Bank of Montreal -- Moody's assigns Baa1 (hyb) to Bank of Montreal's non-viability contingent capital (NVCC) Subordinated Debt

Toronto, September 12, 2014 -- Moody's Investors Service, ("Moody's") assigned a rating of Baa1 (hyb) to Bank of Montreal's (BMO, Aa3 Negative, C+/a2 Stable) CAD1 billion Basel III compliant NVCC subordinated debt. Proceeds from the issuance will be added to the bank's general funds. The NVCC subordinated debt provides loss absorption as it is subject to automatic conversion into common shares, based on a predetermined conversion formula, at the point of non-viability, as defined by the Office of the Superintendent of Financial Institutions Canada (OSFI), subject to regulatory discretion. This incremental loss absorption feature is credit positive for holders of senior securities of BMO, as a layer of loss absorbing securities will reduce the risk of losses incurred higher in the capital hierarchy if the bank gets into financial distress.

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