Pricing Supplement
dated May 10, 2023 to the Prospectus Supplement and Prospectus, each dated May 26, 2022
US$3,000,000
Senior Medium-Term
Notes, Series I
Redeemable Fixed Coupon
Notes, Due May 12, 2025
Issuer: |
Bank of Montreal |
Title of Notes: |
Redeemable Fixed Coupon Notes, due May 12, 2025 (the “Notes”) |
Trade Date: |
May 10, 2023 |
Settlement Date (Original Issue
Date): |
May 12, 2023 |
Stated Maturity: |
May 12, 2025, subject to our early redemption right, as described under “Specific Terms of the Notes — Optional Redemption Feature” below. |
Principal Amount (in Specified
Currency): |
US$3,000,000; Minimum Denomination: US$1,000 and integral multiples of US$1,000 in excess of $1,000. |
Original Public Offering Price
(Issue Price): |
100% |
Interest Rate per Annum: |
The Notes will bear interest at a rate equal to 5.30% per annum. |
Interest Payment Period: |
Semi-annually. |
Interest Payment Dates: |
Interest is payable in arrears on May 12 and November 12 of each year, commencing November 12, 2023 to and including the maturity date (subject to postponement if such a day is not a business day). See “Specific Terms of the Notes — Interest” below. |
Payment at Maturity: |
Subject to our credit risk, you will receive at maturity the principal amount and the final interest payment. |
Clearance and Settlement: |
DTC global (including through its indirect participants Euroclear and Clearstream, as described under “Description of Debt Securities We May Offer – Legal Ownership and Book-Entry Issuance” in the accompanying prospectus). |
CUSIP No.: |
06374VKG0 |
Optional Redemption
Provision: |
We may, at our option, elect to redeem the Notes in whole or in part on February 12, May 12, August 12 and November 12 of each year, commencing November 12, 2023 to and including February 12, 2025 (each such date, a “Redemption Date”), at 100% of their principal amount plus accrued and unpaid interest to but excluding the date on which the Notes are redeemed. In the event we elect to redeem the Notes, notice will be given to registered holders not more than 30 business days nor less than five business days prior to the Redemption Date. See “Specific Terms of the Notes — Optional Redemption Feature” below. |
Bail-inable Notes: |
The Notes will be bail-inable notes (as defined in the accompanying prospectus supplement and subject to conversion in whole or in part — by means of a transaction or series of transactions and in one or more steps — into common shares of Bank of Montreal or any of its affiliates under subsection 39.2(2.3) of the Canada Deposit Insurance Corporation Act (the “CDIC Act”) and to variation or extinguishment in consequence, and subject to the application of the laws of the Province of Ontario and the federal laws of Canada applicable therein in respect of the operation of the CDIC Act with respect to the Notes. |
We urge you to read this pricing supplement together
with the prospectus supplement and prospectus. You may access these documents on the SEC website at www.sec.gov as follows (or if that
address has changed, by reviewing our filings for the relevant date on the SEC website):
Investing in the
Notes involves risks, including those described in the “Risk Factors” section beginning on page S-2 of the accompanying
prospectus supplement and on page 8 of the accompanying prospectus. In particular, please note that all payments on the Notes are
subject to our credit risk.
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 pricing 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.
We will deliver the
Notes through the facilities of The Depository Trust Company on May 12, 2023.
We may use this pricing
supplement in the initial sale of Notes. In addition, BMO Capital Markets Corp. (“BMOCM”) or another of our affiliates may
use this pricing supplement in market-making transactions in any Notes after their initial sale. Unless our agent or we inform you
otherwise in the confirmation of sale, this pricing supplement is being used in a market-making transaction.
The
public offering price will include accrued interest from May 12, 2023, if settlement occurs after that date. The agents set forth below
will purchase the Notes from us on the settlement date at a price equal to 99.60% of the principal amount. Certain dealers who purchase
the Notes for sale to certain fee-based advisory accounts and/or eligible institutional investors may forgo some or all of their selling
concessions, fees or commissions. The price to public for investors purchasing the Notes in these accounts and/or for an eligible institutional
investor may be as low as $996.00 (99.60%) per $1,000 in principal amount of the Notes. See “Supplemental Plan of Distribution”
in this pricing
supplement.
BMO Capital Markets Citigroup Global Markets
SPECIFIC TERMS OF THE NOTES
The Notes are part of a series
of our senior debt securities called Senior Medium-Term Notes, Series I, and therefore, this pricing supplement (the “pricing supplement”),
should be read together with the accompanying prospectus supplement and prospectus, each dated May 26, 2022. Terms used but not defined
in this pricing supplement have the meanings given them in the accompanying prospectus or accompanying prospectus supplement, unless the
context requires otherwise.
In this section, references to
“holders” mean those who own the Notes registered in their own names, on the books that we or the trustee maintain for this
purpose, and not those who own beneficial interests in the Notes registered in street name or in the Notes issued in book-entry form through
The Depository Trust Company or another depositary. Owners of beneficial interests in the Notes should read the section entitled
“Description of the Notes We May Offer — Legal Ownership” in the accompanying prospectus supplement and “Description
of Debt Securities We May Offer — Legal Ownership and Book-Entry Issuance” in the accompanying prospectus.
The Notes are part of a series
of senior debt securities entitled “Senior Medium-Term Notes, Series I” (the “medium-term notes”) that we
may issue from time to time under the senior indenture, dated January 25, 2010, as amended and supplemented to date, between Bank of Montreal
and The Bank of New York Mellon, as trustee. This pricing supplement summarizes specific financial and other terms that apply to the Notes.
Terms that apply generally to our medium-term notes are described in “Description of the Notes We May Offer” in the accompanying
prospectus supplement. The terms described herein supplement those described in the accompanying prospectus and the accompanying prospectus
supplement, and, if the terms described here are inconsistent with those described in those documents, the terms described herein are
controlling.
The Notes are bail-inable notes
(as defined in the accompanying prospectus supplement) and subject to conversion in whole or in part – by means of a transaction
or series of transactions and in one or more steps – into common shares of Bank of Montreal or any of its affiliates under subsection
39.2(2.3) of the Canada Deposit Insurance Corporation Act (the “CDIC Act”) and to variation or extinguishment in consequence,
and subject to the application of the laws of the Province of Ontario and the federal laws of Canada applicable therein in respect of
the operation of the CDIC Act with respect to the Notes.
Please note that the information
about the price to the public and the net proceeds to Bank of Montreal on the front cover of this pricing supplement relates only to the
initial sale of the Notes. If you have purchased the Notes in a market-making transaction after the initial sale, information about the
price and date of sale to you will be provided in a separate confirmation of sale.
We describe particular terms
of the Notes in more detail below.
Interest
The Notes will bear interest
at the rate set forth on the cover page.
Interest will be paid
on the Interest Payment Dates set forth on the cover page of this pricing supplement. Interest payments will be calculated on the basis
of a 360-day year, consisting of twelve 30-day months. Interest will be payable to holders of record on the 3rd business day before each
Interest Payment Date. Interest will accrue from and including each Interest Payment Date to but excluding the next Interest Payment Date.
In the event that an Interest Payment Date, Redemption Date or the Stated Maturity falls on a day other than a business day, principal
and/or interest will be paid on the next succeeding business day and no interest on such payment shall accrue for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to such next succeeding business day.
Optional Redemption Feature
We may, at our option, elect
to redeem the Notes in whole or in part on each Redemption Date (as defined above), at 100% of their principal amount plus accrued and
unpaid interest to but excluding the date on which the Notes are redeemed. In the event we elect to redeem the Notes, notice will be given
to registered holders not more than 30 nor less than five business days prior to the Redemption Date.
Agreement with Respect to
the Exercise of Canadian Bail-in Powers
By its acquisition
of an interest in any Note, each holder or beneficial owner of that Note is deemed to (i) agree to be bound, in respect of that Note,
by the CDIC Act, including the conversion of that Note, in whole or in part – by means of a transaction or series of transactions
and in one or more steps – into common shares of Bank of Montreal or any of its affiliates under subsection 39.2(2.3) of the CDIC
Act and the variation or extinguishment of that Note in consequence, and by the application of the laws of the Province of Ontario and
the federal laws of Canada applicable therein in respect of the operation of the CDIC Act with respect to that Note; (ii) attorn and submit
to the jurisdiction of the courts in the Province of Ontario with respect to the CDIC Act and those laws; (iii) (iii) have represented
and warranted that Bank of Montreal has not directly or indirectly provided financing to the holder or beneficial owner of the Notes for
the express purpose of investing in the Notes and (iv) acknowledge and agree that the terms referred to in paragraphs (i) and (ii), above,
are binding on that holder or beneficial owner despite any provisions in the indenture or that Note, any other law that governs that Note
and any other agreement, arrangement or understanding between that holder or beneficial owner and Bank of Montreal with respect to that
Note.
Holders and beneficial
owners of any Note will have no further rights in respect of that Note to the extent that Note is converted in a bail-in conversion, other
than those provided under the bail-in regime, and by its acquisition of an interest in any Note, each holder or beneficial owner of that
Note is deemed to irrevocably consent to the converted portion of the principal amount of that Note and any accrued and unpaid interest
thereon being deemed paid in full by Bank of Montreal by the issuance of common shares of Bank of Montreal (or, if applicable, any of
its affiliates) upon the occurrence of a bail-in conversion, which bail-in conversion will occur without any further action on the part
of that holder or beneficial owner or the trustee; provided that, for the avoidance of doubt, this consent will not limit or otherwise
affect any rights that holders or beneficial owners may have under the bail-in regime.
See “Description
of the Notes We May Offer — Special Provisions Related to Bail-inable Notes” in the accompanying prospectus supplement for
a description of provisions applicable to the Notes as a result of Canadian bail-in powers.
Certain Investment Considerations
Optional Redemption. Prospective
purchasers should be aware that we have the right to redeem the Notes on any Redemption Date, beginning on the first Redemption Date.
It is more likely that we will redeem the Notes prior to their stated maturity date to the extent that the interest payable on the Notes
is greater than the interest that would be payable on other instruments of the issuer of a comparable maturity, terms and credit rating
trading in the market. If the Notes are redeemed prior to their stated maturity date, you may have to re-invest the proceeds in a lower
interest rate environment. See “—Optional Redemption Feature.”
Credit Risk. Our
credit ratings and credit spreads may adversely affect the market value of the Notes. Investors are dependent on our ability to pay all
amounts due on the Notes on each interest payment date and at maturity, 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.
Fees and Hedging
Costs. While the payment at maturity described in this pricing supplement is based on the full principal amount of your Notes, the
original offering price of the Notes includes the commission received by the agents and other dealers and the cost of hedging our obligations
under the Notes. As a result, the price, if any, at which any agent may be willing to purchase Notes from you in secondary market transactions
will likely be lower than the price you paid for your Notes, and any sale prior to the maturity date could result in a substantial loss
to you.
SUPPLEMENTAL TAX CONSIDERATIONS
The following is a general
description of material tax considerations relating to the Notes. It does not purport to be a complete analysis of all tax considerations
relating to the Notes. Prospective purchasers of the Notes should consult their tax advisers as to the consequences under the tax laws
of the country of which they are resident for tax purposes and the tax laws of Canada and the U.S. of acquiring, holding and disposing
of the Notes and receiving payments under the Notes. This summary is based upon the law as in effect on the date of this pricing supplement
and is subject to any change in law that may take effect after such date.
Supplemental Canadian Tax Considerations
In the opinion of Torys LLP, our Canadian federal
income tax counsel, the following summary describes the principal Canadian federal income tax considerations generally applicable to a
purchaser who acquires from us as the beneficial owner Notes offered by this document, and who, at all relevant times, for purposes of
the Income Tax Act (Canada) and the Income Tax Regulations (collectively, the “Tax Act”), (1) is not, and is not deemed to
be, resident in Canada, (2) deals at arm’s length with us and with any transferee resident (or deemed to be resident) in Canada
to whom the purchaser disposes of Notes, (3) is not affiliated with us, (4) does not receive any payment of interest on a Note in respect
of a debt or other obligation to pay an amount to a person with whom we do not deal at arm’s length, (5) acquires and holds Notes
and any common shares acquired on a bail-in conversion as capital property, (6) does not use or hold Notes or any common shares acquired
on a bail-in conversion in a business carried on in Canada and (7) is not a “specified shareholder” of ours as defined in
the Tax Act for this purpose or a non-resident person not dealing at arm’s length with such “specified shareholder”
(a “Non-Resident Holder”). Special rules, which are not discussed in this summary, may apply to a Non-Resident Holder that
is an insurer that carries on an insurance business in Canada and elsewhere.
This summary does not address the possible application
of the “hybrid mismatch arrangement” rules contained in proposals to amend the Tax Act released by the Minister of Finance
(Canada) on April 29, 2022 (the “Hybrid Mismatch Proposals”) to a Non-Resident Holder (i) that disposes of a Note to a person
or entity with which it does not deal at arm’s length or to an entity that is a “specified entity” (as defined in the
Hybrid Mismatch Proposals) with respect to the Non-Resident Holder or in respect of which the Non-Resident Holder is a “specified
entity”, (ii) that disposes of a Note under, or in connection with, a “structured arrangement” (as defined in such Hybrid
Mismatch Proposals), or (iii) in respect of which we are a “specified entity”. Such Non-Resident Holders should consult their
own tax advisors.
This summary is based on the current provisions
of the Tax Act and on counsel’s understanding of the current administrative policies and assessing practices of the Canada Revenue
Agency published in writing prior to the date hereof. This summary takes into account all specific proposals to amend the Tax Act publicly
announced by or on behalf of the Minister of Finance (Canada) prior to the date of this document (the “Proposed Amendments”),
including the Hybrid Mismatch Proposals, and assumes that all Proposed Amendments will be enacted in the form proposed. However, no assurances
can be given that the Proposed Amendments will be enacted as proposed, or at all. This summary does not otherwise take into account or
anticipate any changes in law or administrative policy or assessing practice whether by legislative, administrative or judicial action
nor does it take into account tax legislation or considerations of any province, territory or foreign jurisdiction, which may differ from
those discussed herein.
This summary is of a general nature only and is
not, and is not intended to be, legal or tax advice to any particular holder. This summary is not exhaustive of all Canadian federal income
tax considerations. Accordingly, prospective purchasers of the Notes should consult their own tax advisors having regard to their own
particular circumstances.
Currency Conversion
Generally, for purposes of the Tax Act, all amounts
relating to the acquisition, holding or disposition of a Note must generally be expressed in Canadian dollars using the appropriate exchange
rate determined in accordance with the detailed rules in the Tax Act in that regard. As a result, the amounts, if any, subject to withholding
tax and any capital gains or capital losses realized by a Non-Resident Holder may be affected by fluctuations in the value of the U.S.
dollar relative to the Canadian dollar.
Notes
Interest paid or credited or deemed to be paid
or credited by us on a Note (including amounts on account or in lieu of payment of, or in satisfaction of interest) to a Non-Resident
Holder generally will not be subject to Canadian non-resident withholding tax, unless any portion of such interest (other than on a “prescribed
obligation,” as defined in the Tax Act for this purpose) is contingent or dependent on the use of or production from property in
Canada or is computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends
paid or payable to shareholders of any class or series of shares of the capital stock of a corporation. The administrative policy of the
Canada Revenue Agency is that interest paid on a debt obligation is not subject to withholding tax unless, in general, it is reasonable
to consider that there is a material connection between the index or formula to which any amount payable under the debt obligation is
calculated and the profits of the issuer. With respect to any interest on a Note, or any portion of the principal amount of a Note in
excess of the issue price, such interest or principal, as the case may be, paid or credited to a Non-Resident Holder should not be subject
to Canadian non-resident withholding tax.
In the event that a Note, interest on which is
not exempt from Canadian non-resident withholding tax (other than a Note which is an “excluded obligation,” as defined in the
Tax Act for this purpose) is redeemed in whole or in part, cancelled, repurchased or purchased by us or any other person resident or deemed
to be resident in Canada from a Non-Resident Holder or is otherwise assigned or transferred by a Non-Resident Holder to a person resident
or deemed to be resident in Canada for an amount which exceeds, generally, the issue price thereof, or in certain cases, the price for
which such Note was assigned or transferred to the Non-Resident Holder by a person resident or deemed to be resident in Canada, the excess
may be deemed to be interest and may, together with any interest that has accrued on the Note to that time, be subject to Canadian non-resident
withholding tax. Such excess will not be subject to Canadian non-resident withholding tax if the Note is an “excluded obligation”
for purposes of the Tax Act.
In the event that a Note held by a Non-Resident
Holder is converted to common shares on a bail-in conversion, the amount, if any, by which the fair market value of the common shares
received on the conversion exceeds the sum of: (i) the price for which the Note was issued, and (ii) any amount that is paid in respect
of accrued and unpaid interest on the Note at the time of the conversion, may be deemed to be interest paid to the Non-Resident Holder.
There is a risk that the excess, if any, and the amount of interest described in item (ii) of the preceding sentence could be characterized
as “participating debt interest” and be subject to Canadian non-resident withholding tax unless certain exceptions apply.
If an amount of interest paid by us on a Note were
to be non-deductible by us in computing our income as a result of the application of proposed subsection 18.4(4) of the Tax Act, such
amount of interest would be deemed to have been paid by us as a dividend, and not to have been paid by us as interest, and be subject
to Canadian non-resident withholding tax. Proposed subsection 18.4(4) would apply only if a payment of interest by us on a Note constituted
the deduction component of a “hybrid mismatch arrangement” under which the payment arises within the meaning of proposed paragraph
18.4(3)(b) of the Tax Act.
No payment of interest by us on a Note should be
considered to arise under a “hybrid mismatch arrangement” as no such payment should be considered to arise under or in connection
with a “structured arrangement”, both as defined in proposed subsection 18.4(1) of the Tax Act, on the basis that (i) based
on pricing data and analysis provided to Torys LLP by us in relation to these Notes, it should not be reasonable to consider that any
economic benefit arising from any “deduction/non-inclusion mismatch” as defined in proposed subsection 18.4(6) of the Tax
Act is reflected in the pricing of the Notes, and (ii) it should also not be reasonable to consider that the Notes were designed to, directly
or indirectly, give rise to any “deduction/non-inclusion mismatch”.
Generally, there are no other taxes on income (including
taxable capital gains) payable by a Non-Resident Holder on interest, discount, or premium in respect of a Note or on the proceeds received
by a Non-Resident Holder on the disposition of a Note (including redemption, cancellation, purchase or repurchase).
Common Shares Acquired on a Bail-in
Conversion
Dividends paid or credited, or deemed
under the Act to be paid or credited, to a Non-Resident Holder on common shares of the issuer or any affiliate of the issuer that is a
corporation that is resident or deemed to be resident in Canada for purposes of the Tax Act acquired by the Non-Resident Holder on a bail-in
conversion will generally be subject to Canadian non-resident withholding tax at the rate of 25% on the gross amount of such dividends
unless the rate is reduced under the provisions of an applicable income tax treaty or convention between Canada and the country of residence
of the Non-Resident Holder.
A Non-Resident Holder will not be subject
to tax under the Tax Act in respect of any capital gain realized on a disposition or deemed disposition of a common share of the issuer
or any affiliate of the issuer acquired by the Non-Resident Holder on a bail-in conversion unless such common share is, or is deemed to
be, “taxable Canadian property” of the Non-Resident Holder for the purposes of the Tax Act and the Non-Resident Holder is
not entitled to an exemption under an applicable income tax convention between Canada and the country in which the Non-Resident Holder
is resident.
Generally, common shares of the issuer or any affiliate
of the issuer acquired by a Non-Resident Holder on a bail-in conversion will not constitute taxable Canadian property of a Non-Resident
Holder at a particular time provided that such common shares are listed at that time on a designated stock exchange (which includes the
Toronto Stock Exchange), unless at any particular time during the 60-month period that ends at that time (1) the Non-Resident Holder,
persons with whom the Non-Resident Holder does not deal with at arm’s length, and partnerships in which the Non-Resident Holder
or persons with whom the Non-Resident Holder does not deal at arm’s length holds a membership interest directly or indirectly through
one or more partnerships, or the Non-Resident Holder together with all such persons and partnerships, owned 25% or more of the issued
shares of any class or series of the applicable issuer’s capital stock and (2) more than 50% of the fair market value of such common
shares was derived directly or indirectly from one or any combination of: (i) real or immovable properties situated in Canada, (ii) “Canadian
resource properties” (as defined in the Tax Act), (iii) “timber resource properties” (as defined in the Tax Act), and
(iv) options in respect of, or interests in, or for civil law rights in, property in any of the foregoing whether or not the property
exists. Notwithstanding the foregoing, in certain circumstances set out in the Tax Act, such common shares could be deemed to be taxable
Canadian property. Non-Resident Holders for whom common shares acquired on a bail-in conversion may constitute taxable Canadian property
should consult their own tax advisors.
Supplemental U.S. Tax Considerations
The following section supplements
the discussion of U.S. federal income taxation in the accompanying prospectus and prospectus supplement with respect to United States
holders (as defined in the accompanying prospectus). It applies only to those United States holders who are not excluded from the discussion
of U.S. federal income taxation in the accompanying prospectus. It does not apply to holders subject to special rules including holders
subject to Section 451(b) of the Code. For purposes of this discussion, any interest with respect to the Notes, as determined for U.S.
federal income tax purposes, will be treated as from sources outside the United States.
You should consult your tax advisor concerning
the U.S. federal income tax and other tax consequences of your investment in the Notes in your particular circumstances, including the
application of state, local or other tax laws and the possible effects of changes in federal or other tax laws.
Backup Withholding and Information Reporting
Please see the discussion under “United States
Federal Income Taxation — Other Considerations — Backup Withholding and Information Reporting” in the accompanying prospectus
for a description of the applicability of the backup withholding and information reporting rules to payments made on your Notes.
Foreign Account Tax Compliance Act
The Foreign Account Tax Compliance Act
imposes a 30% U.S. withholding tax on certain U.S. source payments, including interest (and OID), dividends, other fixed or determinable
annual or periodical gain, profits, and income (“Withholdable Payments”), if paid to a foreign financial institution (including
amounts paid to a foreign financial institution on behalf of a holder), unless such institution enters into an agreement with the Treasury
Department to collect and provide to the Treasury Department substantial information regarding U.S. account holders, including certain
account holders that are foreign entities with U.S. owners, with such institution. A Note may constitute an account for these purposes.
The legislation also generally imposes a withholding tax of 30% on Withholdable Payments made to a non-financial foreign entity unless
such entity provides the withholding agent with a certification that it does not have any substantial U.S. owners or a certification identifying
the direct and indirect substantial U.S. owners of the entity.
The U.S. Treasury Department has proposed regulations
that eliminate the requirement of the Foreign Account Tax Compliance Act withholding on payments of gross proceeds upon the sale or disposition
of financial instruments. The U.S. Treasury Department has indicated that taxpayers may rely on these proposed regulations pending their
finalization, and the discussion above assumes the proposed regulations will be finalized in their proposed form with retroactive effect.
If we (or an applicable withholding agent) determine
withholding is appropriate with respect to the Notes, we (or such agent) will withhold tax at the applicable statutory rate, and we will
not pay any additional amounts in respect of such withholding. Account holders subject to information reporting requirements pursuant
to the Foreign Account Tax Compliance Act may include holders of the Notes. Foreign financial institutions and non-financial foreign entities
located in jurisdictions that have an intergovernmental agreement with the United States governing the Foreign Account Tax Compliance
Act may be subject to different rules. Holders are urged to consult with their own tax advisors regarding the possible implications of
this legislation on their investment in the Notes.
EMPLOYEE RETIREMENT
INCOME SECURITY ACT
A fiduciary of a pension,
profit-sharing or other employee benefit plan subject to the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”)
(each, a “Plan”), should consider the fiduciary standards of ERISA in the context of the Plan’s particular circumstances
before authorizing an investment in the Notes. Among other factors, the fiduciary should consider whether the investment would satisfy
the prudence and diversification requirements of ERISA and would be consistent with the documents and instruments governing the Plan,
and whether the investment would involve a prohibited transaction under ERISA or the U.S. Internal Revenue Code (the “Code”).
Please see the section of the prospectus, "Employee Retirement Income Security Act."
SUPPLEMENTAL PLAN OF DISTRIBUTION (CONFLICTS
OF INTEREST)
The agents will purchase
the Notes from us on the settlement date at prices as specified on the cover page of this pricing supplement. Each of the agents have
informed us that, as part of its distribution of the Notes, it will reoffer the Notes to other dealers who will sell them at the prices
set forth on the cover page of this document. Each such dealer, or further dealer engaged by a dealer to whom an agent reoffers the Notes,
will purchase the Notes at an agreed discount to the initial offering price.
We own, directly or
indirectly, all of the outstanding equity securities of BMOCM, which is an 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 any of the Notes as a recommendation 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.
Each of the agents
and any other broker-dealer offering the Notes have not offered, sold or otherwise made available and will not offer, sell or otherwise
make available any of the Notes to, any retail investor in the European Economic Area (“EEA”). For these purposes, the expression
“offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the
Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, and a “retail investor” means
a person who is one (or more) of: (a) a retail client, as defined in point (11) of Article 4(1) of Directive (EU) 2014/65 (as amended,
“MiFID II”); or (b) a customer, within the meaning of Directive (EU) 2016/97, as amended, where that customer would not qualify
as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (c) not a qualified investor as defined in Regulation
(EU) No 2017/1129 (the “Prospectus Regulation”). Consequently, no key information document required by Regulation (EU) No
1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the Notes or otherwise making them available to retail
investors in the EEA has been prepared, and therefore, offering or selling the Notes or otherwise making them available to any retail
investor in the EEA may be unlawful under the PRIIPs Regulation.
Each of the agents
and any other broker-dealer offering the Notes have not offered, sold or otherwise made available and will not offer, sell or otherwise
make available any of the Notes to, any retail investor in the United Kingdom. For these purposes, a retail investor means a person who
is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic
law by virtue of the European Union (Withdrawal) Act 2018; or (ii) a customer within the meaning of the provisions of the Financial Services
and Markets Act 2000 (the "FSMA") and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where
that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it
forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018. Consequently, no key information document required by
Regulation (EU) No 1286/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the "UK PRIIPs
Regulation") for offering or selling the Notes or otherwise making them available to retail investors in the UK has been prepared
and therefore offering or selling the Notes or otherwise making them available to any retail investor in the UK may be unlawful under
the UK PRIIPs Regulation.
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, authenticated, issued and delivered, to the extent that validity of the Notes is
a matter governed by the laws of the Province of Ontario and the federal 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 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 therein.
In addition, this opinion is subject to certain assumptions about (i) the Trustees’ authorization, execution and delivery of the
senior indenture, (ii) the genuineness of signatures and (iii) certain other matters, all as stated in the letter of such counsel dated
May 26, 2022, which has been filed as Exhibit 5.3 to Bank of Montreal’s Form 6-K filed with the SEC and dated May 26, 2022.
In the opinion of Ashurst
LLP, when the pricing supplement has been attached to, and duly notated on, the master note that represents the Notes, the Notes will
be executed, authenticated, issued and delivered, and the Notes have been issued and sold as contemplated by the prospectus supplement
and the prospectus, the Notes will be valid, binding and enforceable obligations of the Bank, entitled to the benefits of the senior indenture,
subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and subject to general principles of equity, public policy considerations and the discretion
of the court before which any suit or proceeding may be brought. This opinion is given as of the date hereof and is limited to the laws
of the State of New York. 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 the Bank and other sources as to certain
factual matters, all as stated in the legal opinion dated May 26, 2022, which has been filed as Exhibit 5.4 to the Bank’s Form 6-K
dated May 26, 2022.
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