NEW
YORK, Feb. 19, 2025 /PRNewswire/ - Bank of
Montreal ("BMO") announced
today (i) its intention to redeem all of the outstanding securities
of its MicroSectorsTM FANG+™ Index 3× Leveraged ETNs due
January 8, 2038, CUSIP: 063679534
(the "FNGU ETNs"); (ii) its plan to change the ticker symbol
for the FNGU ETNs; and (iii) the launch of a new ETN, the
MicroSectors™ FANG+™ 3× Leveraged ETNs due January 23, 2045, CUSIP: 063679385 (the
"FNGB ETNs"), which is expected to reuse the
"FNGU" ticker symbol at a later date.
The table below summarizes the announcements being made with
respect to the FNGU ETNs and the FNGB ETNs.
ETN
Title
|
CUSIP
|
Current ETN
Ticker
Symbol
|
Expected
ETN
Ticker
Symbol
|
Expected
Call
Settlement
Date
|
MicroSectorsTM FANG+™ Index 3×
Leveraged ETNs
|
063679534
|
FNGU
|
FNGA*
|
May 15,
2025***
|
MicroSectorsTM FANG+™ 3×
Leveraged ETNs
|
063679385
|
FNGB
|
FNGU**
|
N/A
|
*Expected to be
effective on March 3, 2025.
|
**Expected to be
effective on June 2, 2025.
|
*** Subject to
postponement in the event of a market disruption event.
|
Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the applicable ETN Prospectus
(as defined below) for the relevant ETNs.
Redemption and Ticker Change of FNGU ETNs
BMO intends to redeem all of the outstanding FNGU ETNs on the
Call Settlement Date, which is expected to be May 15, 2025. In anticipation of this redemption,
BMO also plans to change the ticker symbol for the FNGU ETNs from
"FNGU" to "FNGA," which is expected to be effective at the open of
trading on March 3, 2025 (the
"ticker symbol change date").
The FNGU ETNs were launched in January
2018 with fees and charges that reflected the then-current
market environment. BMO is redeeming the FNGU ETNs because the
costs associated with supporting the leverage embedded in the FNGU
ETNs have increased and, therefore, the existing fees and charges
applicable to the FNGU ETNs no longer reflect the current market
environment. BMO is changing the ticker symbol of the FNGU ETNs
from "FNGU" to "FNGA" with the expectation that it will reuse the
"FNGU" ticker symbol approximately 90 days after the ticker symbol
change date (which is the required "cooling off" period under the
NYSE Arca, Inc.'s (the "NYSE") guidelines) for its new FNGB
ETNs.
Further details regarding the redemption of the FNGU ETNs are
provided below.
Launch of New FNGB ETNs
BMO launched today a new MicroSectors™ ETN linked to the
gross total return version of the NYSE FANG+® Index (the
"Index"). The FNGB ETNs will start trading tomorrow on the
NYSE under the ticker symbol "FNGB." The FNGB ETNs are intended to
offer sophisticated investors three times leveraged participation
in the daily performance of the Index, before taking into account
fees, charges and the decay effect caused by the daily resetting of
the leverage. The FNGB ETNs are meant to replace the FNGU ETNs and
provide investors continued access to an ETN with three times
leveraged, daily resetting, exposure to the Index, but with fees
and charges that reflect the current market environment.
The Index, which is the same index that the FNGU ETNs are linked
to, is an equally-weighted equity index that tracks the performance
of 10 highly-traded growth stocks of technology and tech-enabled
companies in the technology, media & communications and
consumer discretionary sectors. The Index is a total return index,
in which dividends paid on the applicable securities are included
in the level of the Index. The ticker symbol of the Index is
"NYFANGT".
Given the FNGB ETNs are meant to replace the FNGU ETNs and given
the "FNGU" ticker is recognizable in the exchange traded product
market for three times leveraged, daily resetting, exposure to the
Index, BMO intends to reuse the "FNGU" ticker for the FNGB ETNs
approximately 90 days after the ticker symbol change date. Once
this change, for which BMO will issue another announcement, becomes
effective, the FNGB ETNs are expected to trade under the ticker
symbol "FNGU."
For the first 6 months after the Initial Trade Date, the Daily
Investor Fee for the FNGB ETNs will be discounted, based on a rate
of 0.35% per annum. Thereafter, the Daily Investor Fee will be
based on a rate of 0.95% per annum. See the ETN Prospectus for the
FNGB ETNs for more information regarding the fees and charges
applicable to the FNGB ETNs.
Additional Information Related to the Redemption of the FNGU
ETNs
BMO intends to send a notice of redemption to holders of the
FNGU ETNs on May 1, 2025. The Call
Calculation Date will be the Index Business Day after the call
notice is issued, which is expected to be May 2, 2025. The Call Measurement Period will be
the five Index Business Days from and including the Call
Calculation Date, which are expected to be May 2, 2025, May 5,
2025, May 6, 2025,
May 7, 2025 and May 8, 2025. The Call Measurement Period is
subject to postponement in the event of a market disruption event
as described in the ETN Prospectus for the FNGU ETNs. The Call
Settlement Date will be the fifth Business Day following the last
Index Business Day in the Call Measurement Period, which is
expected to be May 15, 2025.
On the Call Settlement Date, holders of the FNGU ETNs will
receive a cash payment equal to the Call Settlement Amount. The
Call Settlement Amount will be determined in accordance with the
terms of the FNGU ETNs and will be equal to the arithmetic mean of
the closing Indicative Note Values on each Index Business Day in
the Call Measurement Period. BMO will pay the applicable Call
Settlement Amount to investors holding the FNGU ETNs on the
applicable Call Settlement Date. Please refer to the ETN Prospectus
for the FNGU ETNs for the additional information on the calculation
of the Call Settlement Amount and the closing Indicative Note
Values.
The FNGU ETNs will be delisted from the NYSE prior to the open
of trading on the Call Settlement Date. Accordingly, the last day
of trading for the FNGU ETNs is expected to be May 14, 2025.
Holders of the FNGU ETNs may choose to continue to hold their
securities until the Call Settlement Date, or may choose to redeem
their securities on or prior to May 1,
2025, in accordance with the terms of the FNGU ETNs, or sell
their securities in the secondary market. BMO has announced the
waiver of the minimum early redemption size for the FNGU ETNs.
Prior to the waiver, holders of the FNGU ETNs were required to
redeem at least 25,000 ETNs at one time in order to exercise their
right to redeem them.
Disclosures
The issuance of this notice of our election to exercise our
call right in whole may adversely impact your ability to sell the
FNGU ETNs and/or the price at which you may be able to sell your
FNGU ETNs prior to the Call Settlement Date.
Investors who purchase the FNGU ETNs at any time prior to the
Call Settlement Date for an amount that is greater than the
applicable Call Settlement Amount that they will receive on the
Call Settlement Date will suffer a loss on their investment.
Furthermore, investors who sell the FNGU ETNs at any time prior to
delisting for an amount that is less than the applicable Call
Settlement Amount they would have received on the Call Settlement
Date will also suffer a loss. In either case, such losses could be
significant. Investors will not receive any other compensation or
amount for the loss of the investment opportunity of holding the
FNGU ETNs.
The FNGB ETNs are not intended to be "buy and hold"
investments, and are not intended to be held to maturity. Instead,
the FNGB ETNs are intended to be daily trading tools for
sophisticated investors to manage daily trading risks as part of an
overall diversified portfolio. The FNGB ETNs are designed to
reflect a 3× leveraged long exposure to the performance of the
Index on a daily basis, before taking into account the negative
effect of the fees and charges. However, due to the daily resetting
leverage, the returns on the FNGB ETNs over different periods of
time can, and most likely will, differ significantly from three
times the return on a direct long investment in the Index. The FNGB
ETNs are designed to achieve their stated investment objectives on
a daily basis. The performance of the FNGB ETNs over different
periods of time can differ significantly from their stated daily
objectives. The FNGB ETNs are considerably riskier than securities
that have intermediate- or long-term investment objectives, and are
not suitable for investors who plan to hold them for a period of
more than one day or who have a "buy and hold" strategy. Investors
should actively and continuously monitor their investments in the
FNGB ETNs on an intra-day basis, and any decision to hold the FNGB
ETNs for more than one day should be made with great care and only
as the result of a series of daily (or more frequent) investment
decisions to remain invested in the FNGB ETNs for the next one-day
period. The FNGB ETNs are very sensitive to changes in the level of
the Index, and returns on the FNGB ETNs may be negatively impacted
in complex ways by the volatility of the Index on a daily or
intraday basis. It is possible that you will suffer significant
losses in the FNGB ETNs even if the long-term performance of the
Index is positive. Accordingly, the FNGB ETNs should be purchased
only by sophisticated investors who understand and can bear the
potential risks and consequences of the FNGB ETNs that are designed
to provide exposure to the leveraged performance of the Index on a
daily basis and that will be highly volatile and may experience
significant losses, up to the entire amount invested, in a short
period of time.
For additional information, including a discussion of the risks
relating to an investment in the ETNs, please carefully read the
applicable pricing supplement and related documents that we have
filed with respect to the ETNs (each, an "ETN Prospectus").
Investors should review the relevant ETN Prospectus carefully prior
to making an investment decision.
The ETN Prospectus relating to the each of the ETNs can be found
on EDGAR, the Securities and Exchange Commission (the "SEC")
website at: www.sec.gov, as well as on the product websites at
the following links: www.bmoetns.com and
www.microsectors.com
Bank of Montreal, the issuer of
each series of the ETNs, has filed a registration statement
(including a pricing supplement, product supplement (if
applicable), prospectus supplement and prospectus) with the SEC
regarding each of series of the ETNs. Please read those documents
and the other documents relating to these securities that Bank of
Montreal has filed with the SEC
for more complete information about Bank of Montreal and the applicable securities. These
documents may be obtained without cost by visiting EDGAR on the SEC
website at www.sec.gov. Alternatively, Bank of Montreal, and any agent or dealer that
participated in the offering of the ETNs, will arrange to send the
applicable pricing supplement, the product supplement (if
applicable), the prospectus supplement and the prospectus if so
requested by calling toll-free at 1-877-369-5412.
The ETNs are senior, unsecured obligations of BMO, and are
subject to BMO's credit risk.
Investment suitability must be determined individually for each
investor, and the ETNs are not suitable for all investors. This
information is not intended to provide and should not be relied
upon as providing accounting, legal, regulatory or tax advice.
Investors should consult with their own financial advisors as to
these matters.
About REX Shares
REX Shares ("REX") is a leading provider of innovative
exchange-traded products (ETPs), specializing in alternative
strategy ETFs and ETNs. With over $8
billion in assets under management, REX is known for
pioneering the MicroSectors™ and T-REX product lines, offering
leveraged and inverse exposure to a variety of market sectors. REX
also provides a number of services for its
crypto-focused sister company, Osprey Funds, LLC. REX
continues to drive industry innovation through its growing suite of
ETPs, serving investors seeking sophisticated trading tools, income
strategies, and other alternative exposures.
For more information, please
visit www.rexshares.com or www.microsectors.com
Follow REX (@REXShares) and MicroSectors (@msectors)
on X.
REX Media Contacts: rexshares@gregoryfca.com
About BMO Financial Group
BMO Financial Group is the eighth largest bank in North
America by assets, with total assets of $1.41 trillion as
of October 31, 2024. Serving customers for 200 years and counting,
BMO is a diverse team of highly engaged employees providing a broad
range of personal and commercial banking, wealth management, global
markets and investment banking products and services to 13 million
customers across Canada, the United
States, and in select markets globally. Driven by a single
purpose, to Boldly Grow the Good in business and life, BMO
is committed to driving positive change in the world, and making
progress for a thriving economy, sustainable future, and inclusive
society.
Internet: www.bmo.com
The NYSE FANG+® Index is a product of ICE Data
Indices, LLC ("ICE Data") and is used with permission.
ICE® is a registered trademark of ICE Data or its
affiliates. NYSE® is a registered trademark of NYSE
Group, Inc., an affiliate of ICE Data and is used by ICE Data with
permission and under a license. ICE Data and its Third Party
Suppliers accept no liability in connection with the use of the
NYSE FANG+® Index or marks. See the applicable ETN
Prospectus for a full copy of the Disclaimer.
MicroSectors™ and REX™ are trademarks of REX. The trademarks
have been licensed for use for certain purposes by REX. The indices
have been licensed for use by REX. The ETNs are not sponsored,
endorsed, sold or promoted by REX or any of its affiliates or third
party licensors (collectively, "REX Index Parties"). REX
Index Parties make no representation or warranty, express or
implied, to the owners of the ETNs or any member of the public
regarding the advisability of investing in securities generally or
in the ETNs particularly or the ability of the indices to track
general stock market performance.
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SOURCE BMO Financial Group