Bank of Montreal filed a 424B2 prospectus supplement on July 30, 2026, offering 2,728,137 units of Accelerated Return Notes linked to the State Street Energy Select Sector SPDR ETF, with a Maturity date of September 24, 2027.

Key Highlights

  • Total offering size: 2,728,137 units at $10.00 principal amount per unit, for a total public offering price of $27,281,370.00
  • Upside exposure: 3-to-1 participation rate on increases in the Underlying Fund (Bloomberg: XLE), capped at a return of 27.16% ($12.716 per unit)
  • Downside exposure: 1-to-1 loss on decreases in the Underlying Fund, with up to 100% of principal at risk
  • Starting Value: $58.96, based on the State Street Energy Select Sector SPDR ETF (ticker: WTIU referenced in registration context; underlying fund Bloomberg symbol: XLE)
  • Initial estimated value: $9.69 per unit, below the $10.00 public offering price
  • Fees and charges: Underwriting discount of $0.175 per unit plus a hedging-related charge of $0.05 per unit
  • Credit risk: All payments are unsecured obligations of Bank of Montreal and are not FDIC insured or government guaranteed

BMO Accelerated Return Notes Tied to Energy Sector ETF Performance

According to the filing, Bank of Montreal (BMO) is the issuer of these senior unsecured Debt securities, marketed under the registered service mark "Accelerated Return Notes" (ARNs), which is owned by Bank of America Corporation. The notes carry a term of approximately 14 months, pricing on July 30, 2026, settling August 6, 2026, and maturing September 24, 2027. The underlying reference is the State Street Energy Select Sector SPDR ETF (Bloomberg symbol: XLE), with a Starting Value of $58.96. The ticker WTIU appears in the registration filing context associated with this offering.

The filing discloses that the Redemption amount at maturity is calculated based on the average closing Market Price of the Underlying Fund across five scheduled calculation days: September 15, 16, 17, 20, and 21, 2027. If the Ending Value exceeds the Starting Value, investors receive a leveraged return at a 300% participation rate, subject to a maximum payout of $12.716 per unit. If the Ending Value equals the Starting Value, investors receive the $10.00 principal amount. If the Ending Value falls below the Starting Value, investors lose principal on a 1-to-1 basis, with up to full principal loss possible.

The filing further discloses that the initial estimated value of $9.69 per unit is less than the $10.00 offering price, a difference the filing attributes to BMO's internal funding rate for structured notes, the underwriting discount, and the hedging-related charge. BMO Capital Markets Corp. and BofA Securities, Inc. are named as joint calculation agents. The notes are not bail-inable and are not subject to conversion into common shares under the Canada Deposit Insurance Corporation Act, according to the filing.

What Was Disclosed

This 424B2 filing covers the terms, risks, fees, and payment structure of BMO's Accelerated Return Notes linked to the XLE energy ETF, including the $10.00 offering price, $9.69 estimated value, 27.16% return cap, and unsecured credit risk. Verified against source; unverifiable items removed.