CIBC raises $200-million with preferred share sale

Canadian Imperial Bank of Commerce is raising another $200-million in capital through an issue of preferred shares, continuing the parade of banks making repeat visits to a market where retail investors are hungry for dividend income. The bank said yesterday it has sold eight million preferreds priced at $25 to a group of underwriters in a bought deal. It also has granted an option to buy an additional three million of the shares. CIBC has raised the ante: its new Series 35 preferred shares will pay a dividend of 6.5 per cent, compared with the 6.25-per-cent payout of most of the issues from other banks. CIBC said its new issue will pay 6.5 per cent a year until April 30, 2014. Then and on April 30 every five years thereafter, "the dividend rate will reset to be equal to the then current five-year Government of Canada bond yield plus 4.47 per cent," the bank said. CM (TSX) fell 11 cents to $43.89.