Registration Statement No.333-217200
Filed Pursuant to Rule 424(b)(3)
Amended and Restated Pricing Supplement
dated February 18, 2021 to the
Pricing Supplement dated January 17, 2020
to the Prospectus dated April 27, 2017,
the Prospectus Supplement dated September 23, 2018 and the Product Supplement dated October 21, 2019
US$1,563,000.00
Senior Medium-Term Notes, Series E
Autocallable Barrier Notes with Contingent Coupons due February 23, 2021
Linked to the common stock of Citigroup Inc.
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The notes are designed for investors who are seeking monthly contingent periodic interest payments
(as described in more detail below), as well as a return of principal if the closing level of the Citigroup Inc. (the “Reference
Asset”) on any monthly Observation Date beginning in July 2020 is greater than 100% of its Initial Level (the “Call
Level”). Investors should be willing to have their notes automatically redeemed prior to maturity, be willing to forego any
potential to participate in the appreciation of the Reference Asset and be willing to lose some or all of their principal at maturity.
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The notes will pay a Contingent Coupon on each Contingent Coupon Payment Date at the Contingent
Interest Rate of 0.700% per month (approximately 8.40% per annum) if the closing level of the Reference Asset on the applicable
monthly Observation Date is greater than its Coupon Barrier Level. However, if the closing level of the Reference Asset is less
than or equal to its Coupon Barrier Level on an Observation Date, the notes will not pay the Contingent Coupon for that Observation
Date.
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Beginning on July 20, 2020, if on any Observation Date, the closing level of the Reference Asset
is greater than its Call Level, the notes will be automatically redeemed. On the following Contingent Coupon Payment Date (the
“Call Settlement Date"), investors will receive their principal amount plus the Contingent Coupon otherwise due. After
the notes are redeemed, investors will not receive any additional payments in respect of the notes.
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The notes do not guarantee any return of principal at maturity. Instead, if the notes are not
automatically redeemed, the payment at maturity will be based on the Final Level of the Reference Asset and whether the closing
level of that Reference Asset has declined from its Initial Level to below its Trigger Level on any trading day during the Monitoring
Period (a “Trigger Event”), as described below.
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If the notes are not automatically redeemed, a Trigger Event has occurred and the Final Level
of the Underlying Asset is less than its Initial Level, investors will lose 1% of the principal amount for each 1% decrease in
the level of the Reference Asset from its Initial Level to its Final Level. In such a case, you will receive a delivery of shares
of the Reference Asset (the “Physical Delivery Amount”) or, at our election, the cash equivalent (calculated as described
below, the “Cash Delivery Amount”), which will be worth less than the principal amount, together with the final Contingent
Coupon, if payable. Any fractional shares included in the Physical Delivery Amount will be paid in cash.
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Investing in the notes is not equivalent to a direct investment in the Reference Asset.
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The notes will not be listed on any securities exchange.
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All payments on the notes are subject to the credit risk of Bank of Montreal.
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The notes will be issued in minimum denominations of $1,000 and integral multiples of $1,000.
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Our subsidiary, BMO Capital Markets Corp. (“BMOCM”), is the agent for this offering.
See “Supplemental Plan of Distribution (Conflicts of Interest)” below.
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The notes will not be subject to conversion into our common shares or the common shares of any
of our affiliates under subsection 39.2(2.3) of the Canada Deposit Insurance Corporation Act (the “CDIC Act”).
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Terms of the Notes:
Pricing Date:
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January 17, 2020
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Valuation Date:
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February 18, 2021
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Settlement Date:
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January 23, 2020
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Maturity Date:
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February 23, 2021
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Specific Terms of the Notes:
Autocallable
Number
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Reference
Asset
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Ticker
Symbol
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Initial
Level
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Contingent
Interest Rate
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Coupon
Barrier
Level
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Trigger
Level
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CUSIP
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Principal
Amount
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Price to
Public
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Agent’s
Commission
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Proceeds to
Bank of
Montreal
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ARC 643
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Common stock of Citigroup Inc.
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C
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$81.12
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0.700% per month (approximately 8.40% per annum)
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$60.84, 75.00% of its Initial Level
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$60.84, 75.00% of its Initial Level
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06368DPV0
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$1,563,000.00
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100%
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1.75%
$27,352.50
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98.25%
$1,535,647.50
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Investing in the notes involves risks,
including those described in the “Selected Risk Considerations” section beginning on page P-5 hereof, the “Additional
Risk Factors Relating to the Notes” section beginning on page PS-4 of the product supplement, and the “Risk Factors”
section beginning on page S-1 of the prospectus supplement and on page 8 of the prospectus.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these notes or passed upon the accuracy of this document, the
product supplement, the prospectus supplement or the prospectus. Any representation to the contrary is a criminal offense. The
notes will be our unsecured obligations and will not be savings accounts or deposits that are insured by the United States Federal
Deposit Insurance Corporation, the Deposit Insurance Fund, the Canada Deposit Insurance Corporation or any other governmental agency
or instrumentality or other entity.
On the Pricing Date, based on the terms
set forth above, the estimated initial value of the notes was $969.40 per $1,000 in principal amount. However, as discussed in
more detail below, the actual value of the notes at any time will reflect many factors and cannot be predicted with accuracy.
BMO CAPITAL MARKETS
Key Terms of the Notes:
Reference Asset:
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The common stock of Citigroup Inc. (ticker symbol "C"). See “The Reference Asset” below for additional information.
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Contingent Coupons:
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If the closing level of the Reference Asset on an Observation Date is greater than its Coupon Barrier Level, a Contingent Coupon will be paid on the corresponding Contingent Coupon Payment Date at the Contingent Interest Rate, subject to the automatic redemption feature.
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Contingent Interest Rate:
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0.700% per month (approximately 8.40% per annum), if payable. Accordingly, each Contingent Coupon, if payable, will equal $7.00 for each $1,000 in principal amount.
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Observation Dates:1
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Three trading days prior to each scheduled Contingent Coupon Payment Date.
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Contingent Coupon Payment
Dates:1
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Interest, if payable, will be paid on the 23rd day of each month (or if such day is not a business day, the next following business day), beginning on February 24, 2020 and ending on the Maturity Date, subject to the automatic redemption feature.
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Automatic Redemption:
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Beginning on July 20, 2020, if, on any Observation Date, the closing level of the Reference Asset is greater than its Call Level, the notes will be automatically redeemed. No further amounts will be owed to you under the Notes.
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Payment upon Automatic
Redemption:
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If the notes are automatically redeemed, then, on the Call Settlement Date, investors will receive their principal amount plus the Contingent Coupon otherwise due.
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Call Settlement Date:1
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If the notes are automatically redeemed, the Contingent Coupon Payment Date immediately following the relevant Observation Date.
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Payment at Maturity:
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If the notes are not automatically redeemed, the payment at maturity
for the notes is based on the performance of the Reference Asset.
You will receive $1,000 for each $1,000 in principal amount of
the note, unless (a) a Trigger Event has occurred and (b) the Final Level of the Reference Asset is less than its Initial Level.
If a Trigger Event has occurred and the Final Level of the Reference
Asset is less than its Initial Level, you will receive at maturity, for each $1,000 in principal amount of your notes, a number
of shares equal to the Physical Delivery Amount or, at our election the Cash Delivery Amount. Fractional shares will be paid in
cash. The Physical Delivery Amount will be less than the principal amount of your notes, and may be zero.
You will also receive the final Contingent Coupon, if
payable.
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Trigger Event:
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A Trigger Event will be deemed to occur if the closing level of the Reference Asset is less than its Trigger Level on any trading day during the Monitoring Period.
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Monitoring Period:
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The period from the Pricing Date to and including the Valuation Date.
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Percentage Change:
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The quotient, expressed as a percentage, of the following formula:
(Final Level - Initial Level)
Initial Level
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Initial Level:2
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As set forth on the cover hereof.
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Coupon Barrier Level:2
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$60.84, which is 75% of the Initial Level.
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Trigger Level2:
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$60.84, which is 75% of the Initial Level.
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Call Level:2
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100% of the Initial Level.
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Final Level:
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The closing level of the Reference Asset on the Valuation Date.
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Pricing Date:1
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January 17, 2020.
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Settlement Date:1
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January 23, 2020
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Valuation Date:1
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February 18, 2021
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Maturity Date:1
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February 23, 2021
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Physical Delivery Amount:2
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The number of shares of the Reference Asset equal to $1,000 divided by the Initial Level. Any fractional shares will be paid in cash.
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Cash Delivery Amount:2
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The amount in cash equal to the product of (1) the Physical Delivery Amount and (2) the Final Level.
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Calculation Agent:
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BMOCM
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Selling Agent:
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BMOCM
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1 Subject to the occurrence of a market disruption
event, as described in the accompanying product supplement.
2 As determined by the calculation agent and subject
to adjustment in certain circumstances. See “General Terms of the Notes — Anti-dilution Adjustments” in the product
supplement for additional information about these adjustments.
Additional Terms of the Notes
You should read this document together with
the product supplement dated October 21, 2019, the prospectus supplement dated September 23, 2018 and the prospectus dated April
27, 2017. This document, together with the documents listed below, contains the terms of the notes and supersedes all other
prior or contemporaneous oral statements as well as any other written materials including preliminary or indicative pricing terms,
correspondence, trade ideas, structures for implementation, sample structures, fact sheets, brochures or other educational materials
of ours or the agent. You should carefully consider, among other things, the matters set forth in Additional Risk Factors Relating
to the Notes in the product supplement, as the notes involve risks not associated with conventional debt securities. We urge you
to consult your investment, legal, tax, accounting and other advisers before you invest in the notes.
You may access these documents on the SEC
website at www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date on the SEC website):
Product supplement dated October 21, 2019:
https://www.sec.gov/Archives/edgar/data/927971/000121465919006556/d101190424b2.htm
Prospectus supplement dated September 23, 2018:
https://www.sec.gov/Archives/edgar/data/927971/000119312518280416/d624491d424b5.htm
Prospectus dated April 27, 2017:
https://www.sec.gov/Archives/edgar/data/927971/000119312517142728/d254784d424b2.htm
Our Central Index Key, or CIK, on the SEC
website is 927971. As used in this document, "we", "us" or "our" refers to Bank of Montreal.
This amended and restated pricing supplement amends
and restates the pricing supplement dated January 17, 2020, as previously amended and restated on February 1, 2021,
in its entirety. We refer to this amended and restated pricing supplement as the “pricing supplement.”
Selected Risk Considerations
An investment in the notes involves significant
risks. Investing in the notes is not equivalent to investing directly in the Reference Asset. These risks are explained in more
detail in the “Additional Risk Factors Relating to the Notes” section of the product supplement.
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Your investment in the notes may result in a loss. — The notes do not guarantee any return of principal. If the
notes are not automatically redeemed, the payment at maturity will be based on the closing level and whether a Trigger Event has
occurred. If the Final Level is less than its Trigger Level on any trading day during the Monitoring Period, a Trigger Event will
occur. If a Trigger Event occurs and the Final Level of the Reference Asset is less than its Initial Level, you will lose 1% of
the principal amount for each 1% that the Final Level is less than the Initial Level. In such a case, you will receive at maturity
a delivery of shares of the Reference Stock, or at our election the cash equivalent, which will be worth less than the principal
amount of the notes and may be zero. Accordingly, you could lose your entire investment in the notes.
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The Protection provided by the Trigger Level may terminate on any trading day during the Monitoring Period. —
If the closing level of the Reference Asset is less than its Trigger Level on any trading day during the Monitoring Period and
the Final Level of the Reference Asset is less than its Initial Level, you will suffer a 1% loss on your investment for each 1%
that the Final Level is less than the Initial Level. You will be subject to this potential loss of principal even if, after the
Trigger Event occurs, the level of the Reference Asset increases above its Trigger Level.
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You may not receive any Contingent Coupons with respect to your notes. — We will not necessarily make periodic
interest payments on the notes. If the closing level of the Reference Asset on an Observation Date is less than its Coupon Barrier
Level, we will not pay you the Contingent Coupon applicable to that Observation Date. If the closing level of the Reference Asset
is less than its Coupon Barrier Level on each of the Observation Dates, we will not pay you any Contingent Coupons during the term
of the notes, and you will not receive a positive return on the notes. Generally, this non-payment of any Contingent Coupons will
coincide with a greater risk of principal loss on your notes.
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Your notes are subject to automatic early redemption. — We will redeem the notes if the closing level of the Reference
Asset on any Observation Date is greater than its Call Level. Following an automatic redemption, you will not receive any additional
Contingent Coupons and may not be able to reinvest your proceeds in an investment with returns that are comparable to the notes.
Furthermore, to the extent you are able to reinvest such proceeds in an investment with a comparable return for a similar level
of risk, you may incur transaction costs such as dealer discounts and hedging costs built into the price of the new notes.
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Your return on the notes is limited to the Contingent Coupons, if any, regardless of any appreciation in the value of any
Reference Asset — You will not receive a payment at maturity with a value greater than your principal amount plus the
final Contingent Coupon, if payable. In addition, if the notes are automatically redeemed, you will not receive a payment greater
than the principal amount plus the applicable Contingent Coupon, even if the Final Level exceeds the Call Level by a substantial
amount. Accordingly, your maximum return on the applicable notes is limited to the potential return represented by the Contingent
Coupons.
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Any decline in the closing level of the Reference Asset from the Valuation Date to the Maturity Date will reduce the value
of the Physical Delivery Amount. — If we deliver the Physical Delivery Amount on the Maturity Date instead of paying
the Cash Delivery Amount, the number of shares deliverable will be determined on the Valuation Date. The market value of the Physical
Delivery Amount on the Maturity Date may be less than the cash equivalent of such shares determined on the Valuation Date due to
any decline in the closing level of the Reference Asset during the period between the Valuation Date and the Maturity Date. Conversely,
if we pay the Cash Delivery Amount instead of delivering the Physical Delivery Amount on the Maturity Date, the Cash Delivery Amount
will be determined on the Valuation Date and the payment that you receive on the Maturity Date may be less than the market value
of such shares that you would have received had we instead delivered such shares due to fluctuations in their market value during
the period between the Valuation Date and the Maturity Date.
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Your return on the notes may be lower than the return on a conventional debt security of comparable maturity. —
The return that you will receive on your notes, which could be negative, may be less than the return you could earn on other investments.
The notes do not provide for fixed interest payments and you may not receive any Contingent Coupons over the term of the notes.
Even if you do receive one or more Contingent Coupons and your return on the notes is positive, your return may be less than the
return you would earn if you bought a conventional senior interest bearing debt security of ours with the same maturity or if you
invested directly in the Reference Asset. Your investment may not reflect the full opportunity cost to you when you take into account
factors that affect the time value of money.
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A higher Contingent Interest Rate or lower Trigger Level or Coupon Barrier Level may reflect greater expected volatility
of the Reference Asset, and greater expected volatility generally indicates an increased risk of loss at maturity. —
The economic terms for the notes, including the Contingent Interest Rate, Coupon Barrier Level and Trigger Level, are based, in
part, on the expected volatility of the Reference Asset at the time the terms of the notes are set. “Volatility” refers
to the frequency and magnitude of changes in the level of the Reference Asset. The greater the expected volatility of the Reference
Asset as of the Pricing Date, the greater the expectation is as of that date that the closing level of the Reference Asset could
be less than its Coupon Barrier Level on any Observation Date and that a Trigger Event could occur and, as a consequence, indicates
an increased risk of not receiving a Contingent Coupon and an increased risk of loss, respectively. All things being equal, this
greater expected volatility will generally be reflected in a higher Contingent Interest Rate than the yield payable on our conventional
debt securities with a similar maturity or on otherwise comparable securities, and/or a lower Trigger Level and/or Coupon Barrier
Level than those terms on otherwise comparable securities. Therefore, a relatively higher Contingent Interest Rate may indicate
an increased risk of loss. Further, a relatively lower Trigger Level and/or Coupon Barrier may not necessarily indicate that the
notes have a greater likelihood of a return of principal at maturity and/or paying Contingent Coupons. You should be willing to
accept the downside market risk of the Reference Asset and the potential to lose a significant portion or all of your initial investment.
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Your investment is subject to the credit risk of Bank of Montreal. — Our credit ratings and credit spreads may
adversely affect the market value of the notes. Investors are dependent on our ability to pay any amounts due on the notes, and
therefore investors are subject to our credit risk and to changes in the market’s view of our creditworthiness. Any decline
in our credit ratings or increase in the credit spreads charged by the market for taking our credit risk is likely to adversely
affect the value of the notes.
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Potential conflicts. — We and our affiliates play a variety of roles in connection with the issuance of the notes,
including acting as calculation agent. In performing these duties, the economic interests of the calculation agent and other affiliates
of ours are potentially adverse to your interests as an investor in the notes. We or one or more of our affiliates may also engage
in trading of shares of the Reference Asset on a regular basis as part of our general broker-dealer and other businesses, for proprietary
accounts, for other accounts under management or to facilitate transactions for our customers. Any of these activities could adversely
affect the level of the Reference Asset and, therefore, the market value of, and the payments on, the notes. We or one or more
of our affiliates may also issue or underwrite other securities or financial or derivative instruments with returns linked or related
to changes in the performance of the Reference Asset. By introducing competing products into the marketplace in this manner, we
or one or more of our affiliates could adversely affect the market value of the notes.
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Our initial estimated value of the notes is lower than the price to public. — Our initial estimated value of the
notes is only an estimate, and is based on a number of factors. The price to public of the notes exceeds our initial estimated
value, because costs associated with offering, structuring and hedging the notes are included in the price to public, but are not
included in the estimated value. These costs include any underwriting discount and selling concessions, the profits that we and
our affiliates expect to realize for assuming the risks in hedging our obligations under the notes and the estimated cost of hedging
these obligations.
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Our initial estimated value does not represent any future value of the notes, and may also differ from the estimated value
of any other party. — Our initial estimated value of the notes as of the Pricing Date was derived using our internal
pricing models. This value is based on market conditions and other relevant factors, which include volatility of the Reference
Asset, dividend rates and interest rates. Different pricing models and assumptions could provide values for the notes that are
greater than or less than our initial estimated value. In addition, market conditions and other relevant factors after the Pricing
Date are expected to change, possibly rapidly, and our assumptions may prove to be incorrect. After the Pricing Date, the value
of the notes could change dramatically due to changes in market conditions, our creditworthiness, and the other factors set forth
herein and in the product supplement. These changes are likely to impact the price, if any, at which we or BMOCM would be willing
to purchase the notes from you in any secondary market transactions. Our initial estimated value does not represent a minimum price
at which we or our affiliates would be willing to buy your notes in any secondary market at any time.
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The terms of the notes were not determined by reference to the credit spreads for our conventional fixed-rate debt.
— To determine the terms of the notes, we used an internal funding rate that represents a discount from the credit spreads
for our conventional fixed-rate debt. As a result, the terms of the notes are less favorable to you than if we had used a higher
funding rate.
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Certain costs are likely to adversely affect the value of the notes. — Absent any changes in market conditions,
any secondary market prices of the notes will likely be lower than the price to public. This is because any secondary market prices
will likely take into account our then-current market credit spreads, and because any secondary market prices are likely to exclude
all or a portion of any underwriting discount and selling concessions, and the hedging profits and estimated hedging costs that
are included in the price to public of the notes and that may be reflected on your account statements. In addition, any such price
is also likely to reflect a discount to account for costs associated with establishing or unwinding any related hedge transaction,
such as dealer discounts, mark-ups and other transaction costs. As a result, the price, if any, at which BMOCM or any other party
may be willing to purchase the notes from you in secondary market transactions, if at all, will likely be lower than the price
to public. Any sale that you make prior to the Maturity Date could result in a substantial loss to you.
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Owning the notes is not the same as owning shares of the Reference Asset or a security directly linked to the Reference
Asset. — The return on your notes will not reflect the return you would realize if you actually owned shares of the Reference
Asset or a security directly linked to the performance of the Reference Asset and held that investment for a similar period. Your
notes may trade quite differently from the Reference Asset. Changes in the level of the Reference Asset may not result in comparable
changes in the market value of your notes. Even if the level of the Reference Asset increases during the term of the notes, the
market value of the notes prior to maturity may not increase to the same extent. It is also possible for the market value of the
notes to decrease while the level of the Reference Asset increases. In addition, any dividends or other distributions paid on the
Reference Asset will not be reflected in the amount payable on the notes.
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You will not have any shareholder rights and will have no right to receive any shares of the Reference Asset —
Unless and until we chose to deliver shares of the Reference Asset at maturity, neither you nor any other holder or owner of the
notes will have any voting rights, any right to receive dividends or other distributions, or any other rights with respect to the
Reference Asset. You will have no rights with respect to any underlying securities.
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No delivery of shares of the Reference Asset. — We may chose, in our sole discretion, whether to deliver the
Physical Delivery Amount or pay the Cash Delivery Amount at maturity. You should not invest in the notes if you wish to elect whether
to receive cash or shares at maturity.
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Single equity risk. — The level of the Reference Asset can rise or fall sharply due to factors specific to the
Reference Asset and the issuer of the Reference Asset (the “Reference Asset Issuer”), such as stock price volatility,
earnings, financial conditions, corporate, industry and regulatory developments, management changes and decisions and other events,
as well as general market factors, such as general stock market volatility and levels, interest rates and economic and political
conditions. We urge you to review financial and other information filed periodically with the SEC by the Reference Asset Issuer.
We are not affiliated with the Reference Asset Issuer and are not responsible for the Reference Asset Issuer’s public disclosure
of information, whether contained in SEC filings or otherwise. We have not undertaken any independent review or due diligence of
the SEC filings of the Reference Asset Issuer or of any other publicly available information regarding the Reference Asset Issuer.
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Lack of liquidity. — The notes will not be listed on any securities exchange. BMOCM may offer to purchase the
notes in the secondary market, but is not required to do so. Even if there is a secondary market, it may not provide enough liquidity
to allow you to trade or sell the notes easily. Because other dealers are not likely to make a secondary market for the notes,
the price at which you may be able to trade the notes is likely to depend on the price, if any, at which BMOCM is willing to buy
the notes.
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Hedging and trading activities. — We or any of our affiliates may have carried out or may carry out hedging activities
related to the notes, including purchasing or selling shares of the Reference Asset, futures or options relating to the Reference
Asset or other derivative instruments with return liked or related to changes in the performance on the Reference Asset. We or
our affiliates may also trade in the Reference Asset, such securities, or instruments related to the Reference Asset from time
to time. Any of these hedging or trading activities on or prior to the Pricing Date and during the term of the notes could adversely
affect the payments on the notes.
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Many economic and market factors will influence the value of the notes. — In addition to the level of the Reference
Asset and interest rates on any trading day, the value of the notes will be affected by a number of economic and market factors
that may either offset or magnify each other, and which are described in more detail in the product supplement.
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You must rely on your own evaluation of the merits of an investment linked to the Reference Asset. — In the ordinary
course of their businesses, our affiliates from time to time may express views on expected movements in the level of the Reference
Asset. One or more of our affiliates have published, and in the future may publish, research reports that express views on the
Reference Asset. However, these views are subject to change from time to time. Moreover, other professionals who deal in the markets
relating to the Reference Asset at any time may have significantly different views from those of our affiliates. You are encouraged
to derive information concerning the Reference Asset from multiple sources, and you should not rely on the views expressed by our
affiliates.
Neither the offering of the notes nor any views which our affiliates from time to time may express in the ordinary course of their
businesses constitutes a recommendation as to the merits of an investment in the notes.
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Significant aspects of the tax treatment of the notes are uncertain. — The tax treatment of the notes is uncertain.
We do not plan to request a ruling from the Internal Revenue Service or from any Canadian authorities regarding the tax treatment
of the notes, and the Internal Revenue Service or a court may not agree with the tax treatment described herein.
The Internal Revenue Service has released a notice that may affect the taxation of holders of “prepaid forward contracts”
and similar instruments. According to the notice, the Internal Revenue Service and the U.S. Treasury are actively considering whether
the holder of such instruments should be required to accrue ordinary income on a current basis. While it is not clear whether the
notes would be viewed as similar to such instruments, it is possible that any future guidance could materially and adversely affect
the tax consequences of an investment in the notes, possibly with retroactive effect.
Please read carefully the section entitled “U.S. Federal Tax Information” herein, “Supplemental Tax Considerations–Supplemental
U.S. Federal Income Tax Considerations” in the accompanying product supplement, the section entitled “United States
Federal Income Taxation” in the accompanying prospectus and the section entitled “Certain Income Tax Consequences”
in the accompanying prospectus supplement. You should consult your tax advisor about your own tax situation.
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Examples of the Hypothetical Payment at Maturity for a $1,000
Investment in the Notes
The following table illustrates the hypothetical
payments on a note at maturity, assuming that the notes are not automatically redeemed. The hypothetical payments are based on
a $1,000 investment in the note, a hypothetical Initial Level of $100.00, a hypothetical Trigger Level of $75.00 (75.00% of the
hypothetical Initial Level), a hypothetical Call Level of $100.00 (100.00% of the hypothetical Initial Level), a range of hypothetical
Final Levels and the effect on the payment at maturity if (i) a Trigger Event occurs or (ii) if a Trigger Event does not occur.
The hypothetical examples shown below are
intended to help you understand the terms of the notes. If the notes are not automatically redeemed, the actual amount of cash
or shares that you will receive at maturity will depend upon whether the closing level of the Reference Asset is less than its
Trigger Level on any trading day during the Monitoring Period and the Final Level of the Reference Asset. If the notes are automatically
redeemed prior to maturity, the hypothetical examples below will not be relevant, and you will receive on the applicable Call Settlement
Date, for each $1,000 principal amount, the principal amount plus the applicable Contingent Coupon.
As discussed in more detail above, your total
return on the notes will also depend on the number of Contingent Coupon Dates on which the Contingent Coupon is payable. It is
possible that the only payments on your notes will be the payment, if any, due at maturity. The payment at maturity will not exceed
the principal amount, and may be significantly less.
Hypothetical Final Level
|
Hypothetical Final Level
Expressed as a Percentage of the
Initial Level
|
Payment at Maturity Assuming a
Trigger Event Has Not Occurred
(Excluding Coupons)*
|
Payment at Maturity Assuming a
Trigger Event Has Occurred
(Excluding Coupons)
|
$200.00
|
200.00%
|
$1000.00
|
$1000.00
|
$180.00
|
180.00%
|
$1000.00
|
$1000.00
|
$160.00
|
160.00%
|
$1000.00
|
$1000.00
|
$140.00
|
140.00%
|
$1000.00
|
$1000.00
|
$120.00
|
120.00%
|
$1000.00
|
$1000.00
|
$100.00
|
100.00%
|
$1000.00
|
$1000.00
|
$90.00
|
90.00%
|
$1000.00
|
$900.00
|
$80.00
|
80.00%
|
$1000.00
|
$800.00
|
$75.00
|
75.00%
|
$1000.00
|
$750.00
|
$74.99
|
74.99%
|
-
|
$749.90
|
$60.00
|
60.00%
|
-
|
$600.00
|
$40.00
|
40.00%
|
-
|
$400.00
|
$20.00
|
20.00%
|
-
|
$200.00
|
$0.00
|
0.00%
|
-
|
$0.00
|
* Represents the cash value of the Physical Delivery Amount on
the Valuation Date. We may elect to deliver either the Physical Delivery Amount or the Cash Delivery Amount. If we elect to deliver
the Physical Delivery Amount, the actual value received and your total return on the notes on the Maturity Date will depend on
the value of the Reference Asset on the Maturity Date.
U.S. Federal Tax Information
By purchasing the notes, each holder agrees (in the absence of
a change in law, an administrative determination or a judicial ruling to the contrary) to treat each note as a pre-paid contingent
income-bearing derivative contract for U.S. federal income tax purposes. However, the U.S. federal income tax consequences of your
investment in the notes are uncertain and the Internal Revenue Service could assert that the notes should be taxed in a manner
that is different from that described in the preceding sentence. Please see the discussion (including the opinion of our counsel
Mayer Brown LLP) in the product supplement dated October 21, 2019 under “Supplemental Tax Considerations—Supplemental
U.S. Federal Income Tax Considerations,” which applies to the notes.
Supplemental Plan of Distribution (Conflicts of Interest)
BMOCM will purchase the notes from us at
a purchase price reflecting the commission set forth on the cover hereof. BMOCM has informed us that, as part of its distribution
of the notes, it will reoffer the notes to other dealers who will sell them. Each such dealer, or each additional dealer engaged
by a dealer to whom BMOCM reoffers the notes, will receive a commission from BMOCM, which will not exceed the commission set forth
on the cover page.
We will deliver the notes on a date that
is greater than two business days following the pricing date. Under Rule 15c6-1 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), trades in the secondary market generally are required to settle in two business days, unless
the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the notes more than two business
days prior to the issue date will be required to specify alternative settlement arrangements to prevent a failed settlement.
We own, directly or indirectly, all of the
outstanding equity securities of BMOCM, the agent for this offering. In accordance with FINRA Rule 5121, BMOCM may not make sales
in this offering to any of its discretionary accounts without the prior written approval of the customer.
You should not construe the offering of the
notes as a recommendation of the merits of acquiring an investment linked to the Reference Asset or as to the suitability of an
investment in the notes.
BMOCM may, but is not obligated to, make
a market in the notes. BMOCM will determine any secondary market prices that it is prepared to offer in its sole discretion.
We may use this pricing supplement in the
initial sale of the notes. In addition, BMOCM or another of our affiliates may use this pricing supplement in market-making transactions
in any notes after their initial sale. Unless BMOCM or we inform you otherwise in the confirmation of sale, this pricing supplement
is being used by BMOCM in a market-making transaction.
For a period of approximately three months
following issuance of the notes, the price, if any, at which we or our affiliates would be willing to buy the notes from investors,
and the value that BMOCM may also publish for the notes through one or more financial information vendors and which could be indicated
for the notes on any brokerage account statements, will reflect a temporary upward adjustment from our estimated value of the notes
that would otherwise be determined and applicable at that time. This temporary upward adjustment represents a portion of (a) the
hedging profit that we or our affiliates expect to realize over the term of the notes and (b) any underwriting discount and the
selling concessions paid in connection with this offering. The amount of this temporary upward adjustment will decline to zero
on a straight-line basis over the three-month period.
Additional Information Relating to the Estimated Initial Value
of the Notes
Our estimated initial value of the notes
on the Pricing Date that is set forth on the cover page hereof equals the sum of the values of the following hypothetical components:
|
·
|
a fixed-income debt component with the same tenor as the notes, valued using our internal funding rate for structured notes;
and
|
|
·
|
one or more derivative transactions relating to the economic terms of the notes.
|
The internal funding rate used in the determination
of the initial estimated value generally represents a discount from the credit spreads for our conventional fixed-rate debt. The
value of these derivative transactions are derived from our internal pricing models. These models are based on factors such as
the traded market prices of comparable derivative instruments and on other inputs, which include volatility, dividend rates, interest
rates and other factors. As a result, the estimated initial value of the notes on the Pricing Date was determined based on the
market conditions on the Pricing Date.
The Reference Asset
We have derived the following information
from publicly available documents. We have not independently verified the accuracy or completeness of the following information.
We are not affiliated with the Reference Asset Issuer and the Reference Asset Issuer will have no obligations with respect to the
notes. This document relates only to the notes and does not relate to the shares of the Reference Asset. Neither we nor any of
our affiliates participates in the preparation of the publicly available documents described below. Neither we nor any of our affiliates
has made any due diligence inquiry with respect to the Reference Asset in connection with the offering of the notes. There can
be no assurance that all events occurring prior to the date hereof, including events that would affect the accuracy or completeness
of the publicly available documents described below and that would affect the trading price of the shares of the Reference Asset,
have been or will be publicly disclosed. Subsequent disclosure of any events or the disclosure of or failure to disclose material
future events concerning the Reference Asset could affect the price of the shares of the Reference Asset on any trading day during
the Monitoring Period, each Observation Date and on the Valuation Date, and therefore could affect the payments on the notes.
The selection of the Reference Asset is not
a recommendation to buy or sell the shares of the Reference Asset. Neither we nor any of our affiliates make any representation
to you as to the performance of the shares of the Reference Asset. Information provided to or filed with the SEC under the Exchange
Act and the Investment Company Act of 1940 relating to the Reference Asset may be obtained through the SEC’s website at http://www.sec.gov.
Citigroup Inc. is a financial services holding
company whose businesses provide financial products and services. Information filed by the Reference Asset Issuer with the SEC
can be located by reference to its SEC file number: 001-09924, or its CIK Code: 0000831001. Its common stock is listed on the New
York Stock Exchange under the ticker symbol “C”.
Validity of the Notes
In the opinion of Osler, Hoskin & Harcourt
LLP, the issue and sale of the notes has been duly authorized by all necessary corporate action of the Bank in conformity with
the Senior Indenture, and when this pricing supplement has been attached to, and duly notated on, the master note that represents
the notes, the notes will have been validly executed and issued and, to the extent validity of the notes is a matter governed by
the laws of the Province of Ontario, or the laws of Canada applicable therein, and will be valid obligations of the Bank, subject
to the following limitations (i) the enforceability of the Senior Indenture may be limited by the Canada Deposit Insurance Corporation
Act (Canada), the Winding-up and Restructuring Act (Canada) and bankruptcy, insolvency, reorganization, receivership, moratorium,
arrangement or winding-up laws or other similar laws affecting the enforcement of creditors' rights generally; (ii) the enforceability
of the Senior Indenture may be limited by equitable principles, including the principle that equitable remedies such as specific
performance and injunction may only be granted in the discretion of a court of competent jurisdiction; (iii) pursuant to the Currency
Act (Canada) a judgment by a Canadian court must be awarded in Canadian currency and that such judgment may be based on a rate
of exchange in existence on a day other than the day of payment; and (iv) the enforceability of the Senior Indenture will be subject
to the limitations contained in the Limitations Act, 2002 (Ontario), and such counsel expresses no opinion as to whether a court
may find any provision of the Senior Debt Indenture to be unenforceable as an attempt to vary or exclude a limitation period under
that Act. This opinion is given as of the date hereof and is limited to the laws of the Provinces of Ontario and the federal laws
of Canada applicable thereto. In addition, this opinion is subject to customary assumptions about the trustee's authorization,
execution and delivery of the Indenture and the genuineness of signatures and certain factual matters, all as stated in the letter
of such counsel dated September 23, 2018, which has been filed as Exhibit 5.3 to Bank of Montreal's Form 6-K filed with the SEC
and dated September 23, 2018.
In the opinion of Mayer Brown LLP, when
this pricing supplement has been attached to, and duly notated on, the master note that represents the notes, and the notes have
been issued and sold as contemplated herein, the notes will be valid, binding and enforceable obligations of Bank of Montreal,
entitled to the benefits of the Senior Indenture, subject to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally, concepts of reasonableness and equitable principles of general applicability (including, without limitation,
concepts of good faith, fair dealing and the lack of bad faith). This opinion is given as of the date hereof and is limited to
the laws of the State of New York. Insofar as this opinion involves matters governed by the laws of the Province of Ontario or
the laws of Canada applicable therein, Mayer Brown LLP has assumed, without independent inquiry or investigation, the validity
of the matters opined on by Osler, Hoskin & Harcourt LLP, Canadian legal counsel for the issuer, in its opinion expressed
above. This opinion is subject to customary assumptions about the trustee's authorization, execution and delivery of the Senior
Indenture and the genuineness of signatures and to such counsel's reliance on Bank of Montreal and other sources as to certain
factual matters, all as stated in the legal opinion of Mayer Brown LLP dated October 21, 2019 filed with the SEC as an exhibit
to a Current Report on Form 6-K on October 21, 2019.
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