Just one day after Royal Bank of Canada and Toronto-Dominion Bank each announced plans to boost capital ratios, a third big bank is following suit and issuing new shares of its own.

Bank of Montreal announced on Tuesday plans to issue $150 million of non-cumulative five-year rate reset Class B Preferred Shares Series 18, for proceeds to be used for “general corporate purposes.”

The offering is expected to close Dec. 11, and will be underwritten on a bought deal basis by a syndicate led by BMO Capital Markets.

The bank has also granted to the underwriters an option to purchase up to an additional $100 million of the shares exercisable at any time up to two days before closing.

The preferred shares will be issued to the public at a price of $25 per share. Holders will be entitled to receive non-cumulative preferential fixed quarterly dividends of $0.40625 per share for an initial five years, yielding 6.5% annually.

Thereafter, the dividend rate will reset every five years to be equal to the 5-Year Government of Canada Bond Yield plus 3.83%.

IE