UPDATE: Bank Of Montreal Launches $1.1 Billion 3-Year 2-Part Bond Sale -Source

Bank of Montreal (BMO) came to market Tuesday with a $1.1 billion, three-year sale of senior unsecured notes, according to a person familiar with the deal.

Proceeds of the sale, led by BMO Capital Markets, Barclays Capital, Goldman Sachs and J.P. Morgan Chase, will be used for general corporate purposes and to help fund the bank's proposed $4.1 billion acquisition of Milwaukee-based regional bank Marshall & Ilsley Corp. (MI), announced in December.

The notes are expected to be rated Aa2 by Moody's Investors Service, A+ by Standard & Poor's and AA- by Fitch Ratings, and the sale should close late Tuesday.

The deal is split between a $600 million fixed-rate piece launched at 0.70 percentage points over Treasurys; and a $500 million floating-rate piece launched at 0.47 percentage points over the three-month London interbank offered rate, or Libor.

That was inside price guidance of 0.70 to 0.72 percentage points on the fixed piece, the person familiar said, and the Libor equivalent on the floaters.

Bank of Montreal's most recent U.S. marketed high-grade bond was last June for $1 billion, according to data provider Dealogic.

-By Katy Burne, Dow Jones Newswires; 212-416-3084; [e-mail]