PrefBlog

Canadian Imperial Bank of Commerce has announced (on June 12):

that it does not intend to exercise its right to redeem all or any part of its currently outstanding 16,000,000 Non-cumulative Rate Reset Class A Preferred Shares Series 39 (Non-Viability Contingent Capital (NVCC)) (the “Series 39 Shares”) on July 31, 2019.

Subject to certain conditions set out in the prospectus supplement dated June 2, 2014 relating to the issuance of the Series 39 Shares, the holders of Series 39 Shares have the right to convert all or any of their Series 39 Shares, on a one-for-one basis, into Non-cumulative Floating Rate Class A Preferred Shares Series 40 (Non-Viability Contingent Capital (NVCC)) of CIBC (the “Series 40 Shares”) on July 31, 2019.

On such date, holders who do not exercise their right to convert their Series 39 Shares into Series 40 Shares, will continue to hold their Series 39 Shares. The foregoing conversion rights are subject to the following:

• if CIBC determines that there would remain outstanding less than 1,000,000 Series 40 Shares, after having taken into account all Series 39 Shares tendered for conversion on July 31, 2019, then holders of Series 39 Shares will not be entitled to convert their shares into Series 40 Shares, and
• alternatively, if CIBC determines that there would remain outstanding less than 1,000,000 Series 39 Shares, after having taken into account all Series 39 Shares tendered for conversion on July 31, 2019, then all, but not part, of the remaining outstanding Series 39 Shares will automatically be converted into Series 40 Shares on a one-for-one basis on July 31, 2019.

In either case, CIBC will give written notice to that effect to the registered holder of Series 39 Shares no later than July 24, 2019.

The dividend rate applicable to the Series 39 Shares, should any remain outstanding after July 31, 2019, for the five-year period from and including July 31, 2019 to but excluding July 31, 2024 , and the dividend rate applicable to the Series 40 Shares, should any be issued, for the three-month period from and including July 31, 2019 to but excluding October 31, 2019, as and when declared by the Board of Directors of CIBC, will be calculated and announced on June 28, 2019. CIBC has designated the Series 40 Shares as eligible to participate in the CIBC Shareholder Investment Plan.

Beneficial owners of Series 39 Shares who wish to excise their conversion right should instruct their broker or other nominee to exercise such right during the conversion period, which runs from July 1, 2019 until 5:00 p.m. (Eastern Daylight Time) on July 16, 2019. It is recommended that this be done well in advance of the deadline in order to provide the broker or other nominee time to complete the necessary steps. Any notices received after this deadline will not be valid.

CM.PR.O is a FixedReset, 3.90%+232, NVCC-compliant, that commenced trading 2014-6-11 after being announced 2014-6-2. It is tracked by HIMIPref™ and is assigned to the FixedReset (Discount) subindex.

I will have more to say when the reset rate is announced on June 28.

This entry was posted on Monday, June 24th, 2019 at 5:41 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.