Skylon Advisors Inc. today announced the launch of Bank of Montreal Skylon Y.I.E.L.D. Notes, Series 2. The notes offer investors the potential to earn up to an 11% annual yield on a basket of 10 leading Canadian issuers.

The 6.5-year note pays a 4.75% coupon at the end of 2005 (which represents the equivalent of an annual rate of interest of 11.02%) and has the potential to pay an annual variable coupon of up to 11% over the remaining six years.

The variable interest is linked to the price performance of a diversified basket of equally weighted securities of 10 Canadian issuers, including TD Bank, CIBC, TransCanada Corp., Thomson Corp., CI Fund Management Inc. and BCE Inc.

When there is positive price performance on the valuation date of the notes by an underlying security in the portfolio in relation to its initial purchase price, that security’s return will be deemed to be 11%. If every security’s price return remains positive, each annual interest payment will be 11%. Any negative or zero return as compared to the initial purchase price by any of the underlying securities on the valuation date is counted as its actual return.

Yearly payout from the notes in 2006 through 2011 may be up to 11% and will equal the average return of the 10 securities. The annual coupon will not exceed 11% and may be zero. There are no management fees for the notes or for the underlying portfolio.

The notes are fully eligible for registered plans. Series 2 is available through most financial advisors and is on sale until July 15.

The issue price is $100 per note, with the minimum investment being $2,000.

Skylon also offers the VentureLink Group of labour-sponsored investment funds. The investment management firm is a wholly owned subsidiary of CI Fund Management Inc.