Bank of Montreal launch of High Yield and Investment Grade Corporate Bond ETNs
We advised Bank of Montreal on the launch of four new series of ETNs
Davis Polk advised Bank of Montreal (BMO) in connection with the launch of four new series of SEC-registered exchange traded notes (ETNs). The MicroSectors 3× Long and -3× Short High Yield and Investment Grade Corporate Bond ETNs are each intended to offer sophisticated investors three times leveraged long or short, as applicable, participation in the daily performance of the relevant index, before taking into account fees, charges and the decay effect caused by the daily resetting of the leverage. Each series of ETNs is listed on the Cboe BZX Exchange, Inc.
The MicroSectors 3× Long and -3× Short High Yield Corporate Bond (HYG) ETNs are linked to the VettaFi High Yield Corporate Bond Fund-Tracking Index, a total return index designed to provide exposure to U.S. dollar-denominated high-yield corporate debt through a single fund-tracking vehicle.
The MicroSectors 3× Long and -3× Short Investment Grade Corporate Bond (LQD) ETNs are linked to the VettaFi Investment Grade Corporate Bond Fund-Tracking Index, a total return index designed to provide exposure to U.S. dollar-denominated investment-grade corporate debt through a single fund-tracking vehicle.
BMO Financial Group is the eighth-largest bank in North America by assets, with total assets of $1.5 trillion as of April 30, 2026. Serving clients for more than 200 years, BMO provides a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services across Canada, the United States and select markets globally.
The Davis Polk capital markets team included partner Christopher S. Schell, counsel Michael J. Russo and associates Christian Mueller and John Foster. The tax team included partner Aliza Slansky, counsel David S. Fisher and associate Nicholas Wong. Members of the Davis Polk team are based in the New York and Northern California offices.