(RTTNews) – CIBC (CM, CM.TO) announced a domestic public offering of $450 million in 5.898% Limited Recourse Capital Notes Series 8 (Non-Viability Contingent Capital or NVCC), classified as subordinated indebtedness. These notes, priced at $1,000 each, will be sold to select institutional investors through a dealer syndicate led by CIBC Capital Markets. The LRCNs will pay interest semi-annually at a fixed rate of 5.898% until January 28, 2031, after which the rate will reset every five years to the prevailing 5-year Government of Canada Yield plus 3.113%. Maturing on January 28, 2086, the offering is expected to close on September 29, 2025, subject to customary conditions.
In conjunction with the LRCNs, CIBC will issue Non-Cumulative 5-Year Fixed Rate Reset Class A Preferred Shares Series 63 (NVCC), which will be held by Computershare Trust Company of Canada as trustee of the CIBC LRCN Limited Recourse Trust. If CIBC fails to pay interest or principal on the LRCNs, holders will have recourse only to their share of the trust’s assets, primarily the Series 63 Shares, except in limited circumstances. Redemption of the LRCNs may occur between December 28 and January 28, starting in 2030 and every five years thereafter, with prior approval from the Superintendent of Financial Institutions (Canada) and proper notice.
CIBC intends to use the net proceeds for general corporate purposes, which may include redeeming existing capital securities or repaying other liabilities.
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