There is a new way to play Bank of Montreal’s shares. In a prospectus filed Friday , the BMONT Split Corp. will hold common shares of BMO, splitting them into income-earning preferred shares and market-dependent capital shares.

Each unit of the offering consists of two capital shares and one preferred. The offering is intended to provide holders of capital shares with a leveraged investment, linked to changes in the market price of the BMO shares. They will be entitled to the benefit of any capital appreciation in the market price of the BMO shares on redemption, scheduled for 2009. Whereas fixed distributions on the preferred shares will be funded from the dividends received on the BMO shares.

Any shortfall in the distributions on the preferreds will be funded by selling shares, or premiums earned from writing covered call options on BMO shares. But, any excess dividends will be paid to the capital shareholders.

Scotia Capital is leading the deal and will charge 0.20% annually for administration. It is joined by BMO Nesbitt Burns Inc., National Bank Financial Inc., TD Securities Inc., HSBC Securities (Canada) Inc., Canaccord Capital Corp., Desjardins Securities Inc. and Raymond James Ltd. in underwriting the deal.