Bank of Montreal Sells Largest Note Tied to Raymond James Picks

Bank of Montreal sold $185 million of one-year notes tied to a basket of 13 stocks chosen as 2014’s “best picks” by Raymond James Financial Inc., the bank’s largest offering tied to the brokerage’s selections.

The securities, issued Dec. 10, yield the gains and losses of the stocks or American depositary shares of companies selected by the equity research team at Raymond James, according to a prospectus filed with the U.S. Securities and Exchange Commission.

The St. Petersburg, Florida-based firm’s list includes Apple Inc., JPMorgan Chase & Co., and International Ltd., an online travel agency, according to the prospectus.

“The list is really a compendium of the analysts that have been the most efficient in picking winners,” David Henwood, chief investment officer of equity research at Raymond James in St. Petersburg, said in a telephone interview.

Bank of Montreal estimated the initial value at 99.3 cents on the dollar for each $1,000 of notes, and Raymond James charged an additional 2.75 percent fee to distribute the securities, according to the prospectus.

The Toronto-based bank sold $191 million of debentures tied to Raymond James’s picks with offerings in January this year and December 2012, Bloomberg data show.

In September, Bank of Nova Scotia’s Scotiabank unit sold $131.8 million of three-year notes tied to an index of the brokerage’s stock selections.

The best picks list for 2013 rose 44 percent through Dec. 5, according to Raymond James.

Martha McInnis, a spokeswoman for Bank of Montreal, didn’t return voicemails seeking comment.

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.

Kevin Dugan in New York at

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