Canadian Banks Now Paying 10% For Capital

Bank of Montreal announced through one of their wholly owned subsidiaries, BMO Capital Trust II, that  they will be raising $450 million of capital at a rate of 10.22%. 

For all intensive purposes, this is 10 year money. While the bank can extend the maturity date, it will be somewhat onerous to do so as they should be able to raise new capital at better rates than those indicated if the maturity is extended.

While BMO is the first to offer rates of 10%+, others will follow suit as secondary issues dropped on the day as sellers sold off positions to grab the higher rate on this issue.

With rates like these available on investment grade securities, investors would be hard pressed to place funds into equities right now.

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5 Responses

  1. Where are these bonds available? How can I buy one?

    Thanks.

  2. Where are these bonds available, and how can I buy them

    • If you email me your contact information, we can provide you with more details. My contact information is on the About the Author Page of the blog. Alternatively, if you have an investment advisor currently, they should be able to provide you with pricing and what they have available in inventory.
      Best regards and thanks for responding.

      If you email me your contact information, we can provide you with more details. My contact information is on the About the Author Page of the blog. Alternatively, if you have an investment advisor currently, they should be able to provide you with pricing and what they have available in inventory.
      Best regards and thanks for responding.

      Robert Rothenberg
      rrothenberg@rothenberg.ca
      http://www.rothenberg.ca
      1

  3. Robert,

    Could you please send information on BMO or equivalent issues. Is this a bond, preferred, convertible?

    Thanks

  4. Please send information.

    Thank you.

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