Commerce Split Corp. has announced:
Since the June 13, 2008, the share price of CIBC has declined by approximately 18% and has required Commerce Split to sell additional shares of CIBC in order to raise cash levels to add to the Priority Equity Protection Plan. The proceeds from these sales are being used to purchase additional permitted repayment securities in order to maintain coverage levels as noted above. After giving effect to these additional purchases of repayment securities, it is estimated that the portfolio will have the equivalent of approximately $5.62 in cash and notional value (value at maturity) of permitted repayment securities per unit. As at July 11, 2008, the Company’s investment portfolio has approximately $5.49 in CIBC exposure per Unit.
Things have just gotten worse since they entered protection!
XCM.PR.A is not rated by any rating agency and is not tracked by HIMIPref™.
Update, 2008-7-17: CM common has gained substantially since the fund’s valuation at $9.83 on July 15, so the company issued another press release.
The Priority Equity Protection Plan forces Commerce Split to sell CIBC shares at low prices and to eventually buy back some (or all) of these shares at higher prices later on. What a nice value destroyer!
Portfolio Insurance rules, OK!
[…] protection programme is similar to the one in place for XCM.PR.A, which is still in […]
[…] Protection-Plan Status has been previously reported on PrefBlog. XCM.PR.A is not tracked by […]