Capitalized terms used in this document but not defined have the meaning given to them in the Pricing Term Sheet for 7.700% Fixed Rate Reset Limited
Recourse Capital Notes, Series 4 (Non-Viability Contingent Capital (NVCC)) (subordinated indebtedness) (the "Notes") to which this Preferred Share
Term Sheet is attached.
Issuer:
Bank of Montreal (the "Bank")
Issue:
1,000,000 Non-Cumulative 5-Year Fixed Rate Reset Class B Preferred Shares, Series 53 (Non-Viability
Contingent Capital (NVCC)) (the "Preferred Shares")
The Preferred Shares will be held in the Limited Recourse Trust for the benefit of the Bank and, in
particular, to satisfy the recourse of Noteholders in respect of the Bank's obligations under the Indenture.
Expected Credit Ratings*:
S&P: BBB-
Moody's: Baa3 (hyb)
Issue Size:
US$1,000,000,000
Issue Price:
Canadian Dollar Equivalent (as defined below) of US$1,000 per Preferred Share
Face Amount:
US$1,000 per Preferred Share
Issue Date:
March 7, 2024 (T+5)
Dividends:
During the period from and including the date of issue of the Preferred Shares to, but excluding, the Initial
Reset Date (as defined below) (the "Initial Fixed Rate Period"), the holders of Preferred Shares will be
entitled to receive fixed rate non-cumulative preferential cash dividends, as and when declared by the board
of directors of the Bank, subject to the provisions of the Bank Act, payable quarterly in arrears on
February 26, May 26, August 26 and November 26 of each year (each, a "Dividend Payment Date") in an
amount per Preferred Share per annum equal to the Initial Fixed Dividend Rate (as defined below)
multiplied by US$1,000 (or if then held in the Limited Recourse Trust, the Canadian Dollar Equivalent of
US$1,000); provided that, whenever it is necessary to compute any dividend amount in respect of the
Preferred Shares for a period of less than one full quarterly dividend period, such dividend amount shall be
calculated on the basis of the actual number of days in the period and a year of 365 days.
8


During each Subsequent Fixed Rate Period (as defined below), the holders of Preferred Shares will be
entitled to receive fixed rate non-cumulative preferential cash dividends, as and when declared by the board
of directors of the Bank, subject to the provisions of the Bank Act, payable quarterly in arrears on each
Dividend Payment Date, in an amount per Preferred Share per annum equal to the Annual Fixed Dividend
Rate (as defined below) applicable to such Subsequent Fixed Rate Period multiplied by US$1,000 (or if then
held in the Limited Recourse Trust, the Canadian Dollar Equivalent of US$1,000).
The LRT Trustee, as trustee of the Limited Recourse Trust, will, by written notice, provide to the Bank a
waiver (the "Waiver") of its right to receive any and all dividends on the Preferred Shares during the period
from and including the date of the waiver to and including the earlier of (a) the date upon which the LRT
Trustee, as trustee, provides, by written notice, a revocation of the Waiver to the Bank, and (b) the date upon
which the LRT Trustee, as trustee of the Limited Recourse Trust, is no longer the registered holder of
Preferred Shares. Accordingly, no dividends are expected to be declared or paid on the Preferred Shares
while the Preferred Shares are held in the Limited Recourse Trust. The Waiver is applicable to the LRT
Trustee, as trustee of the Limited Recourse Trust, and will not bind a subsequent holder of the Preferred
Shares.
The Bank will covenant in favor of the Limited Recourse Trust that, at any time during which the Waiver is
no longer in effect and the Limited Recourse Trust is a holder of the Preferred Shares, if it does not declare
and pay dividends on the Preferred Shares, it will not declare and pay dividends on any of the other
outstanding series of Class B preferred shares of the Bank.
"Annual Fixed Dividend Rate" means, for any Subsequent Fixed Rate Period, the rate (expressed as a
percentage rate rounded to the nearest one hundred­thousandth of one percent (with 0.000005% being
rounded up)) equal to the sum of the U.S. Treasury Rate (as defined in the Prospectus Supplement, with
respect to the Preferred Shares) on the applicable Fixed Rate Calculation Date (as defined below) plus
3.452%.
"Canadian Dollar Equivalent" means the Canadian dollar equivalent of U.S. dollars using the spot
exchange rate as of 4:30 p.m. New York City time on March 6, 2024.
"Fixed Period End Date" means the Initial Reset Date and each May 26 every fifth year thereafter.
"Fixed Rate Calculation Date" means, for any Subsequent Fixed Rate Period, the third business day
immediately preceding the first day of such Subsequent Fixed Rate Period.
"Initial Fixed Dividend Rate" means, for the Initial Fixed Rate Period, the rate equal to the interest rate per
annum on the Notes in effect as of the Issue Date.
"Initial Reset Date" means May 26, 2029.
"Subsequent Fixed Rate Period" means the period from and including the Initial Reset Date to, but
excluding, the next Fixed Period End Date and each five year period thereafter from and including such
Fixed Period End Date to, but excluding, the next Fixed Period End Date.
9


Dividend Deferability:
If the board of directors of the Bank does not declare dividends, or any part thereof, on the Preferred Shares
on or before the relevant Dividend Payment Date for a particular period, then the entitlement of the holders
of Preferred Shares to receive such dividends, or to any part thereof, for the relevant period shall be forever
extinguished.
The Bank may also be restricted under the Bank Act from paying dividends on the Preferred Shares in
certain circumstances.
Restrictions on Dividends and
So long as any of the Preferred Shares are outstanding, the Bank will not, without the approval of the
Retirement of Shares:
holders of the Preferred Shares, declare, pay or set apart for payment any dividends on any Common Shares
or any other shares of the Bank ranking junior to the Preferred Shares (other than stock dividends on any
shares ranking junior to the Preferred Shares); redeem, purchase or otherwise retire any Common Shares or
any other shares of the Bank ranking junior to the Preferred Shares (except out of the net cash proceeds of a
substantially concurrent issue of shares ranking junior to the Preferred Shares); redeem, purchase or
otherwise retire less than all of the Preferred Shares; or except pursuant to any purchase obligation, sinking
fund, retraction privilege or mandatory redemption provision attaching to any series of preferred shares of
the Bank, redeem, purchase, or otherwise retire any other shares ranking on a parity with the Preferred
Shares, unless in each case all dividends up to and including the dividend payment date for the last
completed period for which dividends are payable have been declared and paid, or set apart for payment, in
respect of each series of cumulative Class B preferred shares then issued and outstanding and on all other
cumulative shares ranking on a parity with the Class B preferred shares of the Bank and there will have been
paid or set apart for payment all declared dividends in respect of each series of non-cumulative Class B
preferred shares of the Bank (including the Preferred Shares) then issued and outstanding and on all other
non-cumulative shares ranking on a parity with the Class B preferred shares of the Bank.
Redemption:
Except as noted below, the Preferred Shares will not be redeemable by the Bank prior to the Initial Reset
Date.
Subject to the provisions of the Bank Act, the prior consent of the Superintendent and to the provisions of
the Preferred Shares, the Bank may redeem all or any part of the outstanding Preferred Shares, at the option
of the Bank and without the consent of the holder, on the Initial Reset Date and on each February 26,
May 26, August 26 and November 26 thereafter, by the payment of an amount in cash for each such share
so redeemed of US$1,000 (or if then held in the Limited Recourse Trust, the Canadian Dollar Equivalent of
US$1,000) per Preferred Share, together with any declared and unpaid dividends (of which none are
expected for so long as the Preferred Shares are held in the Limited Recourse Trust), up to, but excluding,
the date fixed for redemption.
If at any time the Bank redeems Notes in accordance with their terms (including in connection with an
Optional Redemption or a Special Event Redemption) or purchases Notes, in whole or in part, by tender
offer, open market purchases, negotiated transactions or otherwise, for cancellation, then the Bank shall,
subject to the provisions of the Bank Act, the prior consent of the Superintendent and to the provisions of
the Preferred Shares, redeem such number of Preferred Shares with an aggregate face amount equal to the
aggregate principal amount of Notes redeemed or purchased for cancellation by the Bank, by the payment of
an amount in cash for each such share so redeemed of the Canadian Dollar Equivalent of US$1,000 per
Preferred Share, together with any declared and unpaid dividends (of which none are expected for so long as
the Preferred Shares are held in the Limited Recourse Trust) up to, but excluding, the date fixed for
redemption.
10