BMO Issues Inaugural Sustainability Bond
TORONTO, Oct. 21, 2019 – BMO Financial Group (TSX:BMO) (NYSE:BMO) today announced the closing of its inaugural U.S. $500-million 3-year Sustainability Bond to support the Bank’s commitment to sustainable finance. Proceeds of the Sustainability Bond will be allocated toward eligible green and social asset categories, including renewable energy, green buildings and infrastructure, pollution prevention and control, sustainable land use, women-owned small and medium businesses, Indigenous communities, and other eligible categories as defined in BMO’s Sustainable Financing Framework.
“With the issuance of our first Sustainability Bond, we are strengthening our Purpose to Boldly Grow the Good, in business and life,” said Steve Lobo, Treasurer, BMO Financial Group. “We are focused on driving positive change, whether through similar bond issuances in the future or the many solutions we are building. We will remain an active participant in capital markets to play our part in achieving the Sustainable Development Goals.”
In September 2019, BMO published the Sustainable Financing Framework that aligns to BMO’s Purpose and its promise to grow the good for a sustainable future, a thriving economy, and an inclusive society.
The Framework defines eligible assets across seven green and four social project categories that link to the United Nations 2030 Agenda for Sustainable Development. Each category contributes to specific Sustainable Development Goals set by the United Nations to solve the sustainability challenges facing the world. In line with market best practice, the Framework is aligned to the ICMA Green Bond Principles and Social Bond Principles and obtained a second party opinion from Sustainalytics.
In June, BMO committed to mobilizing $400 billion by 2025, through the following:
- Advising and management of $250 billion in client investments for sustainable objectives; and
- $150 billion in capital to companies pursuing sustainable outcomes.
In addition, the Bank has announced the creation of an impact investment fund, with $250 million in seed capital, to find and scale solutions to sustainability problems.
Additional information on the current Sustainability Bond issuance
The Sustainability Bonds will bear interest at a fixed rate of 2.050 per cent per annum and will mature on November 1, 2022. The Sustainability Bonds constitute deposit liabilities of BMO Financial Group pursuant to the Bank Act (Canada), are unsubordinated and unsecured obligations of the Bank and rank pari passu with all present or future unsubordinated and unsecured obligations of the Bank without any preference among themselves (except as otherwise prescribed by law and subject to the exercise of the Bank resolution powers).
The Sustainability Bonds are bail-inable notes. Bail-inable notes are subject to conversion in whole or in part—by means of a transaction or series of transactions and in one or more steps—into common shares of the Bank or any of its affiliates under subsection 39.2(2.3) of the Canada Deposit Incorporation Act (CDIC Act) and to variation or extinguishment in consequence, and subject to the application of the laws of the Province of Quebec and the federal laws of Canada applicable therein in respect of the operation of the CDIC Act with respect to the Sustainability Bonds.
The offering was distributed by a syndicate co-led by BMO Capital Markets. The offering closed on October 21, 2019. BMO will report publicly on the use of the BMO Sustainability Bond proceeds within one year of issuance and annually thereafter.
About BMO Financial Group
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider – the 8th largest bank, by assets, in North America. With total assets of $839 billion as of July 31, 2019, 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.
This press release does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire Sustainability Bonds of Bank of Montreal in any jurisdiction, including the United States, or an inducement to enter into investment activity. No part of this press release, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The distribution of this press release and of the information it contains may be subject to legal restrictions in some countries.