Canadian Imperial Bank of Commerce is preparing a sale of as much as C$1 billion ($710 million) of additional tier-one bonds, according to people familiar with the matter. The bonds, known as limited recourse capital notes, will mature in about 60 years, and the bank will have the option to buy them back after five years.
The notes are a type of loss-absorbing bond that can convert to equity during distress. The size of the offering will likely range from C$750 million to C$1 billion, the people said. They asked not to be identified because they aren't authorized to speak publicly.
Initial pricing on the CIBC notes is being discussed at three percentage points above government benchmarks, the people said. The bank announced earlier today that it is considering such a sale.
A spokesperson did not immediately respond to a request for comment.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing