Canadian Imperial Bank of Commerce (CIBC) has filed a preliminary prospectus with the US Securities and Exchange Commission (SEC) and on 4 February it is set to issue Growth Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside, its first tranche of retail structured notes for over six years.
The notes were priced on 28 January and are set to bring in over $3.2m in sales for CIBC.
The 18-month notes will be linked to the S&P500, offering a capital return at maturity of 100% plus 200% of any rise in the index over the investment period, subject to a maximum return of 111.5-112.5% (yet to be determined). If the final index level is lower than its initial level by no more than 10%, the capital return is 100%. Otherwise, the capital return is 100% minus 1% for every 1% fall, in excess of the initial 10% fall.
Wells Fargo is acting as the underwriter for the product, and will receive a minimum 0.25% discount and commission on the price of the securities for a total of $8,055. In addition, Wells Fargo will receive compensation for structuring and development costs, taking its overall cut to an estimated $13,796.
As previously reported by SRP, CIBC posted an official distribution agreement with Wells Fargo at the SEC in October 2012, following the Canadian bank's shelf registration for the notes in May.
According to SRP data, CIBC stopped issuing structured notes in the US retail market in 2006.
A spokesperson from the bank declined to comment.