Canadian lender Bank of Montreal (BMO) has raised C$2.6bn ($1.9bn) to boost its capital via a public and private share offering.
Specifically, the lender raised approximately C$1.6bn ($1.17bn) of gross proceeds from the public offering at a price of C$118.6 ($87.57) per share and approximately C$1bn ($730m) from the concurrent private placement to investors, excluding BNP Paribas (BNPP).
The private placement portion of the offering was subscribed by Caisse de dépôt et placement du Québec, Omers, Alberta Investment Management Corporation, Healthcare of Ontario Pension Plan, Public Sector Pension Investment Board and Canada Pension Plan Investment Board
BMO issued 8,431,700 common shares pursuant to the concurrent private placement to these investors.
As per the initial announcement, the closing of the private placement to BNPP is subject to the closing of the bank’s previously announced acquisition of Bank of the West from BNPP.
Upon completion, BMO hopes to raise additional gross proceeds of approximately C$750m ($548.91m) from BNPP.
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In addition, 13,575,750 common shares were issued as part of the public offering as the syndicate of underwriters in the offering decided to fully execute its over-allotment option.
BMO anticipates that combining the gross proceeds of the public offering and concurrent private placement will result in aggregate gross proceeds of around C$3.35bn ($2.45bn), with the net proceeds being roughly C$3.24bn ($2.37bn).
The lender will use the proceeds to boost its capital position to meet increased regulatory requirements and for general corporate purposes.
Earlier this month, the Office of the Superintendent for Financial Institutions (OSFI) said that as of 1 February 2023, the domestic stability buffer (DSB) level will increase by 0.5% to 3%.