BMO Offers Most Notes Tied to Raymond James Picks in Four Years

Bank of Montreal sold the most structured notes tied to companies chosen by Raymond James Financial Inc. (RJF) in four years.

The total $353.9 million of securities linked to the “best picks” from the St. Petersburg, Florida-based firm for 2014 is almost double last year’s offerings, according to data compiled by Bloomberg.

The bank issued $168.9 million of one-year notes Jan. 15 that yield the gains and losses of the basket of stocks and American depositary shares selected by the equity research team at Raymond James, according to a prospectus filed with the U.S. Securities and Exchange Commission. That transaction followed a $185 million issue on Dec. 10, Bloomberg data show.

Martha McInnis, a spokeswoman for the bank, didn’t return voicemails seeking comment on the securities.

The 13 companies selected this year include Comcast Corp. (CMCSA), the largest U.S. cable company, Apple Inc. and JPMorgan Chase & Co., according to the prospectus.

Bank of Montreal (BMO) estimated the initial value of the Jan. 15 securities at 99.5 cents on the dollar, and Raymond James charged an additional 2.75 percent fee to distribute the securities, according to the prospectus.

The bank, based in Toronto, sold $191 million of notes tied to 2013 picks, and $165.3 million of notes for the previous year’s basket, Bloomberg data show. Bloomberg started to collect comprehensive data on SEC-registered securities in 2010.

Banks create structured notes by packaging debt with derivatives to offer customized bets to retail investors while earning fees and raising money. Derivatives are contracts with values derived from stocks, bonds, commodities and currencies, or events such as changes in interest rates or the weather.

To contact the reporter on this story: Kevin Dugan in New York at kdugan4@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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