Obligation Montreal Bank 10.25% ( US06367WD260 ) en USD

Montreal Bank

100 % ▼

Canada

US06367WD260 ( en USD )

10.25% par an ( paiement semestriel )

19/08/2021 - Obligation échue

Prospectus brochure de l'obligation Bank of Montreal US06367WD260 en USD 10.25%, échue

1 000 USD

1 315 000 USD

06367WD26

N/A

La Banque de Montréal (BMO) est une institution financière multinationale canadienne offrant une vaste gamme de services bancaires de détail, de gestion de patrimoine, de marchés des capitaux et de services bancaires aux entreprises à l'échelle mondiale.

L'Obligation émise par Montreal Bank ( Canada ) , en USD, avec le code ISIN US06367WD260, paye un coupon de 10.25% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 19/08/2021

5/19/2020
https://www.sec.gov/Archives/edgar/data/927971/000121465920004751/p518201424b2.htm
424B2 1 p518201424b2.htm ARC 744

Registration Statement No.333-237342
Filed Pursuant to Rule 424(b)(2)

Pricing Supplement dated May 14, 2020 to the Prospectus dated April 20, 2020,
the Prospectus Supplement dated April 20, 2020 and the Product Supplement dated April 21, 2020

US$1,315,000
Senior Medium-Term Notes, Series F
Autocallable Reverse Convertible Notes with Contingent Coupons due August 19, 2021
Linked to the common stock of Apple Inc.

·
The notes are designed for investors who are seeking monthly contingent periodic interest payments (as described in more detail below), as well as a return of
principal if the closing level of the common stock of Apple Inc. (the "Reference Asset") on any monthly Observation Date beginning in November 2020 is greater
than 100% of its Initial Level (the "Call Level"). Investors should be willing to have their notes automatically redeemed prior to maturity, be willing to forego any
potential to participate in the appreciation of the Reference Asset and be willing to lose some or all of their principal at maturity.
·
The notes will pay a Contingent Coupon on each Contingent Coupon Payment Date at the Contingent Interest Rate of 0.854% per month (approximately 10.25%
per annum) if the closing level of the Reference Asset on the applicable monthly Observation Date is greater than its Coupon Barrier Level. However, if the closing
level of the Reference Asset is less than or equal to its Coupon Barrier Level on an Observation Date, the notes will not pay the Contingent Coupon for that
Observation Date.
·
Beginning on November 16, 2020, if on any Observation Date, the closing level of the Reference Asset is greater than its Call Level, the notes will be automatically
redeemed. On the following Contingent Coupon Payment Date (the "Call Settlement Date"), investors will receive their principal amount plus the Contingent
Coupon otherwise due. After the notes are redeemed, investors will not receive any additional payments in respect of the notes.
·
The notes do not guarantee any return of principal at maturity. Instead, if the notes are not automatically redeemed, the payment at maturity will be based on the
Final Level of the Reference Asset and whether the Final Level of that Reference Asset has declined from its Initial Level to below its Trigger Level on the
Valuation Date (a "Trigger Event"), as described below.
·
If the notes are not automatically redeemed and a Trigger Event has occurred, investors will lose 1% of the principal amount for each 1% decrease in the level of
the Reference Asset from its Initial Level to its Final Level. In such a case, you will receive a delivery of shares of the Reference Asset (the "Physical Delivery
Amount") or, at our election, the cash equivalent (calculated as described below, the "Cash Delivery Amount"), which will be worth less than the principal amount,
together with the final Contingent Coupon, if payable. Any fractional shares included in the Physical Delivery Amount will be paid in cash.
·
Investing in the notes is not equivalent to a direct investment in the Reference Asset.
·
The notes will not be listed on any securities exchange.
·
All payments on the notes are subject to the credit risk of Bank of Montreal.
·
The notes will be issued in minimum denominations of $1,000 and integral multiples of $1,000.
·
Our subsidiary, BMO Capital Markets Corp. ("BMOCM"), is the agent for this offering. See "Supplemental Plan of Distribution (Conflicts of Interest)" below.
·
The notes will not be subject to conversion into our common shares or the common shares of any of our affiliates under subsection 39.2(2.3) of the Canada Deposit
Insurance Corporation Act (the "CDIC Act").

Terms of the Notes:

Pricing Date:
May 14, 2020

Valuation Date:
August 16, 2021
Settlement Date:
May 19, 2020

Maturity Date:
August 19, 2021
Specific Terms of the Notes:

Autocallable
Reference
Ticker
Initial
Contingent
Coupon
Trigger
Price to Agent's
Proceeds to
Number
Asset
Symbol
Level
Interest Rate
Barrier
1
1
Bank of
Level*
Level*
CUSIP
Principal
Amount
Public
Commission
Montreal
Common
0.854% per month $216.68,
$216.68,
744
stock of Apple
AAPL
$309.54
(approximately
70.00% of 70.00% of 06367WD26 $1,315,000.00
100%
0.75%
99.25%
Inc.
10.25% per
its Initial
its Initial
$9,862.50
$1,305,137.50
annum)
Level
Level
1 Certain dealers who purchased the notes for sale to certain fee-based advisory accounts may have foregone some or all of their selling concessions, fees or commissions. The public offering price for investors purchasing the
notes in these accounts was between $992.50 and $1,000 per $1,000 in principal amount.
Investing in the notes involves risks, including those described in the "Selected Risk Considerations" section beginning on page P-5 hereof, the "Additional Risk Factors Relating to the Notes" section beginning
on page PS-4 of the product supplement, and the "Risk Factors" section beginning on page S-1 of the prospectus supplement and on page 8 of the prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these notes or passed upon the accuracy of this document, the product supplement, the prospectus
supplement or the prospectus. Any representation to the contrary is a criminal offense. The notes will be our unsecured obligations and will not be savings accounts or deposits 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 instrumentality or other entity.
On the date hereof, based on the terms set forth above, the estimated initial value of the notes is $953.80 per $1,000 in principal amount. However, as discussed in more detail below, the actual value of the notes at any
time will reflect many factors and cannot be predicted with accuracy.

BMO CAPITAL MARKETS

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Key Terms of the Notes:

Reference Asset:
The common stock of Apple Inc. (ticker symbol "AAPL"). See "The Reference Asset" below for additional
information.

Contingent Coupons:
If the closing level of the Reference Asset on an Observation Date is greater than its Coupon Barrier Level, a
Contingent Coupon will be paid on the corresponding Contingent Coupon Payment Date at the Contingent
Interest Rate, subject to the automatic redemption feature.

Contingent Interest Rate:
0.854% per month (approximately 10.25% per annum), if payable. Accordingly, each Contingent Coupon, if
payable, will equal $8.54 for each $1,000 in principal amount.

Observation Dates:1
Three trading days prior to each scheduled Contingent Coupon Payment Date.

Contingent Coupon Payment
Interest, if payable, will be paid on the 19th day of each month (or, if such day is not a business day, the next
Dates:1
following business day), beginning on June 19, 2020 and ending on the Maturity Date, subject to the automatic
redemption feature.

Automatic Redemption:
Beginning on November 16, 2020, if, on any Observation Date, the closing level of the Reference Asset is
greater than its Call Level, the notes will be automatically redeemed. No further amounts will be owed to you
under the Notes.

Payment upon Automatic
If the notes are automatically redeemed, then, on the Call Settlement Date, investors will receive their principal
Redemption:
amount plus the Contingent Coupon otherwise due.

Call Settlement Date:1
If the notes are automatically redeemed, the Contingent Coupon Payment Date immediately following the
relevant Observation Date.

Payment at Maturity:
If the notes are not automatically redeemed, the payment at maturity for the notes is based on the performance of
the Reference Asset.

You will receive $1,000 for each $1,000 in principal amount of the note, unless a Trigger Event has occurred.

If a Trigger Event has occurred , you will receive at maturity, for each $1,000 in principal amount of your notes,
a number of shares equal to the Physical Delivery Amount (or, at our election the Cash Delivery Amount.
Fractional shares will be paid in cash. The Physical Delivery Amount will be less than the principal amount
of your notes, and may be zero.

You will also receive the final Contingent Coupon, if payable.

Trigger Event:2
A Trigger Event will be deemed to occur if the Final Level of the Reference Asset is less than its Trigger Level
on the Valuation Date.

Percentage Change:
The quotient, expressed as a percentage, of the following formula:

(Final Level - Initial Level)
Initial Level

Initial Level:2
As set forth on the cover hereof.

Coupon Barrier Level:2
$216.68, which is 70% of the Initial Level (rounded to two decimal places).

Trigger Level:2
$216.68, which is 70% of the Initial Level (rounded to two decimal places).

Call Level:2
100% of the Initial Level.

Final Level:
The closing level of the Reference Asset on the Valuation Date.

Pricing Date:1
May 14, 2020

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Settlement Date:1
May 19, 2020

Valuation Date:1
August 16, 2021

Maturity Date:1
August 19, 2021

Physical Delivery Amount:2
The number of shares of the Reference Asset equal to $1,000 divided by the Initial Level. Any fractional shares
will be paid in cash.

2

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Cash Delivery Amount:2
The amount in cash equal to the product of (1) the Physical Delivery Amount and (2) the Final Level of the
Reference Asset.

Calculation Agent:
BMOCM

Selling Agent:
BMOCM

1 Subject to the occurrence of a market disruption event, as described in the accompanying product supplement.

2 As determined by the calculation agent and subject to adjustment in certain circumstances. See "General Terms of the Notes -- Anti-dilution
Adjustments" in the product supplement for additional information about these adjustments.

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Additional Terms of the Notes

You should read this document together with the product supplement dated April 21, 2020, the prospectus supplement dated April 20, 2020
and the prospectus dated April 20, 2020. This document, together with the documents listed below, contains the terms of the notes and
supersedes all other prior or contemporaneous oral statements as well as any other written materials including preliminary or indicative
pricing terms, correspondence, trade ideas, structures for implementation, sample structures, fact sheets, brochures or other educational
materials of ours or the agent. You should carefully consider, among other things, the matters set forth in Additional Risk Factors Relating to the
Notes in the product supplement, as the notes involve risks not associated with conventional debt securities. We urge you to consult your investment,
legal, tax, accounting and other advisers before you invest in the notes.

You may access these documents on the SEC website at www.sec.gov as follows (or if such address has changed, by reviewing our filings
for the relevant date on the SEC website):

Product supplement dated April 21, 2020:
https://www.sec.gov/Archives/edgar/data/927971/000121465920003554/j420205424b2.htm

Prospectus supplement dated April 20, 2020:
https://www.sec.gov/Archives/edgar/data/927971/000119312520112249/d908040d424b5.htm

Prospectus dated April 20, 2020:
https://www.sec.gov/Archives/edgar/data/927971/000119312520112240/d903160d424b2.htm

Our Central Index Key, or CIK, on the SEC website is 927971. As used in this document, "we", "us" or "our" refers to Bank of Montreal.

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Selected Risk Considerations

An investment in the notes involves significant risks. Investing in the notes is not equivalent to investing directly in the Reference Asset.
These risks are explained in more detail in the "Additional Risk Factors Relating to the Notes" section of the product supplement.

·
Your investment in the notes may result in a loss. -- The notes do not guarantee any return of principal. If the notes are not automatically
redeemed, the payment at maturity will be based on the Final Level and whether a Trigger Event has occurred. If the Final Level is less than its
Trigger Level, a Trigger Event will occur, and you will lose 1% of the principal amount for each 1% that the Final Level is less than the Initial
Level. In such a case, you will receive at maturity a delivery of shares of the Reference Stock, or at our election the cash equivalent, which will
be worth less than the principal amount of the notes and may be zero. Accordingly, you could lose your entire investment in the notes.
·
You may not receive any Contingent Coupons with respect to your notes. -- We will not necessarily make periodic interest payments on the
notes. If the closing level of the Reference Asset on an Observation Date is less than its Coupon Barrier Level, we will not pay you the
Contingent Coupon applicable to that Observation Date. If the closing level of the Reference Asset is less than its Coupon Barrier Level on each
of the Observation Dates, we will not pay you any Contingent Coupons during the term of the notes, and you will not receive a positive return on
the notes. Generally, this non-payment of any Contingent Coupons will coincide with a greater risk of principal loss on your notes.
·
Your notes are subject to automatic early redemption. -- We will redeem the notes if the closing level of the Reference Asset on any
Observation Date is greater than its Call Level. Following an automatic redemption, you will not receive any additional Contingent Coupons and
may not be able to reinvest your proceeds in an investment with returns that are comparable to the notes. Furthermore, to the extent you are able
to reinvest such proceeds in an investment with a comparable return for a similar level of risk, you may incur transaction costs such as dealer
discounts and hedging costs built into the price of the new notes.
·
Your return on the notes is limited to the Contingent Coupons, if any, regardless of any appreciation in the value of any Reference Asset.
-- You will not receive a payment at maturity with a value greater than your principal amount plus the final Contingent Coupon, if payable. In
addition, if the notes are automatically redeemed, you will not receive a payment greater than the principal amount plus the applicable
Contingent Coupon, even if the Final Level exceeds the Call Level by a substantial amount. Accordingly, your maximum return on the applicable
notes is limited to the potential return represented by the Contingent Coupons.
·
Any decline in the closing level of the Reference Asset from the Valuation Date to the Maturity Date will reduce the value of the Physical
Delivery Amount. -- If we deliver the Physical Delivery Amount on the Maturity Date instead of paying the Cash Delivery Amount, the
number of shares deliverable will be determined on the Valuation Date. The market value of the Physical Delivery Amount on the Maturity Date
may be less than the cash equivalent of such shares determined on the Valuation Date due to any decline in the closing level of the Reference
Asset during the period between the Valuation Date and the Maturity Date. Conversely, if we pay the Cash Delivery Amount instead of
delivering the Physical Delivery Amount on the Maturity Date, the Cash Delivery Amount will be determined on the Valuation Date and the
payment that you receive on the Maturity Date may be less than the market value of such shares that you would have received had we instead
delivered such shares due to fluctuations in their market value during the period between the Valuation Date and the Maturity Date.
·
Your return on the notes may be lower than the return on a conventional debt security of comparable maturity. -- The return that you
will receive on your notes, which could be negative, may be less than the return you could earn on other investments. The notes do not provide
for fixed interest payments and you may not receive any Contingent Coupons over the term of the notes. Even if you do receive one or more
Contingent Coupons and your return on the notes is positive, your return may be less than the return you would earn if you bought a conventional
senior interest bearing debt security of ours with the same maturity or if you invested directly in the Reference Asset. Your investment may not
reflect the full opportunity cost to you when you take into account factors that affect the time value of money.
·
A higher Contingent Interest Rate or lower Trigger Level or Coupon Barrier Level may reflect greater expected volatility of the
Reference Asset, and greater expected volatility generally indicates an increased risk of loss at maturity. -- The economic terms for the
notes, including the Contingent Interest Rate, Coupon Barrier Level and Trigger Level, are based, in part, on the expected volatility of the
Reference Asset at the time the terms of the notes are set. "Volatility" refers to the frequency and magnitude of changes in the level of the
Reference Asset. The greater the expected volatility of the Reference Asset as of the Pricing Date, the greater the expectation is as of that date
that the closing level of the Reference Asset could be less than its Coupon Barrier Level on any Observation Date and that a Trigger Event could
occur and, as a consequence, indicates an increased risk of not receiving a Contingent Coupon and an increased risk of loss, respectively. All
things being equal, this greater expected volatility will generally be reflected in a higher Contingent Interest Rate than the yield payable on our
conventional debt securities with a similar maturity or on otherwise comparable securities, and/or lower Trigger Level and/or Coupon Barrier
Level than those terms on otherwise comparable securities. Therefore, a relatively higher Contingent Interest Rate may indicate an increased risk
of loss. Further, a relatively lower Trigger Level and/or Coupon Barrier may not necessarily indicate that the notes have a greater likelihood of a
return of principal at maturity and/or paying Contingent Coupons. You should be willing to accept the downside market risk of the Reference
Asset and the potential to lose a significant portion or all of your initial investment.
·
Your investment is subject to the credit risk of Bank of Montreal. -- Our credit ratings and credit spreads may adversely affect the market
value of the notes. Investors are dependent on our ability to pay any amounts due on the notes, and therefore investors are subject to our credit
risk and to changes in the market's view of our creditworthiness. Any decline in our credit ratings or increase in the credit spreads charged by the
market for taking our credit risk is likely to adversely affect the value of the notes.
·
Potential conflicts. -- We and our affiliates play a variety of roles in connection with the issuance of the notes, including acting as calculation
agent. In performing these duties, the economic interests of the calculation agent and other affiliates of ours are potentially adverse to your
interests as an investor in the notes. We or one or more of our affiliates may also engage in trading of shares of the Reference Asset on a regular
basis as part of our general broker-dealer and other businesses, for proprietary accounts, for other accounts under management or to facilitate
transactions for our customers. Any of these activities could adversely affect the level of the Reference Asset and, therefore, the market value of,
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and the payments on, the notes. We or one or more of our affiliates may also issue or underwrite other securities or financial or derivative
instruments with returns linked or related to changes in the performance of the Reference Asset. By introducing competing products into the
marketplace in this manner, we or one or more of our affiliates could adversely affect the market value of the notes.
·
Our initial estimated value of the notes is lower than the price to public. -- Our initial estimated value of the notes is only an estimate, and is
based on a number of factors. The price to public of the notes exceeds our initial estimated value, because costs associated with offering,
structuring and hedging the notes are included in the price to public, but are not included in the estimated value. These costs include any
underwriting discount and selling concessions, the profits that we and our affiliates expect to realize for assuming the risks in hedging our
obligations under the notes and the estimated cost of hedging these obligations.

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·
Our initial estimated value does not represent any future value of the notes, and may also differ from the estimated value of any other
party. -- Our initial estimated value of the notes as of the date hereof is derived using our internal pricing models. This value is based on market
conditions and other relevant factors, which include volatility of the Reference Asset, dividend rates and interest rates. Different pricing models
and assumptions could provide values for the notes that are greater than or less than our initial estimated value. In addition, market conditions
and other relevant factors after the Pricing Date are expected to change, possibly rapidly, and our assumptions may prove to be incorrect. After
the Pricing Date, the value of the notes could change dramatically due to changes in market conditions, our creditworthiness, and the other
factors set forth herein and in the product supplement. These changes are likely to impact the price, if any, at which we or BMOCM would be
willing to purchase the notes from you in any secondary market transactions. Our initial estimated value does not represent a minimum price at
which we or our affiliates would be willing to buy your notes in any secondary market at any time.
·
The terms of the notes were not determined by reference to the credit spreads for our conventional fixed-rate debt. -- To determine the
terms of the notes, we used an internal funding rate that represents a discount from the credit spreads for our conventional fixed-rate debt. As a
result, the terms of the notes are less favorable to you than if we had used a higher funding rate.
·
Certain costs are likely to adversely affect the value of the notes. -- Absent any changes in market conditions, any secondary market prices of
the notes will likely be lower than the price to public. This is because any secondary market prices will likely take into account our then-current
market credit spreads, and because any secondary market prices are likely to exclude all or a portion of any underwriting discount and selling
concessions, and the hedging profits and estimated hedging costs that are included in the price to public of the notes and that may be reflected on
your account statements. In addition, any such price is also likely to reflect a discount to account for costs associated with establishing or
unwinding any related hedge transaction, such as dealer discounts, mark-ups and other transaction costs. As a result, the price, if any, at which
BMOCM or any other party may be willing to purchase the notes from you in secondary market transactions, if at all, will likely be lower than
the price to public. Any sale that you make prior to the Maturity Date could result in a substantial loss to you.
·
Owning the notes is not the same as owning shares of the Reference Asset or a security directly linked to the Reference Asset. -- The
return on your notes will not reflect the return you would realize if you actually owned shares of the Reference Asset or a security directly linked
to the performance of the Reference Asset and held that investment for a similar period. Your notes may trade quite differently from the
Reference Asset. Changes in the level of the Reference Asset may not result in comparable changes in the market value of your notes. Even if the
level of the Reference Asset increases during the term of the notes, the market value of the notes prior to maturity may not increase to the same
extent. It is also possible for the market value of the notes to decrease while the level of the Reference Asset increases. In addition, any dividends
or other distributions paid on the Reference Asset will not be reflected in the amount payable on the notes.
·
You will not have any shareholder rights and will have no right to receive any shares of the Reference Asset -- Unless and until we choose
to deliver shares of the Reference Asset at maturity, neither you nor any other holder or owner of the notes will have any voting rights, any right
to receive dividends or other distributions, or any other rights with respect to the Reference Asset.
·
No delivery of shares of the Reference Asset. -- We may chose, in our sole discretion, whether to deliver the Physical Delivery Amount or pay
the Cash Delivery Amount at maturity. You should not invest in the notes if you wish to elect whether to receive cash or shares at maturity.
·
Single equity risk. -- The level of the Reference Asset can rise or fall sharply due to factors specific to the Reference Asset and the issuer of the
Reference Asset (the "Reference Asset Issuer"), such as stock price volatility, earnings, financial conditions, corporate, industry and regulatory
developments, management changes and decisions and other events, as well as general market factors, such as general stock market volatility and
levels, interest rates and economic and political conditions. We urge you to review financial and other information filed periodically with the
SEC by the Reference Asset Issuer. We are not affiliated with the Reference Asset Issuer and are not responsible for the Reference Asset Issuer's
public disclosure of information, whether contained in SEC filings or otherwise. We have not undertaken any independent review or due
diligence of the SEC filings of the Reference Asset Issuer or of any other publicly available information regarding the Reference Asset Issuer.
·
Lack of liquidity. -- The notes will not be listed on any securities exchange. BMOCM may offer to purchase the notes in the secondary market,
but is not required to do so. Even if there is a secondary market, it may not provide enough liquidity to allow you to trade or sell the notes easily.
Because other dealers are not likely to make a secondary market for the notes, the price at which you may be able to trade the notes is likely to
depend on the price, if any, at which BMOCM is willing to buy the notes.
·
Hedging and trading activities. -- We or any of our affiliates have carried out or may carry out hedging activities related to the notes, including
purchasing or selling shares of the Reference Asset, futures or options relating to the Reference Asset or other derivative instruments with return
liked or related to changes in the performance on the Reference Asset. We or our affiliates may also trade in the Reference Asset or instruments
related to the Reference Asset from time to time. Any of these hedging or trading activities on or prior to the Pricing Date and during the term of
the notes could adversely affect the payments on the notes.
·
Many economic and market factors will influence the value of the notes. -- In addition to the level of the Reference Asset and interest rates
on any trading day, the value of the notes will be affected by a number of economic and market factors that may either offset or magnify each
other, and which are described in more detail in the product supplement.
·
You must rely on your own evaluation of the merits of an investment linked to the Reference Asset. -- In the ordinary course of their
businesses, our affiliates from time to time may express views on expected movements in the level of the Reference Asset. One or more of our
affiliates have published, and in the future may publish, research reports that express views on the Reference Asset. However, these views are
subject to change from time to time. Moreover, other professionals who deal in the markets relating to the Reference Asset at any time may have
significantly different views from those of our affiliates. You are encouraged to derive information concerning the Reference Asset from multiple
sources, and you should not rely on the views expressed by our affiliates.
Neither the offering of the notes nor any views which our affiliates from time to time may express in the ordinary course of their businesses
constitutes a recommendation as to the merits of an investment in the notes.

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·
Significant aspects of the tax treatment of the notes are uncertain. -- The tax treatment of the notes is uncertain. We do not plan to request a
ruling from the Internal Revenue Service or from any Canadian authorities regarding the tax treatment of the notes, and the Internal Revenue
Service or a court may not agree with the tax treatment described herein.
The Internal Revenue Service has released a notice that may affect the taxation of holders of "prepaid forward contracts" and similar instruments.
According to the notice, the Internal Revenue Service and the U.S. Treasury are actively considering whether the holder of such instruments
should be required to accrue ordinary income on a current basis. While it is not clear whether the notes would be viewed as similar to such
instruments, it is possible that any future guidance could materially and adversely affect the tax consequences of an investment in the notes,
possibly with retroactive effect.
Please read carefully the section entitled "U.S. Federal Tax Information" herein, the section entitled "Supplemental Tax Considerations
Supplemental U.S. Federal Income Tax Considerations" in the accompanying product supplement, the section entitled "United States Federal
Income Taxation" in the accompanying prospectus and the section entitled "Certain Income Tax Consequences" in the accompanying prospectus
supplement. You should consult your tax advisor about your own tax situation.

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