Bank of Montreal (BMO) plans to raise $3.15 billion in a share offering to help it meet new capital requirements set by Canada’s federal banking regulator.
The Office of the Superintendent for Financial Institutions (OSFI) raised the domestic stability buffer for Canada’s commercial banks by half a percentage point to 3% as of February 1, 2023.
The regulator also increased the range of future adjustments to between 0% and 4%, up from a previous high end of 2.5%.
Bank of Montreal said it will use the money raised to meet the new capital requirements and for general corporate purposes.
The bank plans to sell 11,805,000 common shares in a public offering at a price of $118.60 per share for total proceeds of $1.40 billion.
Bank of Montreal also plans to sell 14,755,477 shares at the same price to a group of investors including Caisse de dépôt et placement du Québec, OMERS, Alberta Investment Management Corp., Healthcare of Ontario Pension Plan, Public Sector Pension Investment Board, Canada Pension Plan Investment Board and BNP Paribas SA for total proceeds of $1.75 billion.
Bank of Montreal’s stock is down 13% this year at $122.89 per share.
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