MicroSectors™ Energy 3X Leveraged ETN SEC Filings

Bank of Montreal (Series K) Contingent Risk Absolute Return Buffer Notes are five-year, unsecured senior notes linked to the S&P 500 Index and scheduled to mature on 5 Aug 2030. They offer investors a structured payoff combining capped upside participation, a limited downside buffer and full issuer credit exposure.

Key commercial terms

• Upside participation: 100 % of any index appreciation, subject to a Maximum Return of 82 % (cash redemption capped at $1,820 per $1,000 PA).
• Absolute-return feature: If the S&P 500 finishes down ≤20 %, investors earn a positive return equal to the magnitude of the decline, up to the Maximum Downside Redemption Amount of $1,200.
• Buffer: First 20 % of index losses are absorbed. Once breached, principal is eroded 1-for-1, exposing investors to a maximum 80 % capital loss.
• Coupon: None (zero-interest instrument).
• Issue economics: Price to public 100 %, underwriting commission 1.225 %, net proceeds 98.775 %. Estimated initial fair value $976.40 (range not lower than $930).
• Key dates: Pricing 31 Jul 2025, Settlement 5 Aug 2025, Valuation 31 Jul 2030, Maturity 5 Aug 2030.
• Liquidity: Not exchange-listed; any secondary market will be solely at BMO Capital Markets’ discretion.
• Credit: All payments depend on Bank of Montreal’s ability to pay. Notes are not FDIC or CDIC insured.

Strategic positioning: The product targets investors seeking equity exposure with limited downside protection and a defined return ceiling. In rising markets the 82 % cap causes significant opportunity cost versus direct S&P 500 investment, while in sharply falling markets exposure remains substantial once the 20 % buffer is pierced. The estimated fair value discount and lack of liquidity can weigh on secondary-market pricing.