Bank of Montreal Launches $1 Billion Senior Medium-Term Notes Series K with 4.76% Fixed Rate Maturing in 2029

Fixed Interest Rate and Payment Schedule

The notes offer a fixed interest rate of 4.76% per annum, with semiannual payments on January 31 and July 31, beginning January 31, 2027, continuing until maturity or early redemption. Interest calculations use a 30/360 day count convention on an unadjusted basis, standard in corporate debt. Interest accrues from the issue date, calculated for each period from the previous payment date up to but excluding the current payment date.

At maturity on July 31, 2029, unless redeemed earlier, holders receive $1,000 per note plus any accrued unpaid interest. Notes are available in $1,000 denominations and integral multiples, catering to both retail and institutional investors. The notes will not be listed on any exchange, restricting secondary market liquidity to over-the-counter trades.

Optional Redemption Details and Schedule

Bank of Montreal may redeem the notes in full (not partial) on quarterly optional redemption dates falling on the last calendar day of January, April, July, and October. This optional redemption window starts July 31, 2028, and ends April 30, 2029, providing flexibility to manage debt and refinance if market conditions improve. Redemption is at par (100% principal) plus accrued interest, with no premium paid for early redemption.

Notices of redemption must be provided to noteholders at least 5 but not more than 30 business days before the redemption date, as outlined in the prospectus supplement. This ensures investors have sufficient advance notice before redemption occurs. The redemption option allows the issuer to reduce interest costs if market rates decline during the three-year term.

Pricing and Underwriting Compensation

The initial issue price per note is $1,000. BMO Capital Markets Corp. receives an underwriting discount of $10 per note, resulting in net proceeds of $990 per note to Bank of Montreal. Selected dealers may earn selling concessions up to $10 per note, depending on market conditions at order placement. For eligible institutional and fee-based advisory account investors, the issue price may vary between $990 and $1,000 per note based on negotiated terms and market conditions.

Dealers selling to institutional and advisory clients may waive some or all selling concessions to facilitate distribution. The filing does not disclose the total principal amount or total proceeds raised, with these figures left blank in the pricing table.

Bail-In Conversion Provisions and Regulatory Context

The notes are classified as bail-inable under subsection 39.2(2.3) of the Canada Deposit Insurance Corporation Act. By purchasing these notes, holders agree to be bound by the CDIC Act, including potential conversion of notes into Bank of Montreal common shares or affiliates’ shares through one or more transactions. This conversion is governed by Ontario provincial law and applicable federal Canadian laws.

Holders submit to the jurisdiction of Ontario courts concerning the CDIC Act and related Canadian legislation. Investors must warrant that Bank of Montreal has not provided financing expressly for investing in these bail-inable notes. These binding terms override any provisions in the indenture, the notes, other laws, or agreements between investors and Bank of Montreal.

Investor Consent and Limited Recourse in Bail-In Conversion

Acquiring these notes constitutes irrevocable consent by holders to deem any converted principal and accrued interest fully paid upon issuance of Bank of Montreal common shares during a bail-in event. This conversion occurs automatically without further action by holders, beneficial owners, or trustees. Post-conversion, holders have no rights related to the converted portion beyond those under the Canadian bail-in regime.

This consent does not restrict rights under the bail-in framework itself, preserving protections or recovery mechanisms under Canadian banking resolution laws. This aligns with international standards for bank resolution, subordinating noteholders to insured depositors in distress scenarios.

Risk Factors and Credit Risk Considerations

The filing highlights that these notes carry risks distinct from traditional debt securities. They are unsecured obligations of Bank of Montreal, exposing investors to issuer credit risk and potential loss of principal and interest if the bank defaults. The notes are not insured by U.S. or Canadian deposit insurance agencies.

Detailed risk disclosures begin on page PS-4 of the pricing supplement and PS-5 of the product supplement. The bail-in feature introduces unique risks, including mandatory conversion to equity without investor consent upon regulatory trigger, potentially diluting noteholders or altering their investment profile.

Registration and Offering Documentation

The notes are issued under Registration Statement No. 333-285508 filed with the SEC. The pricing supplement dated July 27, 2026 (subject to completion) is a preliminary filing under Rule 424(b)(2) of the Securities Act of 1933. The offering references product supplement RLN-1, prospectus supplement, and prospectus all dated March 25, 2025. In case of disclosure conflicts, the pricing supplement prevails.

Bank of Montreal’s SEC Central Index Key (CIK) is 927971. The filing includes direct links to offering documents on the SEC’s EDGAR database. The SEC and state regulators have neither approved nor disapproved the notes or verified the accuracy of the pricing supplement.

Terms, Conditions, and Investor Notes

The notes carry CUSIP 06376LFH4, enabling electronic clearing via the Depository Trust Company. They are not redeemable at the holder’s option before maturity, locking investors into the full term unless early redemption is exercised by Bank of Montreal. These unsecured, subordinated notes are subject to mandatory equity conversion under Canadian banking resolution law, distinguishing them from conventional fixed-income instruments.

Pricing for eligible institutional and fee-based advisory investors varies based on market and negotiated terms, potentially creating price differences across investor categories. Notes are offered in $1,000 multiples, but absence of exchange listing may limit secondary market liquidity.

Regulatory and Jurisdictional Framework

The notes fall under Canadian banking resolution law, specifically subsection 39.2(2.3) of the Canada Deposit Insurance Corporation Act and Ontario provincial law. Bank of Montreal, as a Canadian-chartered bank, is regulated by the Office of the Superintendent of Financial Institutions Canada and the CDIC. Bail-in conversion and Ontario jurisdiction terms are binding on all holders, superseding indenture or contractual provisions.

Investors should recognize that remedies in Bank of Montreal distress scenarios are governed by Canadian law and the CDIC resolution framework rather than U.S. bankruptcy or securities laws. Submission to Ontario courts and Canadian law presents important jurisdictional considerations for U.S. investors. The bail-in mechanism prioritizes Canadian regulatory resolution powers over noteholder claims, placing these securities subordinated within the bank’s capital structure.