{"id":5767,"date":"2009-03-05T12:41:00","date_gmt":"2009-03-05T16:41:00","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=5767"},"modified":"2009-03-05T12:41:00","modified_gmt":"2009-03-05T16:41:00","slug":"cm-issuing-16-billion-innovative-tier-1-capital","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=5767","title":{"rendered":"CM Issuing $1.6-billion Innovative Tier 1 Capital"},"content":{"rendered":"

CIBC has announced<\/a>:<\/p>\n

that CIBC Capital Trust (the “Trust”), a trust wholly-owned by CIBC, and CIBC had entered into an agreement with a group of underwriters led by CIBC World Markets Inc. for an issue of $1.3 billion of CIBC Tier 1 Notes – Series A due June 30, 2108 (the “Tier 1 – Series A Notes”) and $300 million of CIBC Tier 1 Notes – Series B due June 30, 2108 (the “Tier 1 – Series B Notes”) (collectively, the “Tier 1 Notes”). The Trust intends to file a final prospectus with Canadian securities regulators today. The Tier 1 Notes are expected to qualify as Tier 1 capital of CIBC for regulatory purposes.<\/p>\n

CIBC reported a Tier 1 capital ratio at January 31, 2009 of 9.8%. Giving effect to the $325 million Series 35 preferred share issue that closed on February 4, 2009, the $200 million Series 37 preferred share issue scheduled to close on March 6, 2009, and the $1.6 billion Tier 1 Notes issue announced today, CIBC’s pro-forma Tier 1 capital ratio at January 31, 2009, would be approximately 11.5%.<\/p>\n

From the date of issue to, but excluding June 30, 2019, interest on the Tier 1 – Series A Notes is payable semi-annually at a rate of 9.976% per annum. Starting on June 30, 2019, and on every fifth anniversary thereafter until June 30, 2104, interest on the Tier 1 – Series A Notes will reset as described in the prospectus.<\/p>\n

From the date of issue to, but excluding June 30, 2039, interest on the Tier 1 – Series B Notes is payable semi-annually at a rate of 10.25% per annum. Starting on June 30, 2039, and on every fifth anniversary thereafter until June 30, 2104, interest on the Tier 1 – Series B Notes will reset as described in the prospectus.<\/p>\n

On or after June 30, 2014, the Trust may, at its option and subject to certain conditions, redeem the Tier 1 – Series A Notes or the Tier 1 – Series B Notes, in each case, in whole or in part.<\/p>\n

In certain circumstances, the Tier 1 Notes may be automatically exchanged for, or interest thereon may be paid by, the issuance of non-cumulative Class A Preferred Shares of CIBC.<\/p>\n

The expected closing date is March 13, 2009. The net proceeds of this offering will be used for general purposes of CIBC.<\/p><\/blockquote>\n

The prospectus is not yet available on SEDAR<\/a>.<\/p>\n

Cumulative Tier 1 Capital with a maturity date … sigh … this is being issued under OSFI’s ill-advised rule relaxation<\/a> of December 2008.<\/p>\n

Assiduous Readers will remember that Innovative Tier 1 Capital pays interest and may be loosely regarded as RSP-Friendly Preferred Shares for investment classification purposes.<\/p>\n

It is noteworthy that this is – as far as I know – CIBC’s first foray into this kind of financing. Certainly they had none outstanding at 1Q09<\/a>.<\/p>\n

Update, 2009-3-11<\/b>: DBRS rates A(high), trend negative<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

CIBC has announced: that CIBC Capital Trust (the “Trust”), a trust wholly-owned by CIBC, and CIBC had entered into an agreement with a group of underwriters led by CIBC World Markets Inc. for an issue …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":["post-5767","post","type-post","status-publish","format-standard","hentry","category-regulatory-capital"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/5767","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5767"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/5767\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5767"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5767"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5767"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}