Bank Of Montreal Plans C$1 Billion Share Offer
Bank of Montreal (BMO) followed in the steps of other Canadian chartered banks -Royal Bank of Canada (RY), Toronto-Dominion Bank (TD) and Bank of Nova Scotia (BNS) - Monday with the planned issue of 33,340,000 shares at C$30 each to raise a total of C$1 billion (US$812 million).
The bank said its Tier 1 capital ratio would be "further strengthened by this offering," which should improve the bank's Tier 1 ratio to about 10.4% on a pro-forma basis from 9.77% at Oct. 31.
Analysts have said that Canadian banks are coming under pressure to raise the amount of capital they hold as the weak economic outlook raises fears of further credit losses.
Royal Bank sold C$2 billion in stock to raise its capital ratio to 10.1% from 9%, while Toronto-Dominion sold C$1.4 billion in stock to raise its ratio to 9% from 8.3%, and Scotia issued C$500 million to Sun Life Financial (SLF) to finance its buy of asset manager CI Financial (CIX.UN.T) and preserve its capital ratio of 9.3%. Canadian Imperial Bank of Commerce (CM) raised C$2.9 billion earlier this year because of its huge losses on U.S. structured credit. Its Tier 1 ratio is now 10.5%.
Bank of Montreal has offered the underwriters, led by BMO Capital Markets, an over-allotment option to purchase up to a further 3,334,000 common shares at the same price.
The offering is expected to close Dec. 24. The net proceeds from the offering will be used for general corporate purposes.
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Publié le 15 Décembre 2008 Copyright © 2008 Dowjones
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