BMO Global Structured Products Principal Protected Solutions
Bank of Montreal Diversified Bull & Bear Callable Principal Protected Deposit Notes, Series 5
100% of the positive price Or 15% of the negative price 100% Principal Protected 7 Year Term performance of the Reference performance of the Reference if held to Maturity Portfolio at maturity Portfolio at maturity Investment Highlights Reference Basket Callable Feature: The Reference Portfolio will consist of common shares or units of 10 TSX-listed Canadian large cap issuers. While the securities in Callable at the option of Bank of Montreal at any time prior to the Reference Portfolio had an average dividend or distribution Maturity with interest at annual compounded rate of return of 15% yield of 4.90% and an average market capitalization of $18.14 calculated from the Closing Date to the Call Date. billion as of September 8, 2017, investors in the Deposit Notes must be prepared to waive the aggregate dividend yield provided If not called for redemption, a holder will receive a return at by the securities of the issuers, representing approximately Maturity equal to 100% of any percentage increase or 15% of any 39.76% over the 7-year term of the Deposit Notes, assuming the percentage decrease in the Reference Portfolio Value from the average dividend yield on such securities remains constant at Closing Date to the Final Valuation Date. No Variable Return will 4.90% each year and assuming dividends are reinvested in such be paid if the Reference Portfolio Value has not changed from the securities. The value of the Reference Portfolio will not include Closing Date to the Final Valuation Date. any dividends or distributions declared on the securities in the Reference Portfolio. Fundserv: JHN2103
Available until October 13, 2017 www.bmosp.com
Market Capitalization Company TSX Symbol Dividend or Distribution Yield (CAD$ millions) BCE Inc. BCE 4.75% $53,075 Cineplex Inc. CGX 4.22% $2,451 Corus Entertainment Inc. CJR.B 8.22% $2,829 Emera Incorporated EMA 4.43% $10,013 Fortis Inc. FTS 3.49% $18,893 Intact Financial Corporation IFC 2.42% $13,636 Inter Pipeline Ltd. IPL 6.96% $8,583 Rogers Communications Inc. RCI.B 2.99% $33,181 Shaw Communications Inc. SJR.B 6.79% $13,721 TELUS Corporation T 4.34% $26,426
Source: Bloomberg as of August 21, 2017
? For further information, please contact your Investment Advisor BMO Global Structured Products Principal Protected Solutions
Bank of Montreal Diversified Bull & Bear Callable Principal Protected Deposit Notes, Series 5
Possible Return Scenarios The following examples are included for illustration purposes only. The Security Returns used to illustrate the four different scenarios are hypothetical and are not estimates or forecasts of expected changes in the Closing Prices of the Securities from the Closing Date to and including the Final Valuation Date. Each of the scenarios refers to a Holder holding a single Deposit Note and assumes that no Extraordinary Event, Market Disruption Event, Potential Adjustment Event or Substitution Event has occurred. Scenario 1: Exercise of the BMO Call Right
Issuer Initial Closing Price Final Closing Price Return per Security BCE Inc. $59.39 $94.72 59.49% Cineplex Inc. $42.45 $74.64 75.83% Corus Entertainment Inc. $64.90 $125.04 92.66% Emera Incorporated $13.95 $24.43 75.16% Fortis Inc. $47.62 $85.91 80.41% Intact Financial Corporation $22.95 $27.82 21.20% Inter Pipeline Ltd. $99.43 $156.07 56.97% Rogers Communications Inc. $45.93 $73.36 59.72% Shaw Communications Inc. $27.98 $38.41 37.26% TELUS Corporation $44.99 $108.57 141.31% Reference Portfolio Return 70.00% Redemption Coupon Called at the discretion of Bank of Montreal at the end of Year 3 = $52.09 Total Payment on Call Date = Deposit Amount + Redemption Coupon = $100.00 + $52.09 = $152.09
In this example, the Deposit Notes are called for redemption by Bank of Montreal on a hypothetical Call Date of September 20, 2020 and the Holder receives the Deposit Amount plus the Redemption Coupon of $52.09, representing a 15% annual compounded rate of return calculated from the Closing Date to the Call Date. In this event, the Holder will not receive any return based on the price performance of the Securities, which may have appreciated by more than 52.09% from the Closing Date to the Call Date.
BMO Global Structured Products Principal Protected Solutions
Bank of Montreal Diversified Bull & Bear Callable Principal Protected Deposit Notes, Series 5
Scenario 2: Positive Reference Portfolio Return Example
Issuer Initial Closing Price Final Closing Price Return per Security BCE Inc. $59.39 $94.72 59.49% Cineplex Inc. $42.45 $61.04 43.79% Corus Entertainment Inc. $64.90 $125.04 92.66% Emera Incorporated $13.95 $24.45 75.26% Fortis Inc. $47.62 $30.42 -36.11% Intact Financial Corporation $22.95 $27.92 21.65% Inter Pipeline Ltd. $99.43 $136.19 36.97% Rogers Communications Inc. $45.93 $73.36 59.72% Shaw Communications Inc. $27.98 $37.85 35.26% TELUS Corporation $44.99 $63.58 41.31% Reference Portfolio Return 43.00% Variable Return per Deposit Note = Deposit Amount Reference Portfolio Return 100% = $100.00 43.00% 100% = $43.00 Total Payment at Maturity = Deposit Amount + Variable Return per Deposit Note = $100.00 + $43.00 = $143.00 In this example, the Deposit Notes are not called for redemption by Bank of Montreal, the Reference Portfolio has positive price performance at Maturity (compared to the Initial Reference Portfolio Value) and the Holder receives the Deposit Amount at Maturity plus the Variable Return. In this example, the Initial Reference Portfolio Value is $100 and the Final Reference Portfolio Value is $143. Therefore, the Holder will receive a Variable Return of $43.00 at Maturity, being $100 × ($143 − $100) ÷ $100, which is equal to a 5.24% annual compounded rate of return. Scenario 3: Negative Reference Portfolio Return
Issuer Initial Closing Price Final Closing Price Return per Security BCE Inc. $59.39 $45.26 -23.80% Cineplex Inc. $42.45 $32.30 -23.91% Corus Entertainment Inc. $64.90 $38.25 -41.07% Emera Incorporated $13.95 $9.75 -30.10% Fortis Inc. $47.62 $27.07 -43.14% Intact Financial Corporation $22.95 $16.23 -29.26% Inter Pipeline Ltd. $99.43 $67.44 -32.17% Rogers Communications Inc. $45.93 $34.96 -23.89% Shaw Communications Inc. $27.98 $22.35 -20.11% TELUS Corporation $44.99 $30.36 -32.52%
Reference Portfolio Return -30.00% Variable Return per Deposit Note = Deposit Amount Absolute (Positive) Value of the Reference Portfolio Return 15% = $100.00 30.00% 15% = $4.50 Total Payment at Maturity = Deposit Amount + Variable Return per Deposit Note = $100.00 + $4.50 = $104.50 In this example, the Deposit Notes are not called for redemption by Bank of Montreal, the Reference Portfolio has negative price performance at Maturity (compared to the Initial Reference Portfolio Value) and the Holder receives the Deposit Amount at Maturity plus the Variable Return. In this example, the Initial Reference Portfolio Value is $100 and the Final Reference Portfolio Value is $70. Therefore, the percentage decrease in the Portfolio Return is 30% and the Variable Return per Deposit Note is $4.50 ($100 multiplied by 15% of the absolute (positive) value of the percentage decrease). This is equivalent to a 0.63% annual compounded rate of return. BMO Global Structured Products Principal Protected Solutions
Bank of Montreal Diversified Bull & Bear Callable Principal Protected Deposit Notes, Series 5
Scenario 4: No Variable Return
Issuer Initial Closing Price Final Closing Price Return per Security BCE Inc. $59.39 $59.39 0.00% Cineplex Inc. $42.45 $42.45 0.00% Corus Entertainment Inc. $64.90 $64.90 0.00% Emera Incorporated $13.95 $13.95 0.00% Fortis Inc. $47.62 $47.62 0.00% Intact Financial Corporation $22.95 $22.95 0.00% Inter Pipeline Ltd. $99.43 $99.43 0.00% Rogers Communications Inc. $45.93 $45.93 0.00% Shaw Communications Inc. $27.98 $27.98 0.00% TELUS Corporation $44.99 $44.99 0.00% Reference Portfolio Return 0.00% Variable Return per Deposit Note = Deposit Amount Reference Portfolio Return 100% = $100.00 0.00% 100% = $0.00 Total Payment at Maturity = Deposit Amount + Variable Return per Deposit Note = $100.00 + $0.00 = $100.00 In this example, the Deposit Notes are not called for redemption by Bank of Montreal, the Reference Portfolio Value has not changed at Maturity (compared to the Initial Reference Portfolio Value) and the Holder receives only the Deposit Amount at Maturity. In this example, the Initial Reference Portfolio Value is $100 and the Final Reference Portfolio Value is $100. Therefore, the Reference Portfolio Value neither increases nor decreases and the Variable Return per Deposit Note is zero. BMO Global Structured Products Principal Protected Solutions
Bank of Montreal Diversified Bull & Bear Callable Principal Protected Deposit Notes, Series 5
Terms Of The Offering This is only a summary of the Offering and should be read in conjunction with the Information Statement dated Issuer Bank of Montreal (the “Bank”). Rating As of the date of the Information Statement, the deposit liabilities of the Bank with a term to maturity of more than one year are rated “AA” by DBRS, “A+” by Standard & Poor’s and “A1” by Moody’s. The Deposit Notes have not been rated and there is no assurance that, if the Deposit Notes were specifically rated by such rating agencies, they would have the same rating as the other deposit liabilities of the Bank. The Deposit Notes will not be deposits insured under the Canada Deposit Insurance Corporation 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.
Issue Price $100 per Deposit Note (the “Deposit Amount”).
Selling Period Until October 13, 2017.
Issue Date On or about October 18, 2017. Maturity Date/Term Unless the Bank exercises its right to call the Deposit Notes for redemption, the Deposit Notes will mature on October 18, 2024 (“Maturity” or the “Maturity Date”), resulting in a term to Maturity of approximately 7 years. Minimum Purchase $2,000 (20 Deposit Notes). Reference Portfolio The price performance of the Reference Portfolio will determine the amount of Variable Return, if any, Holders will receive at Maturity. The Reference Basket will notionally consist of the common shares and units, as applicable, of the 10 Canadian TSX-listed issuers.
BCE Inc. Cineplex Inc Corus Entertainment Inc. Emera Incorporated Fortis Inc. Intact Financial Inter Pipeline Ltd. Rogers Communications Inc. Shaw Communications Inc. TELUS Corporation Corporation
Payment at Maturity Subject to the Bank’s right to call the Deposit Notes for redemption at any time prior to Maturity and subject to the occurrence of certain special circumstances, for each Deposit Note a Holder holds at Maturity, the Holder will receive (i) the Deposit Amount, and (ii) a Variable Return, if any. The Variable Return is based on the price performance of the Securities from the Closing Date to the Final Valuation Date and will not reflect any distributions or dividends declared on the Securities during that time. More specifically, on the Final Valuation Date, BMO Capital Markets measures the value of a notional $100 investment allocated equally among the Securities and made on the Closing Date. This value, which is based on the Closing Prices of the Securities, will fluctuate after the Closing Date based on changes to the Closing Prices. The Variable Return for each Deposit Note, if any, is $100 multiplied by (i) 100% of the Reference Portfolio Return, if the Reference Portfolio Return is positive, (ii) 15% of the absolute (positive) value of the Reference Portfolio Return, if the Reference Portfolio Return is negative, or (iii) zero if the Reference Portfolio Return is zero. Holders cannot elect to receive any payments prior to Maturity.
Fees and Expenses of $3.00 (3.00% of the Subscription Price) per Deposit Note will be paid out of the proceeds of this Offering to BMO Nesbitt Burns Inc. for its services as the Offering selling agent. The selling agent will pay all or a portion of this fee to sub-agency groups including other qualified selling members for selling the Deposit Notes.
Fundserv Code JHN2103 Secondary Market The Deposit Notes will not be listed on any stock exchange. Moreover, the Bank does not have the right to redeem the Deposit Notes prior to Maturity and a Holder does not have the right to redeem the Deposit Notes prior to Maturity. However, BMO Capital Markets will use reasonable efforts, subject to normal market conditions, to arrange for a secondary market for the sale of Deposit Notes but reserves the right not to do so in the future, without providing prior notice to Holders. Secondary market “redemption” orders and settlements can be made using the Fundserv network. Changes in laws and regulations may impact the procedures and timing relating to selling Deposit Notes on the secondary market. Sale of a Deposit Note prior to Maturity may result in a loss even if the price performance of the Reference Components has been positive. Early Trading Charge An Early Trading Charge will apply to secondary market redemption orders for Deposit Notes placed using the Fundserv network within the first 720 days from the Closing Date, determined as a percentage of the Deposit Amount as follows: 181-270 271-360 361-450 451-540 If sold within 0-90 days 91-180 days 541-630 days 631-720 days Thereafter days days days days Early Trading Charge 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% Nil
No CDIC The Deposit Notes are not insured under the Canada Deposit Insurance Corporation 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 institution. September 18 The Deposit Notes are issued by and constitute direct, unconditional obligations of Bank of Montreal. This summary is issued for discussion purposes only to provide an overview of the proposed Deposit Notes and does not constitute investment advice or an offer to sell or a solicitation to purchase. Details of certain risks of investing in the Deposit Notes, as well as complete disclosure of how the Variable Return on the Deposit Notes is calculated, are contained in the related Information Statement dated September 18, 2017, which will be available through your financial advisor or at www.bmosp.com. You should read the Information Statement carefully before investing and discuss all the key features of the Deposit Notes, including their suitability for you, with your financial advisor. The Deposit Notes may not be suitable for all types of investors. The prices and value of the Deposit Notes may fluctuate and/or be adversely affected by a number of factors. The fluctuation of the performance of the underlying securities will directly impact the Variable Return, if any, on the Deposit Notes at Maturity. The Deposit Notes will not be listed on any stock exchange. You do not have the right to require Bank of Montreal to redeem the Deposit Notes prior to maturity. Bank of Montreal makes no recommendations concerning equity investments as asset classes or the suitability of investing in securities generally or Deposit Notes in particular. No person has been authorized to give any information or to make any representation not contained in the Information Statement relating to the Deposit Notes and Bank of Montreal does not accept any responsibility for any , 2017. information not contained in the Information Statement.
“BMO (M-bar roundel symbol)”, “BMO” and “BMO Capital Markets” are registered trade-marks of Bank of Montreal.