[FWP] MicroSectors Energy 3x Leveraged ETNs Free Writing Prospectus
Bank of Montreal (Series K) Digital Return Barrier Notes – key take-aways
The free-writing prospectus covers up to US$[ ] of two-year, senior unsecured notes that settle 05-Aug-2025 and mature 05-Aug-2027. The notes are linked to the worst performer of the S&P 500 Index (SPX) and the Russell 2000 Index (RTY) and pay no coupons.
- Digital payoff: If, on the 02-Aug-2027 valuation date, the least-performing index is ≥70 % of its 31-Jul-2025 initial level, holders receive principal plus a fixed 16 % return.
- Barrier risk: If the least-performing index closes <70 % of its initial level, redemption equals principal + (principal × percentage change), exposing investors to 1:1 downside all the way to a full loss.
- Credit & liquidity: The notes are unsecured obligations of Bank of Montreal, are not CDIC/FDIC-insured and will not be listed. Secondary liquidity depends solely on BMO Capital Markets (BMOCM).
- Pricing economics: Price to public is 100 % with up to 1 % selling concession. The estimated initial value is $975.50 per $1,000 (minimum $925.00), implying an initial value discount of roughly 2.5–7.5 % versus issue price.
- Denominations & identifiers: $1,000 minimum; CUSIP 06376ENZ1.
Risk highlights
- Capped upside at 16 % irrespective of index gains.
- Full principal loss possible if the worst index falls ≥100 %.
- Exposure to small-cap volatility via RTY and to large-cap market moves via SPX.
- Complex tax treatment – issuer assumes prepaid-derivative characterization but IRS could differ.
- Potential conflicts and hedging activity by BMO and affiliates may influence index levels and secondary pricing.
Overall, the structure suits investors willing to trade 30 % downside protection for a capped 16 % two-year return, while accepting issuer credit risk and limited liquidity.
Bank of Montreal (Serie K) Digital Return Barrier Notes – punti chiave
Il prospetto informativo copre fino a US$[ ] di note senior non garantite biennali, con regolamento il 05-ago-2025 e scadenza il 05-ago-2027. Le note sono collegate al peggior rendimento tra l'indice S&P 500 (SPX) e l'indice Russell 2000 (RTY) e non pagano cedole.
- Payoff digitale: Se, alla data di valutazione del 02-ago-2027, l'indice meno performante è ≥70% del suo livello iniziale del 31-lug-2025, i detentori ricevono il capitale più un rendimento fisso del 16%.
- Rischio barriera: Se l'indice meno performante chiude sotto il 70% del livello iniziale, il rimborso corrisponde al capitale più (capitale × variazione percentuale), esponendo gli investitori a un ribasso 1:1 fino alla perdita totale.
- Credito e liquidità: Le note sono obbligazioni non garantite di Bank of Montreal, non sono assicurate da CDIC/FDIC e non saranno quotate. La liquidità secondaria dipende esclusivamente da BMO Capital Markets (BMOCM).
- Economia di prezzo: Prezzo al pubblico al 100% con una commissione di vendita fino all'1%. Il valore iniziale stimato è di $975,50 per $1.000 (minimo $925,00), implicando uno sconto iniziale di circa 2,5–7,5% rispetto al prezzo di emissione.
- Tagli e identificativi: minimo $1.000; CUSIP 06376ENZ1.
Rischi principali
- Rendimento massimo limitato al 16% indipendentemente dai guadagni degli indici.
- Possibilità di perdita totale del capitale se l'indice peggiore scende del 100% o più.
- Esposizione alla volatilità delle small cap tramite RTY e ai movimenti delle large cap tramite SPX.
- Trattamento fiscale complesso – l’emittente assume una caratterizzazione da derivato prepagato, ma l’IRS potrebbe avere un’opinione diversa.
- Possibili conflitti e attività di copertura da parte di BMO e affiliati che possono influenzare i livelli degli indici e il prezzo secondario.
In sintesi, la struttura è adatta a investitori disposti a scambiare una protezione al ribasso del 30% per un rendimento massimo del 16% in due anni, accettando il rischio di credito dell’emittente e una liquidità limitata.
Bank of Montreal (Serie K) Digital Return Barrier Notes – puntos clave
El prospecto cubre hasta US$[ ] de notas senior no garantizadas a dos años, con liquidación el 05-ago-2025 y vencimiento el 05-ago-2027. Las notas están vinculadas al peor desempeño entre el índice S&P 500 (SPX) y el índice Russell 2000 (RTY) y no pagan cupón.
- Pago digital: Si, en la fecha de valoración del 02-ago-2027, el índice con peor desempeño es ≥70% de su nivel inicial al 31-jul-2025, los tenedores reciben el principal más un retorno fijo del 16%.
- Riesgo de barrera: Si el índice con peor desempeño cierra por debajo del 70% de su nivel inicial, el reembolso será el principal más (principal × cambio porcentual), exponiendo a los inversores a una pérdida directa 1:1 hasta la pérdida total.
- Crédito y liquidez: Las notas son obligaciones no garantizadas del Bank of Montreal, no están aseguradas por CDIC/FDIC y no estarán listadas. La liquidez secundaria depende exclusivamente de BMO Capital Markets (BMOCM).
- Economía de precios: Precio al público al 100% con hasta 1% de comisión de venta. El valor inicial estimado es de $975.50 por $1,000 (mínimo $925.00), implicando un descuento inicial de aproximadamente 2.5–7.5% respecto al precio de emisión.
- Denominaciones e identificadores: mínimo $1,000; CUSIP 06376ENZ1.
Aspectos clave de riesgo
- Alza limitada al 16% independientemente de las ganancias de los índices.
- Posible pérdida total del principal si el peor índice cae ≥100%.
- Exposición a la volatilidad de small caps a través de RTY y a movimientos de large caps mediante SPX.
- Tratamiento fiscal complejo – el emisor asume una caracterización de derivado prepagado, pero el IRS podría tener una opinión diferente.
- Potenciales conflictos y actividades de cobertura por parte de BMO y afiliados que pueden influir en los niveles de los índices y en los precios secundarios.
En resumen, la estructura es adecuada para inversores dispuestos a aceptar una protección a la baja del 30% a cambio de un retorno máximo del 16% en dos años, asumiendo el riesgo crediticio del emisor y una liquidez limitada.
뱅크 오브 몬트리올 (시리즈 K) 디지털 리턴 배리어 노트 – 주요 내용
이 무료 작성 설명서는 2년 만기 선순위 무담보 노트 최대 US$[ ]를 다루며, 결제일은 2025년 8월 5일이고 만기일은 2027년 8월 5일입니다. 이 노트는 S&P 500 지수(SPX)와 러셀 2000 지수(RTY) 중 최저 성과 지수에 연동되며 쿠폰은 지급되지 않습니다.
- 디지털 페이오프: 2027년 8월 2일 평가일에 최저 성과 지수가 2025년 7월 31일 초기 수준의 70% 이상이면, 보유자는 원금과 고정 16% 수익을 받습니다.
- 배리어 리스크: 최저 성과 지수가 초기 수준의 70% 미만으로 마감하면 상환금은 원금 + (원금 × 변동률)으로, 투자자는 1:1 손실 위험에 노출되어 원금 전액 손실까지 가능합니다.
- 신용 및 유동성: 이 노트는 뱅크 오브 몬트리올의 무담보 채무이며, CDIC/FDIC 보험 대상이 아니고 상장되지 않습니다. 2차 유동성은 BMO 캐피털 마켓(BMOCM)에 전적으로 의존합니다.
- 가격 경제: 공모가는 100%이며 최대 1% 판매 수수료가 있습니다. 예상 초기 가치는 $1,000당 $975.50 (최소 $925.00)로, 발행가 대비 약 2.5–7.5% 할인된 가치입니다.
- 액면 및 식별번호: 최소 $1,000; CUSIP 06376ENZ1.
주요 위험 사항
- 지수 상승과 관계없이 최대 수익은 16%로 제한됩니다.
- 최저 지수가 100% 이상 하락하면 원금 전액 손실 가능성이 있습니다.
- RTY를 통한 소형주 변동성 및 SPX를 통한 대형주 시장 움직임에 노출됩니다.
- 복잡한 세무 처리 – 발행자는 선지급 파생상품으로 분류하지만 IRS는 다르게 판단할 수 있습니다.
- BMO 및 계열사의 잠재적 이해상충 및 헤지 활동이 지수 수준과 2차 가격에 영향을 미칠 수 있습니다.
전반적으로 이 구조는 30% 하락 보호를 포기하는 대신 2년간 최대 16% 수익을 추구하며, 발행자 신용 위험과 제한된 유동성을 감수할 투자자에게 적합합니다.
Bank of Montreal (Série K) Digital Return Barrier Notes – points clés
Le prospectus couvre jusqu'à US$[ ] de billets senior non garantis sur deux ans, réglés le 05-août-2025 et arrivant à échéance le 05-août-2027. Les billets sont liés à la moins bonne performance entre l’indice S&P 500 (SPX) et l’indice Russell 2000 (RTY) et ne versent pas de coupons.
- Payoff digital : Si, à la date d’évaluation du 02-août-2027, l’indice le moins performant est ≥70 % de son niveau initial au 31-juil-2025, les détenteurs reçoivent le principal plus un rendement fixe de 16 %.
- Risque de barrière : Si l’indice le moins performant clôture en dessous de 70 % de son niveau initial, le remboursement correspond au principal plus (principal × variation en pourcentage), exposant les investisseurs à une perte en 1:1 pouvant aller jusqu’à une perte totale.
- Crédit et liquidité : Les billets sont des obligations non garanties de Bank of Montreal, ne sont pas assurés par CDIC/FDIC et ne seront pas cotés. La liquidité secondaire dépend uniquement de BMO Capital Markets (BMOCM).
- Économie de prix : Prix public à 100 % avec une concession de vente allant jusqu’à 1 %. La valeur initiale estimée est de 975,50 $ pour 1 000 $ (minimum 925,00 $), impliquant une décote initiale d’environ 2,5–7,5 % par rapport au prix d’émission.
- Montants et identifiants : minimum 1 000 $ ; CUSIP 06376ENZ1.
Principaux risques
- Haut plafond fixé à 16 % quelle que soit la performance des indices.
- Perte totale du principal possible si l’indice le moins performant chute de ≥100 %.
- Exposition à la volatilité des small caps via RTY et aux mouvements des large caps via SPX.
- Traitement fiscal complexe – l’émetteur considère une classification de dérivé prépayé, mais l’IRS pourrait avoir une interprétation différente.
- Conflits potentiels et activités de couverture par BMO et ses affiliés pouvant influencer les niveaux des indices et les prix secondaires.
Globalement, la structure convient aux investisseurs prêts à échanger une protection à la baisse de 30 % contre un rendement plafonné à 16 % sur deux ans, tout en acceptant le risque de crédit de l’émetteur et une liquidité limitée.
Bank of Montreal (Serie K) Digital Return Barrier Notes – wichtige Punkte
Das Free-Writing-Prospekt deckt bis zu US$[ ] an zweijährigen, unbesicherten Senior Notes ab, mit Abrechnung am 05.08.2025 und Fälligkeit am 05.08.2027. Die Notes sind an den schlechtesten Performer des S&P 500 Index (SPX) und des Russell 2000 Index (RTY) gekoppelt und zahlen keine Kupons.
- Digitaler Ertrag: Wenn am Bewertungsdatum 02.08.2027 der am schlechtesten performende Index ≥70 % seines Anfangswerts vom 31.07.2025 ist, erhalten Inhaber das Kapital plus eine feste Rendite von 16 %.
- Barriere-Risiko: Schließt der schlechteste Index unter 70 % seines Anfangswerts, erfolgt die Rückzahlung als Kapital plus (Kapital × prozentuale Veränderung), was eine 1:1 Abwärtsrisiko bis hin zum Totalverlust bedeutet.
- Kredit- & Liquiditätsrisiko: Die Notes sind unbesicherte Verbindlichkeiten der Bank of Montreal, nicht durch CDIC/FDIC versichert und werden nicht börsennotiert. Die Sekundärliquidität hängt ausschließlich von BMO Capital Markets (BMOCM) ab.
- Preisgestaltung: Öffentlicher Preis 100 % mit bis zu 1 % Verkaufskonvention. Der geschätzte Anfangswert liegt bei $975,50 pro $1.000 (Minimum $925,00), was einem anfänglichen Abschlag von etwa 2,5–7,5 % gegenüber dem Ausgabepreis entspricht.
- Nennwerte & Kennungen: Mindestbetrag $1.000; CUSIP 06376ENZ1.
Risikohighlights
- Begrenzte Obergrenze von 16 % unabhängig von Indexgewinnen.
- Vollständiger Kapitalverlust möglich, wenn der schlechteste Index ≥100 % fällt.
- Exponiert gegenüber Small-Cap-Volatilität durch RTY und Large-Cap-Marktschwankungen durch SPX.
- Komplexe steuerliche Behandlung – Emittent geht von einer Vorauszahlungs-Derivatklassifizierung aus, IRS könnte jedoch anders entscheiden.
- Potenzielle Interessenkonflikte und Absicherungsaktivitäten von BMO und verbundenen Unternehmen können Indexstände und Sekundärpreise beeinflussen.
Insgesamt eignet sich die Struktur für Anleger, die bereit sind, einen 30%igen Abwärtsschutz gegen eine begrenzte 16%ige Rendite über zwei Jahre zu tauschen und dabei das Emittenten-Kreditrisiko sowie eingeschränkte Liquidität akzeptieren.
- 30 % downside buffer before any principal loss occurs.
- Fixed 16 % gross payoff offers visibility of return if buffer holds.
- Short 2-year tenor reduces long-dated credit exposure relative to typical 5–6 year structured notes.
- Unlimited downside below the 70 % barrier; principal can be fully lost.
- Upside is capped at 16 %, underperforming direct equity exposure in strong markets.
- Estimated initial value ($975.50) is materially below issue price, embedding upfront costs.
- No exchange listing; liquidity depends solely on BMOCM’s willingness to bid.
- Issuer credit risk: payments rely on Bank of Montreal’s ability to pay.
- Complex U.S. tax treatment with potential for adverse future IRS guidance.
Insights
TL;DR – 16 % cap with 30 % buffer; high downside, issuer & liquidity risk.
The note delivers a binary payoff: a 16 % gross return if the weakest of SPX or RTY is at least 70 % of its start level in two years. Statistically, historic two-year drawdowns for these indices exceed 30 % in stressed markets, meaning probability of loss is material. Because the payoff is digital, any positive index performance above –30 % still returns the same 16 %, limiting risk-adjusted upside. An estimated initial value of $975.50 signals roughly 2.5 % upfront economic cost plus as much as 1 % commission. Credit spread widening or equity volatility spikes can further depress secondary values. Suitable only for risk-tolerant investors seeking defined, capped upside and willing to underwrite both BMO credit and equity market tail risk.
TL;DR – Attractive if you expect flat-to-moderate equity markets; poor in bull or severe bear scenarios.
From an asset-allocation perspective, the structure resembles selling a down-and-in put spread while buying a digital call. Investors swap continuous equity upside for a fixed 16 % coupon-like payoff and assume deep downside. The 30 % cushion is meaningful for moderate corrections but offers limited protection during recessionary drawdowns, which historically have breached –30 % more than once per decade. The capped upside drags expected return in prolonged rallies. Given the two-year tenor, I view risk/reward as balanced, hence neutral impact; tactical buyers may use it as a yield enhancer in range-bound outlooks, but it is unsuitable as a core holding.
Bank of Montreal (Serie K) Digital Return Barrier Notes – punti chiave
Il prospetto informativo copre fino a US$[ ] di note senior non garantite biennali, con regolamento il 05-ago-2025 e scadenza il 05-ago-2027. Le note sono collegate al peggior rendimento tra l'indice S&P 500 (SPX) e l'indice Russell 2000 (RTY) e non pagano cedole.
- Payoff digitale: Se, alla data di valutazione del 02-ago-2027, l'indice meno performante è ≥70% del suo livello iniziale del 31-lug-2025, i detentori ricevono il capitale più un rendimento fisso del 16%.
- Rischio barriera: Se l'indice meno performante chiude sotto il 70% del livello iniziale, il rimborso corrisponde al capitale più (capitale × variazione percentuale), esponendo gli investitori a un ribasso 1:1 fino alla perdita totale.
- Credito e liquidità: Le note sono obbligazioni non garantite di Bank of Montreal, non sono assicurate da CDIC/FDIC e non saranno quotate. La liquidità secondaria dipende esclusivamente da BMO Capital Markets (BMOCM).
- Economia di prezzo: Prezzo al pubblico al 100% con una commissione di vendita fino all'1%. Il valore iniziale stimato è di $975,50 per $1.000 (minimo $925,00), implicando uno sconto iniziale di circa 2,5–7,5% rispetto al prezzo di emissione.
- Tagli e identificativi: minimo $1.000; CUSIP 06376ENZ1.
Rischi principali
- Rendimento massimo limitato al 16% indipendentemente dai guadagni degli indici.
- Possibilità di perdita totale del capitale se l'indice peggiore scende del 100% o più.
- Esposizione alla volatilità delle small cap tramite RTY e ai movimenti delle large cap tramite SPX.
- Trattamento fiscale complesso – l’emittente assume una caratterizzazione da derivato prepagato, ma l’IRS potrebbe avere un’opinione diversa.
- Possibili conflitti e attività di copertura da parte di BMO e affiliati che possono influenzare i livelli degli indici e il prezzo secondario.
In sintesi, la struttura è adatta a investitori disposti a scambiare una protezione al ribasso del 30% per un rendimento massimo del 16% in due anni, accettando il rischio di credito dell’emittente e una liquidità limitata.
Bank of Montreal (Serie K) Digital Return Barrier Notes – puntos clave
El prospecto cubre hasta US$[ ] de notas senior no garantizadas a dos años, con liquidación el 05-ago-2025 y vencimiento el 05-ago-2027. Las notas están vinculadas al peor desempeño entre el índice S&P 500 (SPX) y el índice Russell 2000 (RTY) y no pagan cupón.
- Pago digital: Si, en la fecha de valoración del 02-ago-2027, el índice con peor desempeño es ≥70% de su nivel inicial al 31-jul-2025, los tenedores reciben el principal más un retorno fijo del 16%.
- Riesgo de barrera: Si el índice con peor desempeño cierra por debajo del 70% de su nivel inicial, el reembolso será el principal más (principal × cambio porcentual), exponiendo a los inversores a una pérdida directa 1:1 hasta la pérdida total.
- Crédito y liquidez: Las notas son obligaciones no garantizadas del Bank of Montreal, no están aseguradas por CDIC/FDIC y no estarán listadas. La liquidez secundaria depende exclusivamente de BMO Capital Markets (BMOCM).
- Economía de precios: Precio al público al 100% con hasta 1% de comisión de venta. El valor inicial estimado es de $975.50 por $1,000 (mínimo $925.00), implicando un descuento inicial de aproximadamente 2.5–7.5% respecto al precio de emisión.
- Denominaciones e identificadores: mínimo $1,000; CUSIP 06376ENZ1.
Aspectos clave de riesgo
- Alza limitada al 16% independientemente de las ganancias de los índices.
- Posible pérdida total del principal si el peor índice cae ≥100%.
- Exposición a la volatilidad de small caps a través de RTY y a movimientos de large caps mediante SPX.
- Tratamiento fiscal complejo – el emisor asume una caracterización de derivado prepagado, pero el IRS podría tener una opinión diferente.
- Potenciales conflictos y actividades de cobertura por parte de BMO y afiliados que pueden influir en los niveles de los índices y en los precios secundarios.
En resumen, la estructura es adecuada para inversores dispuestos a aceptar una protección a la baja del 30% a cambio de un retorno máximo del 16% en dos años, asumiendo el riesgo crediticio del emisor y una liquidez limitada.
뱅크 오브 몬트리올 (시리즈 K) 디지털 리턴 배리어 노트 – 주요 내용
이 무료 작성 설명서는 2년 만기 선순위 무담보 노트 최대 US$[ ]를 다루며, 결제일은 2025년 8월 5일이고 만기일은 2027년 8월 5일입니다. 이 노트는 S&P 500 지수(SPX)와 러셀 2000 지수(RTY) 중 최저 성과 지수에 연동되며 쿠폰은 지급되지 않습니다.
- 디지털 페이오프: 2027년 8월 2일 평가일에 최저 성과 지수가 2025년 7월 31일 초기 수준의 70% 이상이면, 보유자는 원금과 고정 16% 수익을 받습니다.
- 배리어 리스크: 최저 성과 지수가 초기 수준의 70% 미만으로 마감하면 상환금은 원금 + (원금 × 변동률)으로, 투자자는 1:1 손실 위험에 노출되어 원금 전액 손실까지 가능합니다.
- 신용 및 유동성: 이 노트는 뱅크 오브 몬트리올의 무담보 채무이며, CDIC/FDIC 보험 대상이 아니고 상장되지 않습니다. 2차 유동성은 BMO 캐피털 마켓(BMOCM)에 전적으로 의존합니다.
- 가격 경제: 공모가는 100%이며 최대 1% 판매 수수료가 있습니다. 예상 초기 가치는 $1,000당 $975.50 (최소 $925.00)로, 발행가 대비 약 2.5–7.5% 할인된 가치입니다.
- 액면 및 식별번호: 최소 $1,000; CUSIP 06376ENZ1.
주요 위험 사항
- 지수 상승과 관계없이 최대 수익은 16%로 제한됩니다.
- 최저 지수가 100% 이상 하락하면 원금 전액 손실 가능성이 있습니다.
- RTY를 통한 소형주 변동성 및 SPX를 통한 대형주 시장 움직임에 노출됩니다.
- 복잡한 세무 처리 – 발행자는 선지급 파생상품으로 분류하지만 IRS는 다르게 판단할 수 있습니다.
- BMO 및 계열사의 잠재적 이해상충 및 헤지 활동이 지수 수준과 2차 가격에 영향을 미칠 수 있습니다.
전반적으로 이 구조는 30% 하락 보호를 포기하는 대신 2년간 최대 16% 수익을 추구하며, 발행자 신용 위험과 제한된 유동성을 감수할 투자자에게 적합합니다.
Bank of Montreal (Série K) Digital Return Barrier Notes – points clés
Le prospectus couvre jusqu'à US$[ ] de billets senior non garantis sur deux ans, réglés le 05-août-2025 et arrivant à échéance le 05-août-2027. Les billets sont liés à la moins bonne performance entre l’indice S&P 500 (SPX) et l’indice Russell 2000 (RTY) et ne versent pas de coupons.
- Payoff digital : Si, à la date d’évaluation du 02-août-2027, l’indice le moins performant est ≥70 % de son niveau initial au 31-juil-2025, les détenteurs reçoivent le principal plus un rendement fixe de 16 %.
- Risque de barrière : Si l’indice le moins performant clôture en dessous de 70 % de son niveau initial, le remboursement correspond au principal plus (principal × variation en pourcentage), exposant les investisseurs à une perte en 1:1 pouvant aller jusqu’à une perte totale.
- Crédit et liquidité : Les billets sont des obligations non garanties de Bank of Montreal, ne sont pas assurés par CDIC/FDIC et ne seront pas cotés. La liquidité secondaire dépend uniquement de BMO Capital Markets (BMOCM).
- Économie de prix : Prix public à 100 % avec une concession de vente allant jusqu’à 1 %. La valeur initiale estimée est de 975,50 $ pour 1 000 $ (minimum 925,00 $), impliquant une décote initiale d’environ 2,5–7,5 % par rapport au prix d’émission.
- Montants et identifiants : minimum 1 000 $ ; CUSIP 06376ENZ1.
Principaux risques
- Haut plafond fixé à 16 % quelle que soit la performance des indices.
- Perte totale du principal possible si l’indice le moins performant chute de ≥100 %.
- Exposition à la volatilité des small caps via RTY et aux mouvements des large caps via SPX.
- Traitement fiscal complexe – l’émetteur considère une classification de dérivé prépayé, mais l’IRS pourrait avoir une interprétation différente.
- Conflits potentiels et activités de couverture par BMO et ses affiliés pouvant influencer les niveaux des indices et les prix secondaires.
Globalement, la structure convient aux investisseurs prêts à échanger une protection à la baisse de 30 % contre un rendement plafonné à 16 % sur deux ans, tout en acceptant le risque de crédit de l’émetteur et une liquidité limitée.
Bank of Montreal (Serie K) Digital Return Barrier Notes – wichtige Punkte
Das Free-Writing-Prospekt deckt bis zu US$[ ] an zweijährigen, unbesicherten Senior Notes ab, mit Abrechnung am 05.08.2025 und Fälligkeit am 05.08.2027. Die Notes sind an den schlechtesten Performer des S&P 500 Index (SPX) und des Russell 2000 Index (RTY) gekoppelt und zahlen keine Kupons.
- Digitaler Ertrag: Wenn am Bewertungsdatum 02.08.2027 der am schlechtesten performende Index ≥70 % seines Anfangswerts vom 31.07.2025 ist, erhalten Inhaber das Kapital plus eine feste Rendite von 16 %.
- Barriere-Risiko: Schließt der schlechteste Index unter 70 % seines Anfangswerts, erfolgt die Rückzahlung als Kapital plus (Kapital × prozentuale Veränderung), was eine 1:1 Abwärtsrisiko bis hin zum Totalverlust bedeutet.
- Kredit- & Liquiditätsrisiko: Die Notes sind unbesicherte Verbindlichkeiten der Bank of Montreal, nicht durch CDIC/FDIC versichert und werden nicht börsennotiert. Die Sekundärliquidität hängt ausschließlich von BMO Capital Markets (BMOCM) ab.
- Preisgestaltung: Öffentlicher Preis 100 % mit bis zu 1 % Verkaufskonvention. Der geschätzte Anfangswert liegt bei $975,50 pro $1.000 (Minimum $925,00), was einem anfänglichen Abschlag von etwa 2,5–7,5 % gegenüber dem Ausgabepreis entspricht.
- Nennwerte & Kennungen: Mindestbetrag $1.000; CUSIP 06376ENZ1.
Risikohighlights
- Begrenzte Obergrenze von 16 % unabhängig von Indexgewinnen.
- Vollständiger Kapitalverlust möglich, wenn der schlechteste Index ≥100 % fällt.
- Exponiert gegenüber Small-Cap-Volatilität durch RTY und Large-Cap-Marktschwankungen durch SPX.
- Komplexe steuerliche Behandlung – Emittent geht von einer Vorauszahlungs-Derivatklassifizierung aus, IRS könnte jedoch anders entscheiden.
- Potenzielle Interessenkonflikte und Absicherungsaktivitäten von BMO und verbundenen Unternehmen können Indexstände und Sekundärpreise beeinflussen.
Insgesamt eignet sich die Struktur für Anleger, die bereit sind, einen 30%igen Abwärtsschutz gegen eine begrenzte 16%ige Rendite über zwei Jahre zu tauschen und dabei das Emittenten-Kreditrisiko sowie eingeschränkte Liquidität akzeptieren.
Filed Pursuant to Rule 433
Registration Statement No. 333-285508
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Bank of Montreal Market Linked Securities |
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Market Linked Securities—Contingent Fixed Return and Fixed Percentage Buffered Downside Principal at Risk Securities Linked to the Nasdaq-100 Index® due August 2, 2029 Term Sheet to Preliminary Pricing Supplement dated June 30, 2025 |
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Summary of Terms |
Hypothetical Payout Profile*** |
| Issuer: | Bank of Montreal |
| Market Measure: | Nasdaq-100 Index® (the “Underlier”) |
| Pricing Date*: | July 30, 2025 |
| Issue Date*: | August 4, 2025 |
| Face Amount and Original Offering Price: |
$1,000 per security |
| Maturity Payment Amount (per security): |
· if the ending value is greater than or equal to the threshold value: $1,000 + the contingent fixed return; or · if the ending value is less than the threshold value: $1,000 + [$1,000 × (underlier return + buffer amount)] |
| Stated Maturity Date*: |
August 2, 2029 |
| Starting Value: | The closing value of the Underlier on the pricing date |
| Ending Value: | The closing value of the Underlier on the calculation day |
| Contingent Fixed Return: |
At least 34.00% of the face amount per security, to be determined on the pricing date |
| Threshold Value: | 90% of the starting value |
| Buffer Amount: | 10% |
| Underlier Return: | (ending value – starting value) / starting value |
| Calculation Day*: | July 30, 2029 |
| Calculation Agent: | BMO Capital Markets Corp. (“BMOCM”), an affiliate of the issuer |
| Denominations: | $1,000 and any integral multiple of $1,000 |
| Agent Discount**: | Up to 3.325% for Wells Fargo Securities, LLC (“WFS”). Of that agent discount, Wells Fargo Advisors (“WFA”), may receive a selling concession of up to 2.75% and a distribution expense fee of up to 0.075% |
| CUSIP: | 06376ENF5 |
| Material Tax Consequences: |
See the preliminary pricing supplement. |
*subject to change
** In addition, selected dealers may receive a fee of up to 0.20% for marketing and other services
***assumes a contingent fixed return equal to the lowest possible contingent fixed return that may be determined on the pricing date.
Any positive return on the securities at maturity will be limited to the contingent fixed return, even if the ending value of the Underlier significantly exceeds the starting value; you will not participate in any appreciation of the Underlier
If the ending value is less than the threshold value, you will have 1-to-1 downside exposure to the decrease in the value of the Underlier in excess of the buffer amount and will lose some, and possibly up to 90%, of the face amount of your securities at maturity.
On the date of the accompanying preliminary pricing supplement, the estimated initial value of the securities is $956.70 per security. The estimated initial value of the securities at pricing may differ from this value but will not be less than $910.00 per security. However, as discussed in more detail in the accompanying preliminary pricing supplement, the actual value of the securities at any time will reflect many factors and cannot be predicted with accuracy. See “Estimated Value of the Securities” in the accompanying preliminary pricing supplement.
Preliminary Pricing Supplement:
sec.gov/Archives/edgar/data/927971/000121465925009782/u626253424b2.htm
The securities have complex features and investing in the securities involves risks not associated with an investment in conventional debt securities. See “Selected Risk Considerations” in this term sheet and the accompanying preliminary pricing supplement and “Risk Factors” in the accompanying product supplement.
This introductory term sheet does not provide all of the information that an investor should consider prior to making an investment decision.
Investors should carefully review the accompanying preliminary pricing supplement, product supplement, underlying supplement, prospectus supplement and prospectus before making a decision to invest in the securities.
NOT A BANK DEPOSIT AND NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY
Selected Risk Considerations
The risks set forth below are discussed in detail in the “Selected Risk Considerations” section in the accompanying preliminary pricing supplement and the “Risk Factors” section in the accompanying product supplement. Please review those risk disclosures carefully.
Risks Relating To The Securities Generally
| · | If The Ending Value Is Less Than The Threshold Value, You Will Lose Some, And Possibly Up To 90%, Of The Face Amount Of Your Securities At Maturity. |
| · | You Will Receive The Contingent Fixed Return Only If The Ending Value Is Greater Than Or Equal To The Threshold Value. |
| · | The Potential Return On The Securities Is Limited To The Contingent Fixed Return. |
| · | The Securities Do Not Pay Interest. |
| · | The Securities Are Subject To Credit Risk. |
| · | The U.S. Federal Income Tax Consequences Of An Investment In The Securities Are Unclear. |
| · | The Stated Maturity Date May Be Postponed If The Calculation Day Is Postponed. |
Risks Relating To The Estimated Value Of The Securities And Any Secondary Market
| · | The Estimated Value Of The Securities On The Pricing Date, Based On Our Proprietary Pricing Models, Will Be Less Than The Original Offering Price. |
| · | The Terms Of The Securities Are Not Determined By Reference To The Credit Spreads For Our Conventional Fixed-Rate Debt. |
| · | The Estimated Value Of The Securities Is Not An Indication Of The Price, If Any, At Which WFS Or Any Other Person May Be Willing To Buy The Securities From You In The Secondary Market. |
| · | The Value Of The Securities Prior To Stated Maturity Will Be Affected By Numerous Factors, Some Of Which Are Related In Complex Ways. |
| · | The Securities Will Not Be Listed On Any Securities Exchange And We Do Not Expect A Trading Market For The Securities To Develop. |
Risks Relating To The Underlier
| · | The Maturity Payment Amount Will Depend Upon The Performance Of The Underlier And Therefore The Securities Are Subject To The Following Risks, Each As Discussed In More Detail In The Accompanying Product Supplement. |
| o | Investing In The Securities Is Not The Same As Investing In The Underlier. |
| o | Historical Values Of The Underlier Should Not Be Taken As An Indication Of The Future Performance Of The Underlier During The Term Of The Securities. |
| o | Changes That Affect The Underlier May Adversely Affect The Value Of The Securities And The Maturity Payment Amount. |
| o | We Cannot Control Actions By Any Of The Unaffiliated Companies Whose Securities Are Included In The Underlier. |
| o | We And Our Affiliates Have No Affiliation With The Underlier Sponsor And Have Not Independently Verified Its Public Disclosure Of Information. |
| · | The Securities Are Subject To Risks Relating To Non-U.S. Securities. |
Risks Relating To Conflicts Of Interest
| · | Our Economic Interests And Those Of Any Dealer Participating In The Offering Are Potentially Adverse To Your Interests. |
The Issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this document relates. Before you invest, you should read the prospectus in that registration statement and the other documents that the Issuer has filed with the SEC for more complete information about us and this offering. You may obtain these documents free of charge by visiting the SEC’s website at http://www.sec.gov. Alternatively, the Issuer will arrange to send to you the prospectus (as supplemented by the prospectus supplement) if you request it by calling the Issuer’s agent toll-free at 1-877-369-5412.
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.
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FAQ
What return can WTIU investors expect from the new Bank of Montreal notes?
How much downside protection do the Digital Return Barrier Notes provide?
What are the key dates for the Series K Barrier Notes?
Are the notes principal-protected?
What is the estimated initial value versus the issue price?
Will the notes be listed or traded on an exchange?
