BMO Investor Solutions Group | Principal Protected Solutions $US Dollar 0%-6.75% Annual Interest Payments 100% Principal Protected if held to Maturity Bank of Montreal USD Advantage Y.I.E.L.D.® Five Year Protected Deposit Notes, Series 3 For further information, please contact your Investment Advisor Term to Maturity 5 years Annual Income Potential Annual interest ranging from 0.0% to 6.75% based on the price performance of a portfolio of securities of 10 U.S. issuers. The Annual Interest is determined at the end of each year on the valuation date and is equal to the average price return of the portfolio, measured from the date of issuance, with any positive performance of each security is deemed to be 6.75% for the purpose of the Interest Rate Formula* If the price performance of a security in the Reference Portfolio measured from the date of issuance to the applicable valuation date is zero or negative, the actual price performance of the security, subject to a lower limit of negative 25%, is used for the purpose of the Interest Rate Formula. 100% principal guaranteed by BMO as issuer if held to maturity FundSERV JHN935 Available until June 24, 2011 www.bmosp.com While the securities in the Reference Portfolio had an average dividend or distribution yield of 3.44% and an average market capitalization of $91.50 billion USD as of May 2, 2011, investors in the Deposit Notes must be prepared to waive the aggregate dividend or distribution yield provided by the common shares of the issuers, representing approximately 18.42% over the 5-year term of the Deposit Notes, assuming the average dividend or distribution yield on such common shares remains constant at 3.44% each year and assuming dividends and distributions are reinvested in such common shares. The following provides an industry sector breakdown of the Reference Portfolio as well as information on each security, including the NYSE ticker symbol and the indicated dividend or distribution yield and market capitalization as at May 2, 2011 (Source: Bloomberg). The information in the following table is not intended to be, nor should it be construed to be, an indication as to the future dividend or distribution yield of the securities. The Reference Portfolio will initially consist of the common shares of 10 issuers. The Reference Portfolio will not include any dividends or distributions declared on the securities. INVESTMENT HIGHLIGHTS REFERENCE PORTFOLIO * The amount of annual interest paid is unlikely to mirror the price performance of the securities in the Benchmark Portfolio since the return cannot exceed 10.0% of the Deposit Amount. Source: Bloomberg as of May 2, 2011. REFERENCE PORTFOLIO Issuer NYSE Symbol Indicated Gross Dividend Yield Market Capitalization ($ millions) Altria Group, Inc. MO 5.67% 56,186.51 Barrick Gold Corporation ABX 0.94% 50,951.33 The Coca-Cola Company KO 2.79% 154,774.60 ConAgra Foods, Inc. CAG 3.76% 9,997.39 General Mills, Inc. GIS 2.90% 24,629.68 Intel Corporation INTC 3.13% 127,047.20 McDonald’s Corporation MCD 3.12% 81,700.73 Merck & Co., Inc. MRK 4.23% 110,836.80 Verizon Communications Inc. VZ 5.16% 106,882.60 Wal-Mart Stores, Inc. WMT 2.66% 191,946.10 Basic Materials, 10% Consumer, Cyclical, 20% Technology, 10% Consumer, Non- cyclical, 50% Communications, 10%
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BMO Investor Solutions Group | Principal Protected Solutions
$US Dollar 0%-6.75%Annual Interest Payments
100% Principal Protected if held to Maturity
Bank of Montreal USD Advantage Y.I.E.L.D.®
Five Year Protected Deposit Notes, Series 3
For further information, please contact your Investment Advisor
Term to Maturity5 years
Annual Income PotentialAnnual interest ranging from 0.0% to 6.75% based on the price performance of a portfolio of securities of 10 U.S. issuers. The Annual Interest is determined at the end of each year on thevaluation date and is equal to the average price return of the portfolio, measured from the date of issuance, with any positive performance of each security is deemed to be 6.75% for the purpose of the Interest Rate Formula*If the price performance of a security in the Reference Portfolio measured from the date of issuance to the applicable valuation date is zero or negative, the actual price performance of the security, subject to a lower limit of negative 25%, is used for the purpose of the Interest Rate Formula.
100% principal guaranteed by BMO as issuer if held to maturity
FundSERV
JHN935
Available until June 24, 2011
www.bmosp.com
While the securities in the Reference Portfolio had an average dividend or distribution yield of 3.44% and an average market capitalization of $91.50 billion USD as of May 2, 2011, investors in the Deposit Notes must be prepared to waive the aggregate dividend or distribution yield provided by the common shares of the issuers,representing approximately 18.42% over the 5-year term of the Deposit Notes, assuming the average dividend or distribution yield on such common shares remains constant at 3.44% each year and assuming dividends and distributions are reinvested in such common shares.
The following provides an industry sector breakdown of the Reference Portfolio as well as information on each security, including the NYSE ticker symbol and the indicated dividend or distribution yield and market capitalization as at May 2, 2011 (Source: Bloomberg).
The information in the following table is not intended to be, nor should it be construed to be, an indication as to the future dividend or distribution yield of the securities.
The Reference Portfolio will initially consist of the common shares of 10 issuers.
The Reference Portfolio will not include any dividends or distributions declared on the securities.
INVESTMENT HIGHLIGHTS REFERENCE PORTFOLIO
*
The amount of annual interest paid is unlikely to mirror the price performance of the securities in the Benchmark Portfolio since the return cannot exceed 10.0% of the Deposit Amount.
Source: Bloomberg as of May 2, 2011.
REFERENCE PORTFOLIO
Issuer NYSE Symbol
Indicated Gross
Dividend Yield
Market Capitalization
($ millions)
Altria Group, Inc. MO 5.67% 56,186.51 Barrick
Gold Corporation ABX 0.94% 50,951.33 The Coca-Cola Company KO 2.79% 154,774.60 ConAgra Foods, Inc. CAG 3.76% 9,997.39 General Mills, Inc. GIS 2.90% 24,629.68 Intel Corporation INTC 3.13% 127,047.20 McDonald’s Corporation MCD 3.12% 81,700.73 Merck & Co., Inc. MRK 4.23% 110,836.80 Verizon Communications Inc. VZ 5.16% 106,882.60 Wal-Mart Stores, Inc. WMT 2.66% 191,946.10
BMO Investor Solutions Group | Principal Protected Solutions
Bank of Montreal USD Advantage Y.I.E.L.D.® Five Year Protected Deposit Notes, Series 3
The following examples demonstrate the calculation of interest on each valuation date in accordance with the Interest Rate Formula and are included for illustration purposes only. The examples are based on hypothetical prices and changes in prices of the securities in the Reference Portfolio
from the closing date to applicable valuation dates and are not intended as a forecast of future prices of the securities in the Reference Portfolio or as a forecast of any payments of interest that may be payable during the term of the Deposit Notes. Each of the scenarios refers to a Holder holding a single Deposit Note and assumes
that no Extraordinary Event or Market Disruption Event has occurred.
RETURN EXAMPLES
Positive Example
–
In the example above, for each Deposit Note, an investor would receive annual interest payments of US$6.75, US$3.89, US$5.20, US$4.15 and US$3.60 over the term of the Deposit Note. This represents a cumulative return of 23.59% of the Deposit Amount, and an annually compounded rate of return of approximately 4.77%. In addition, at Maturity, an investor would receive the Deposit Amount of US$100 per Deposit Note. Note that in this example, although the actual returns for certain issuers exceeded 6.75% in several periods, the corresponding effective returns cannot exceed 6.75%.
Negative Example
–
In the example above, for each Deposit Note, an investor would
not receive any annual interest payments. However, at Maturity,
an investor would receive the Deposit Amount of $100 per Deposit
Note.
Source: www.bloomberg.com
Negative Example -
Actual Returns vs. Interest RateActual vs. Effective Return
Altria Group
BarrickGold Coca-Cola
ConagraFoods
General Mills Intel Corp McDonald's Merck & Co Verizon Wal-Mart Average
Interest Paid
Year 1 Actual Return -6.03% -10.00% 18.30% 5.25% -28.00% 20.00% 15.40% -6.00% -20.00% 4.87%
BMO Investor Solutions Group | Principal Protected Solutions
Bank of Montreal USD Advantage Y.I.E.L.D.® Five Year Protected Deposit Notes, Series 3
Portfolio Description
Barrick Gold Corporation: Barrick Gold Corporation is an
international gold company with operating mines and development
projects in the United States, Canada, South America, Australia,
and Africa.
ConAgra Foods: ConAgra Foods, Inc. manufactures and markets
packaged foods for retail consumers, restaurants and institutions. The Company offers a wide range of food products, including meals,
entrees, condiments, sides, snacks, specialty potato products, milled grain ingredients, dehydrated vegetables and seasonings, and blends and flavours.
General Mills Inc: General Mills, Inc. manufactures and markets branded and packaged consumer foods worldwide. The Company also supplies branded and unbranded food products to the foodservice and commercial baking industries.
Intel Corporation: Intel Corporation designs, manufactures, and sells computer components and related products. The Company's major products include microprocessors, chipsets, embedded processors and microcontrollers, flash memory products, graphics products, network and communications products, systems management software,
conferencing products, and digital imaging products.
Coca-Cola : The Coca-Cola Company manufactures, markets, and distributes soft drink concentrates and syrups. The Company also
distributes and markets juice and juice-drink products. Coca-Cola
distributes its products to retailers and wholesalers in the United States and internationally.
McDonald’s Corporation: McDonald's Corporation operates and
franchises fast-food restaurants worldwide. The Company'
s franchised and company operated fast food restaurants offer a
variety of low price fast foods in locations around the world.
Altria Group: Altria Group, Inc. is a holding company. The
Company, through subsidiaries, manufactures and sells cigarettes
and other tobacco products, including cigars and pipe tobacco. Altria holds an interest in a brewery company.
Merck & Co Inc : Merck & Co., Inc. is a global pharmaceutical
company that discovers, develops, manufactures, and markets a broad range of human and animal health products. Merck's products include a treatment for elevated cholesterol, a treatment for male pattern hair loss, a preventive treatment for osteoporosis, a treatment for hypertension, and a treatment for allergic rhinitis.
Verizon Communications : Verizon Communications Inc. is an integrated telecommunications company that provides wire line voice and data services, wireless services, Internet services, and published directory information. The Company also provides network services for the federal government including business phone lines, data
services, telecommunications equipment and payphones.
Wal-Mart Stores Inc: Wal-Mart Stores, Inc. operates discount stores, supercenters, and neighbourhood markets. The Company's discount stores and supercenters offer merchandise such as apparel, house
wares, small appliances, electronics, and hardware. Walmart's
markets offer a full-line supermarket and a limited assortment of general merchandise. The Company operates nationally and
internationally.
BMO Investor Solutions Group | Principal Protected Solutions
Bank of Montreal USD Advantage Y.I.E.L.D.® Five Year Protected Deposit Notes, Series 3
TERMS OF THE OFFERINGIssuer 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 “Aa2”
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 conventional deposit liabilities of the Bank. The Deposit Notes will not constitute 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 US$100 per Deposit Note (the “Deposit Amount”).
Selling Period Until June 24, 2011.
Issue Date On or about June 29, 2011.
Maturity Date/Term The Deposit Notes will mature on June 29, 2016 (“Maturity”
or “Maturity Date”), resulting in a term to maturity of approximately 5 years.
Minimum Purchase US$2,000 (20 Deposit Notes).
Interest Payments Annual interest, if any, on the Deposit Notes will be payable on
or about June 29, 2012, July 2, 2013, June 30, 2014, June 29, 2015 and at maturity. The annual interest amount, if any, will not exceed
6.75% of the Deposit Amount and will be based on a simple average of the effective return of each security in the Reference Portfolio. The effective return of each security in the Reference Portfolio depends on its price performance (adjusted as indicated below) measured from the closing date to the date approximately three business days before the interest payment date. If the price performance of a
security is positive, then the effective return of the security
for the purpose of the Interest Rate Formula is deemed to be 6.75% regardless of the actual price performance of the security. If the price performance of a security is zero or negative, the effective return of the security is its actual price performance, subject to a lower limit of negative 25%, for the purpose of the Interest Rate Formula. If the effective rate of one or more of the securities in the Reference Portfolio is negative, this will offset positive effective returns of other securities in the Reference Portfolio, potentially resulting in no annual interest being payable. While the securities in the Reference Portfolio have an average dividend or distribution yield of 3.44% and an average market capitalization of US$91.50 billion as at May 2, 2011 (Source: Bloomberg), the amount of interest paid will not reflect any dividends or distributions declared on those securities.
Payment at Maturity 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) interest, if any, at the interest rate determined by applying the Interest Rate Formula as described under “Interest Payments”, above.
Fees and Expenses of the Offering
Expenses of this offering of US$2.50 (2.50%) per Deposit Note will be paid out of the proceeds of this offering to BMO Nesbitt Burns Inc. for its services as selling agent. The selling agent will pay all or a portion of this amount to qualified selling members for selling the Deposit Notes.
FundSERV Code JHN 935
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 may not require the Bank 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. Sale of a Deposit Note prior to Maturity may result in a loss even if the performance of the securities in the Reference Portfolio 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 360 days from the Closing Date, determined as a
percentage of the Deposit Amount as follows:
No CDIC The Deposit Notes are not insured under the Canada Deposit Insurance Corporation Act.
If sold within 0-60 days 61-120 days 121-180 days 181-240 days 241-300 days 301-360 days ThereafterEarly Trading Charge 3.50% 3.00% 2.50% 2.00% 1.50% 0.75% Nil
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 interest
on the Deposit Notes is calculated are contained in the related Information Statement 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 interest payable,
if any, on the Deposit Notes on each interest payment date. 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 information not contained in the Information Statement.
“BMO (M-bar roundel symbol)”
and “BMO Capital Markets”
are registered trade-marks of Bank of Montreal. “Nesbitt Burns”
and “Advantage Y.I.E.L.D.”
are registered trade-marks of BMO Nesbitt Burns Corporation Limited used under license.
