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Preferred Share Description
Canadian Imperial Bank of Commerce (CM.PR.P)
3.75% Non-Cumulative, Redeemable, Rate Reset, NVCC*, Class A preferred shares, Series 41
Prospectus - December 8, 2014
DBRS Credit Rating: May 28, 2019 - DBRS confirmed the ratings of Canadian Imperial Bank of Commerce and its related entities, including CIBC’s Long-Term Issuer Rating at AA and Short-Term Issuer Rating at R-1 (high). The trend on all ratings is Stable.
CIBC’s Long-Term Issuer Rating is composed of an Intrinsic Assessment of AA (low) and a Support Assessment (SA) of SA2, which reflects the expectation of timely systemic support from the Government of Canada (rated AAA with a Stable trend by DBRS). The SA2 designation results in a one-notch uplift to the Long-Term Issuer Rating. Under the new Canadian Bank Recapitalization Regime, DBRS expects to eventually remove the uplift from systemic support once the Bank has issued a sufficient level of bail-inable senior debt, which would provide an adequate buffer for non-bail-inable obligations and is expected to offset the removal of systemic support.
Important Note: NVCC preferred shares have a lower credit rating than other CIBC preferred share issues. DBRS assigned the NVCC Preferred Shares Series 41 a rating equal to the Bank’s intrinsic assessment less four rating notches because the Series 41 has only an Office of the Superintendent of Financial Institutions (OSFI)-compliant non-viable contingent capital (NVCC) trigger, which is consistent with the OSFI requirements for NVCC instruments, and no additional triggers.
*NVCC is short for Non-Viability Contingent Capital and it refers to the issuer's ability to convert the preferred shares into common shares if a "Trigger Event" occurs. See "Convertible by Company" section below for the definition of a trigger event.
- DBRS Rating
- Pfd-2 Stable Trend
- DBRS Rating Date
- Shares Issued
- Issued Date
- Shares O/S
- O/S Date
- $0.9375 per share per year
- Dividend Dates
- On the 28th day of January, April, July and October.
- Dividend Details
- The share's dividend rate is fixed until January 31, 2020. On January 31, 2020 and on January 31st every 5 years thereafter, the dividend rate will be calculated and reset as the sum of the the 5-year Government of Canada Bond Yield (GCAN5YR) plus 2.24%.
- The Series 41 Shares will not be redeemable prior to January 31, 2020. The series 41 shares are redeemable by the company on January 31, 2020 and on January 31st every 5 years thereafter at a rate of $25 cash for each series 41 preferred share.
- Holders of the Series 41 Rate-Reset preferred shares will have the right to convert their shares into an equal number of the Series 42 Floating-Rate preferred shares on January 31, 2020 and on January 31st every five years thereafter. The Series 42 Floating-Rate shares will calculate and pay a dividend quarterly equal to the sum of the Government of Canada 3-month T-Bill Rate plus 2.24%. On January 31, 2025 and on January 31st every five years thereafter holders of the Series 42 Floating-Rate preferred shares will have the right to convert their shares into an equal number of the Series 41 Rate-Reset preferred shares.
- Lead Underwriter(s)
- CIBC World Markets, RBC Dominion Securities, Scotia Capital Inc. and TD Securities
- Transfer Agent
- CST Trust Company
- CST Trust Company
- Dividend Reinvestment Plan
- Registered holders of the preferred shares are eligible to participate in the Dividend Reinvestment Plan for the purchase of common shares. For more information, visit Shareholder investment Plans at https://www.cibc.com/ca/investor-relations/share-info/preferred-shares.html
- Convertible by Company
- The company can force Series 41 and 42 shareholders to convert their shares into the company's common shares upon the occurrence of a "Trigger Event". For more details, refer to the share's prospectus.
- Corporate Action
- CIBC (CM: TSX, NYSE) is a leading Canadian-based financial institution with a market capitalization of $50 billion and a Basel III Common Equity Tier 1 capital ratio of 11.2%. Through our four strategic business units – Canadian Personal and Small Business Banking, Canadian Commercial Banking and Wealth Management, U.S. Commercial Banking and Wealth Management, and Capital Markets – our nearly 45,000 employees provide a full range of financial products and services to 11 million individual, small business, commercial, corporate, and institutional clients in Canada, the U.S. and around the world.
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