New Issue: BMO prices $48.26 million notes linked to Raymond James quality yield stock basket

By Angela McDaniels

Tacoma, Wash., Sept. 27 – Bank of Montreal priced $48.26 million of notes due Sept. 28, 2018 linked to a basket of 22 equally weighted stocks selected in September by Raymond James & Associates, Inc., according to a 424B2 filing with the Securities and Exchange Commission.

The underlying stocks are AbbVie Inc., AT&T Inc., Boeing Co., BB&T Corp., Carnival Corp., Coca-Cola Co., Chevron Corp., Cisco Systems, Inc., Cummins Inc., General Electric Co., JPMorgan Chase & Co., PepsiCo, Inc., Phillips 66, Pfizer Inc., Procter & Gamble Co., Qualcomm, Inc., 5Simon Property Group, Inc., Target Corp., United Parcel Service, Inc., Verizon Communications Inc., WEC Energy Group, Inc. and Xcel Energy, Inc.

Raymond James’ objective was to select securities included in the S&P 500 index that have dividend yields higher than the index constituents as a whole, could sustain or increase their dividend and had credit ratings considered lower medium grade or higher. Raymond James also sought to produce a basket that, based on historical experience, would be likely to suffer less price volatility than the S&P 500 components as a whole.

The notes may pay a variable coupon. Interest, if any, is payable quarterly and will equal the sum of the dividend amounts for each of the reference shares multiplied by 96.75%.

For each reference share, the dividend amount is an amount in dollars equal to (a) $1,000 divided by the applicable adjusted initial share price multiplied by (b) the applicable reference share weighting multiplied by (c) 100% of the gross cash distributions per reference share declared by the applicable reference share issuer where the date that the applicable reference share has begun trading ex-dividend occurs during the relevant interest calculation period.

For each $1,000 principal amount of notes, the payout at maturity will be $1,000 multiplied by 96.75% multiplied by the basket level percentage. Because of the 96.75% participation rate, investors will receive less than par if the basket level percentage is less than 103.36%.

For each stock, its initial share price is the average of its average intraday prices on Sept. 23, Sept. 26 and Sept. 27.

For each stock, its final share price will be the average of its closing share prices on Sept. 21, 2018, Sept. 24, 2018 and Sept. 25, 2018.

BMO Capital Markets Corp. is the agent. Raymond James is acting as a dealer and will receive a 2% fee.

Issuer:	Bank of Montreal
Issue:	Raymond James quality yield stock basket-linked notes
Underlying stocks:	AbbVie Inc., AT&T Inc., Boeing Co., BB&T Corp., Carnival Corp., Coca-Cola Co., Chevron Corp., Cisco Systems, Inc., Cummins Inc., General Electric Co., JPMorgan Chase & Co., PepsiCo, Inc., Phillips 66, Pfizer Inc., Procter & Gamble Co., Qualcomm, Inc., 5Simon Property Group, Inc., Target Corp., United Parcel Service, Inc., Verizon Communications Inc., WEC Energy Group, Inc. and Xcel Energy, Inc.
Amount:	$48,257,000
Maturity:	Sept. 28, 2018
Coupon:	Sum of dividend amounts for each reference share multiplied by 96.75%, payable quarterly but may be zero
Dividend amount:	(a) $1,000 divided by applicable adjusted initial share price multiplied by (b) applicable reference share weighting multiplied by (c) 100% of gross cash distributions per reference share declared by applicable reference share issuer where date that applicable reference share has begun trading ex-dividend occurs during relevant interest calculation period
Price:	Par
Payout at maturity:	$1,000 multiplied by 96.75% multiplied by basket level percentage
Initial share prices:	For each stock, average of average intraday prices on Sept. 23, Sept. 26 and Sept. 27
Final share prices:	For each stock, average of closing share prices on Sept. 21, 2018, Sept. 24, 2018 and Sept. 25, 2018
Pricing date:	Sept. 23
Settlement date:	Sept. 30
Agent:	BMO Capital Markets Corp.
Fees:	2%
Cusip:	06367TKV1

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