We advised Bank of Montreal in connection with the corporate actions of the existing ETN and the launch of the new ETN

Davis Polk advised Bank of Montreal (BMO) in connection with its intention to redeem all of the outstanding securities of its MicroSectors FANG+ Index 3× Leveraged Exchange-Traded Notes (ETNs) due January 8, 2038; and the launch of a new ETN, the MicroSectors FANG+ 3× Leveraged ETNs due February 17, 2045.

BMO intends to redeem all of the original ETNs on May 15, 2025. In anticipation of this redemption, BMO also plans to change the ticker symbol for the original ETNs from “FNGU” to “FNGA,” which is expected to be effective at the open of trading on March 3, 2025, with the expectation that it will reuse the “FNGU” ticker symbol for the new ETNs.

The new ETNs are linked to the gross total return version of the NYSE FANG+ Index, which is the same index that the original ETNs are linked to and 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 and communications and consumer discretionary sectors. The new 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 new ETNs are meant to replace the original ETNs and provide investors continued access to an ETN with three times leveraged, daily resetting and exposure to the same index, but with fees and charges that reflect the current market environment. The new ETNs are listed on the NYSE Arca, Inc.

BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.468 trillion as of January 31, 2025. 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.

The Davis Polk capital markets team included partner Christopher S. Schell, counsel Michael J. Russo and associates Jacquiley Wong, Christian Mueller and Maria Vlachou. The tax team included partner Aliza Slansky, counsel David S. Fisher and associate Alec Oveis. Partner Pritesh P. Shah provided intellectual property advice. Members of the Davis Polk team are based in the New York and Northern California offices.

 

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