Registration Statement No. 333-264388

Filed Pursuant to Rule 433

Bank of Montreal

Market Linked Securities

Market Linked Securities—Auto-Callable with Contingent Coupon and Contingent Downside

Principal at Risk Securities Linked to the Lowest Performing of the S&P 500® Index, the Russell 2000® Index and the EURO STOXX 50® Index due June 24, 2027

Term Sheet to Preliminary Pricing Supplement No. ARC3605 dated June 12, 2024

Summary of Terms   Hypothetical Payout Profile (maturity payment amount)
Issuer : Bank of Montreal  

 

If the securities are not automatically called prior to stated maturity and the ending level is less than its threshold level, you will lose more than 25%, and possibly all, of the face amount of your securities at stated maturity.

Any return on the securities will be limited to the sum of your contingent coupon payments, if any. You will not participate in any appreciation of any Index, but you will have full downside exposure to the lowest performing Index if its ending level is less than its threshold level.

On the date of the accompanying preliminary pricing supplement, the estimated initial value of the securities is $967.80 per security. The estimated initial value of the securities on the pricing date may differ from this value but will not be less than $917.00 per security. However, as discussed in more detail in the accompanying preliminary pricing supplement, the actual value of the securities at any time will reflect many factors and cannot be predicted with accuracy. See “Estimated Value of the Securities” in the accompanying preliminary pricing supplement.

Preliminary Pricing Supplement: https://www.sec.gov/Archives/edgar/data/927971/000121465924010867/x612240fwp.htm

Market Measures: The S&P 500® Index, the Russell 2000® Index and the EURO STOXX 50® Index (each referred to as an “Index,” and collectively as the “Indices”).  
Pricing Date*: June 21, 2024  
Issue Date*: June 26, 2024  

Face Amount and Original

Offering Price:

 $1,000 per security  
Contingent Coupon
Payments:		 On each contingent coupon payment date, you will receive a contingent coupon payment at a per annum rate equal to the contingent coupon rate if the closing level of the lowest performing Index on the related calculation day is greater than or equal to its threshold level. Each “contingent coupon payment,” if any, will be calculated per security as follows: ($1,000 × contingent coupon rate)/4  
Contingent Coupon
Payment Dates:		 Quarterly, on the third business day following each calculation day; provided that the contingent coupon payment date with respect to the final calculation day will be the stated maturity date  
Contingent Coupon Rate: At least 8.80% per annum, to be determined on the pricing date  
Automatic Call: If the closing level of the lowest performing Index on any of the calculation days scheduled to occur from December 2024 to March 2027, inclusive, is greater than or equal to its starting value, the securities will be automatically called, and on the related call settlement date, you will be entitled to receive a cash payment per security in U.S. dollars equal to the face amount plus a final contingent coupon payment  
Call Settlement Date: Three business days after the applicable calculation day  
Calculation Days*: Quarterly, on the 21st day of each March, June, September and December, commencing in September 2024 and ending in March 2027, and June 21, 2027 (the “final calculation day”)  

Maturity Payment Amount

(per security):

·   if the ending level of the lowest performing Index on the final

calculation day is greater than or equal to its threshold level:

$1,000; or

·   if the ending level of the lowest performing Index on the final

calculation day is less than its threshold level:

$1,000 × performance factor of the lowest performing Index on

the final calculation day

 
Stated Maturity Date*: June 24, 2027  
Lowest Performing Index: For any calculation day, the “lowest performing Index” will be the Index with the lowest performance factor on that calculation day.  
Performance Factor: With respect to an Index on any calculation day, its closing level on such day divided by its starting level (expressed as a percentage)  
Starting Level: With respect to each Index, its closing level on the pricing date  
Ending Level: With respect to each Index, its closing level on the final calculation day  
Threshold Level: With respect to each Index, 75% of its starting level  
Calculation Agent: BMO Capital Markets Corp., an affiliate of the issuer  
Denominations: $1,000 and any integral multiple of $1,000  
Agent Discount**: Up to 2.325%; dealers, including those using the trade name Wells Fargo Advisors (“WFA”), may receive a selling concession of up to 1.75% and WFS may pay 0.075% of the agent’s discount to WFA as a distribution expense fee  
CUSIP: 06376ATU4  
Material Tax Consequences: See the preliminary pricing supplement.  

*subject to change

** In addition, selected dealers may receive a fee of up to 0.10% for marketing and other services

  

 

 

The securities have complex features and investing in the securities involves risks not associated with an investment in conventional debt securities. See “Selected Risk Considerations” in this term sheet and the accompanying preliminary pricing supplement and “Risk Factors” in the accompanying product supplement.

This introductory term sheet does not provide all of the information that an investor should consider prior to making an investment decision.

Investors should carefully review the accompanying preliminary pricing supplement, product supplement, prospectus supplement and prospectus before making a decision to invest in the securities.

NOT A BANK DEPOSIT AND NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY

 

   
 

 

Selected Risk Considerations

 

The risks set forth below are discussed in detail in the “Selected Risk Considerations” section in the accompanying preliminary pricing supplement and the “Risk Factors” section in the accompanying product supplement. Please review those risk disclosures carefully.

 

Risks Relating To The Terms And Structure Of The Securities

·       If The Securities Are Not Automatically Called Prior To Stated Maturity, You May Lose Some Or All Of The Face Amount Of Your Securities At Stated Maturity.

·       The Securities Do Not Provide For Fixed Payments Of Interest And You May Receive No Coupon Payments On One Or More Contingent Coupon Payment Dates, Or Even Throughout The Entire Term Of The Securities.

·       The Securities Are Subject To The Full Risks Of Each Index And Will Be Negatively Affected If Any Index Performs Poorly, Even If The Other Indices Perform Favorably.

·       Your Return On The Securities Will Depend Solely On The Performance Of The Index That Is The Lowest Performing Index On Each Calculation Day, And You Will Not Benefit In Any Way From The Performance Of The Better Performing Indices.

·       You Will Be Subject To Risks Resulting From The Relationship Among The Indices.

·       You May Be Fully Exposed To The Decline In The Lowest Performing Index On The Final Calculation Day From Its Starting Level, But Will Not Participate In Any Positive Performance Of Any Index.

·       Higher Contingent Coupon Rates Are Associated With Greater Risk.

·       You Will Be Subject To Reinvestment Risk.

·       A Contingent Coupon Payment Date, A Call Settlement Date And The Stated Maturity Date May Be Postponed If A Calculation Day Is Postponed.

·       The Securities Are Subject To Credit Risk.

·       Significant Aspects Of The Tax Treatment Of The Securities Are Uncertain.

 

 

 

 

 

 

 

  

Risks Relating To The Estimated Value Of The Securities And Any Secondary Market

·       The Estimated Value Of The Securities On The Pricing Date, Based On Our Proprietary Pricing Models, Will Be Less Than The Original Offering Price.

·       The Terms Of The Securities Are Not Determined By Reference To The Credit Spreads For Our Conventional Fixed-Rate Debt.

·       The Estimated Value Of The Securities Is Not An Indication Of The Price, If Any, At Which WFS Or Any Other Person May Be Willing To Buy The Securities From You In The Secondary Market.

·       The Value Of The Securities Prior To Stated Maturity Will Be Affected By Numerous Factors, Some Of Which Are Related In Complex Ways.

·       The Securities Will Not Be Listed On Any Securities Exchange And We Do Not Expect A Trading Market For The Securities To Develop.

 

Risks Relating To The Indices

·       An Investment In The Securities Is Subject To Risks Associated With Investing In Stocks With A Small Market Capitalization.

·       An Investment In The Securities Is Subject To Risks Associated With Non-U.S. Securities.

·       The Maturity Payment Amount Will Not Be Adjusted For Changes In Exchange Rates

·       Any Payments On The Securities And Whether The Securities Are Automatically Called Will Depend Upon The Performance Of The Indices And Therefore The Securities Are Subject To A Variety of Risks, As Discussed In More Detail In The Accompanying Product Supplement.

 

Risks Relating To Conflicts Of Interest

·       Our Economic Interests And Those Of Any Dealer Participating In The Offering Are Potentially Adverse To Your Interests.

The Issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this document relates. Before you invest, you should read the prospectus in that registration statement and the other documents that the Issuer has filed with the SEC for more complete information about us and this offering. You may obtain these documents free of charge by visiting the SEC’s website at http://www.sec.gov. Alternatively, the Issuer will arrange to send to you the prospectus (as supplemented by the prospectus supplement) if you request it by calling the Issuer’s agent toll-free at 1-877-369-5412.

 

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.

 

 

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