BMO Issues Inaugural Sustainability Bond

• Furthers its Growing the Good commitment to enable a sustainable future

TORONTO, Oct. 21, 2019 /CNW/ - 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.

Disclaimer

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.

Caution Regarding Forward-Looking Statements

This press release may contain forward-looking statements. All such statements are made pursuant to the "safe harbor" provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements in this press release may include, but are not limited to, statements with respect to our objectives and priorities for fiscal 2019 and beyond, our strategies or future actions, our targets, and include statements of our management. Forward-looking statements are typically identified by words such as "will", "would", "should", "believe", "expect", "anticipate", "project", "intend", "estimate", "plan", "goal", "target", "may" and "could".

By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, both general and specific in nature. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct, and that actual results may differ materially from such predictions, forecasts, conclusions or projections. These risks include the risk that the businesses and projects funded with the proceeds from the Sustainability Bonds will not meet our Sustainable Financing Framework or an investor's expectations or requirements, whether as to sustainability impact or outcome or otherwise; and the risk that we may not be able to allocate the proceeds of the Sustainability Bonds to finance eligible businesses and projects. We caution readers of this press release not to place undue reliance on our forward-looking statements, as a number of factors – many of which are beyond our control and the effects of which can be difficult to predict – could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.

The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic and market conditions in the countries in which we operate; the Canadian housing market; weak, volatile or illiquid capital and/or credit markets; interest rate and currency value fluctuations; changes in monetary, fiscal, or economic policy and tax legislation and interpretation; the level of competition in the geographic and business areas in which we operate; changes in laws or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, and the effect of such changes on funding costs; judicial or regulatory proceedings; the accuracy and completeness of the information we obtain with respect to our customers and counterparties; failure of third parties to comply with their obligations to us; our ability to execute our strategic plans and to complete and integrate acquisitions, including obtaining regulatory approvals; critical accounting estimates and the effect of changes to accounting standards, rules and interpretations on these estimates; operational and infrastructure risks, including with respect to reliance on third parties; changes to our credit ratings; political conditions, including changes relating to or affecting economic or trade matters; global capital markets activities; the possible effects on our business of war or terrorist activities; outbreaks of disease or illness that affect local, national or international economies; natural disasters and disruptions to public infrastructure, such as transportation, communications, power or water supply; technological changes; information and cyber security, including the threat of hacking, identity theft and corporate espionage, as well as the possibility of denial of service resulting from efforts targeted at causing system failure and service disruption; and our ability to anticipate and effectively manage risks arising from all of the foregoing factors.

We caution that the foregoing list is not exhaustive of all possible factors. Other factors and risks could adversely affect our results. For more information, please see the discussion in the Risks That May Affect Future Results section, and the sections related to credit and counterparty, market, insurance, liquidity and funding, operational, model, legal and regulatory, business, strategic, environmental and social, and reputation risk, in the Enterprise-Wide Risk Management section which begin on page 78 of BMO's 2018 Annual Report, and the Risk Management section of our Third Quarter 2019 Report to Shareholders, all of which outline certain key factors and risks that may affect our future results. Investors and others should carefully consider these factors and risks, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. We do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by the organization or on its behalf, except as required by law.

SOURCE BMO Financial Group

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