CM.PR.R Firm On Excellent Volume

The Canadian Imperial Bank of Commerce has announced:

that it has completed the offering of 32 million Basel III-compliant Non-cumulative Rate Reset Class A Preferred Shares Series 45 (Non-Viability Contingent Capital (NVCC)) (the “Series 45 Shares”) priced at $25.00 per share to raise gross proceeds of $800 million.

The offering was made through a syndicate of underwriters led by CIBC World Markets Inc. The Series 45 Shares commence trading on the Toronto Stock Exchange today under the ticker symbol CM.PR.R.

The Series 45 Shares were issued under a prospectus supplement dated May 26, 2017, to CIBC’s short form base shelf prospectus dated March 16, 2016.

CM.PR.R is a FixedReset, 4.40%+338, NVCC Compliant issue announced 2017-05-25. It will be tracked by HIMIPref™ and has been added to the FixedResets subindex.

The issue traded 2,454,817 shares today in a range of 24.96-07 before closing at 24.98-00. This volume places it eighteenth on the all-time (well, back until 1993-12-31, anyway) list, just behind TD.PR.H on 2004-4-6 and just ahead of BCE.PR.P on 2002-6-13. Vital statistics are:

CM.PR.R FixedReset YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2047-06-02
Maturity Price : 23.14
Evaluated at bid price : 24.98
Bid-YTW : 4.25 %

Implied Volatility analysis for FixedResets continues to suggest the issue may be a little expensive:

impvol_cm_170602
Click for Big

The theoretical price implied by the above calculation is 24.77.

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