An anonymous director reports
BANK OF MONTREAL ANNOUNCES THE REVERSE SPLIT OF TWO SERIES OF ETNS
Bank of Montreal will implement a one-for-10 reverse split of two series of its outstanding exchange-traded notes (the ETNs), expected to be effective as of March 29, 2021.
The attached ETNs subject to reverse split table indicates the ETNs that will be subject to the reverse split, their trading symbol, their current Cusip numbers and the Cusip numbers that they will receive after giving effect to the reverse split.
ETNS SUBJECT TO REVERSE SPLIT
ETNs Ticker Current Cusip/new Cusip
MicroSectors U.S. Big Banks Index -3X Inverse Leveraged ETNs due March 25, 2039 BNKD 063679781/063679625
MicroSectors U.S. Big Oil Index -3X Inverse Leveraged ETNs due March 25, 2039 NRGD 063679724/063679633
The reverse split will be effective at the open of trading on March 29, 2021. Each ETN will begin trading on the NYSE Arca on a reverse split-adjusted basis on that day. Holders of an ETN who purchased that ETN prior to March 29, 2021, will receive one reverse split-adjusted ETN for every 10 prereverse split ETNs.
In addition, investors who hold a number of ETNs that are not evenly divisible by 10 will receive a cash payment for any fractional ETNs remaining. The cash amount due on any partials will be determined on April 5, 2021, and will equal, for each remaining ETN, its closing indicative value on that date. Bank of Montreal will pay these amounts on or about April 8, 2021.
The closing indicative value of each ETN on March 26, 2021, will be multiplied by 10 to determine the reverse split-adjusted closing indicative value. Following the reverse split, each ETN will have a new Cusip, as set forth herein, but will continue to trade under its current ticker symbol.
The reverse split will affect the trading denominations of each series of the ETNs, but it will not have any effect on the aggregate principal amount of the ETNs, except that the aggregate principal amount will be reduced by the corresponding aggregate amount of any cash payments for the partials.
Illustration of a reverse split
The attached illustration of reverse split table shows the effect of a one-for-10 reverse split on the hypothetical closing indicative value of the ETNs. The closing indicative value of an ETN is not the same as its principal amount (currently $50) or the trading price of that ETN.
ILLUSTRATION OF REVERSE SPLIT
Number of ETNs Hypothetical closing indicative value Aggregate closing indicative value
Prereverse split 100,000 $10.00 $1,000,000
One-for-10 postreverse split 10,000 $100.00 $1,000,000
None of the other exchange-traded notes issued by Bank of Montreal are affected by this announcement.
The ETNs are senior, unsecured obligations of Bank of Montreal.
Investment suitability must be determined individually for each investor, and the ETNs may not be suitable for all investors. This information is not intended to provide and should not be relied upon as providing accounting, legal, regulatory or tax advice.
Investors should consult with their own financial advisers as to these matters. In addition, please see the pricing supplement relating to the applicable ETNs for important information about Solactive AG, the licensor of the indices to which the ETNs are linked.
The leveraged ETNs discussed in this press release are intended to be daily trading tools for sophisticated investors to manage daily trading risks as part of an overall diversified portfolio. They are designed to achieve their stated investment objectives on a daily basis. The returns on the ETNs over longer periods of time can, and most likely will, differ significantly from the return on a direct short investment in the index underlying those ETNs.
Bank of Montreal, the issuer of the ETNs, has filed a registration statement (including a pricing supplement, prospectus supplement and prospectus) with the Securities and Exchange Commission regarding each of the ETNs discussed in this press release. Please read those documents and the other documents relating to the ETNs that Bank of Montreal has filed with the SEC for more complete information about Bank of Montreal and the ETNs. These documents may be obtained without cost by visiting EDGAR on the SEC website. Alternatively, Bank of Montreal and any agent or dealer that participated in the offerings of the ETNs will arrange to send the applicable pricing supplement, the prospectus supplement and the prospectus if so requested by calling toll-free at 1-877-369-5412.
About Bank of Montreal
Serving customers for 200 years and counting, BMO is a highly diversified financial service provider -- the eighth largest bank, by assets, in North America. With total assets of $973-billion as of Jan. 31, 2021, 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 more than 12 million customers, and conducts business through three operating groups: personal and commercial banking, BMO wealth management and BMO capital markets.
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