CIBC greenshoe ups 4.5% rate reset preferreds to C$450 million

By Susanna Moon

Chicago, Jan. 18 – Canadian Imperial Bank of Commerce said underwriters fully exercised the C$50 million over-allotment option on its 4.5% series 47 Basel 3-compliant non-cumulative rate reset class A preferred shares.

The greenshoe exercise brings the total deal size to C$450 million, according to a company update on Thursday.

The company said on Jan. 10 that it had entered into an agreement with a group of underwriters led by CIBC Capital Markets for 16 million preferreds to raise proceeds of C$400 million.

The deal included an option to purchase up to another 2 million shares, which was exercisable at any time up to two days before closing, according to the original announcement.

The rate will be 4.5% per year for the initial period ending Jan. 31, 2023. After that, every five years, the dividend rate will reset to the five-year Government of Canada bond yield plus 245 basis points.

The notes are callable at par beginning Jan. 31, 2023.

Proceeds will be used for general purposes.

Holders may convert their shares into series 48 non-cumulative floating-rate class A preferred shares beginning Jan. 31, 2023 and then every five years afterward.

The quarterly floating-rate dividend will be the Government of Canada Treasury bill yield plus 245 bps.

Holders may convert the series 48 shares into series 47 shares every five years beginning Jan. 31, 2028.

CIBC, a bank based in Toronto, said it would apply to list the series 47 shares on the Toronto Stock Exchange.

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