The Canadian Imperial Bank of Commerce sold $3.25 million of 18-month notes tied to the Standard & Poor’s 500 Index, the bank’s first offering in the U.S. since 2004.
The securities, issued Jan. 28, yield twice the gains of the index up to 12.3 percent with 10 percent of losses protected and 90 percent of capital at risk, according to a prospectus (CM:US) filed with the U.S. Securities and Exchange Commission. Wells Fargo & Co. distributed the notes for a 0.25 percent fee.
The bank last issued a U.S. structured note in March 2004. The five-year, $4 million security was principal-protected and linked to a basket of 10 stocks, according to a prospectus filed with the SEC.
Kevin Dove, a spokesman for the Vancouver-based bank, declined to comment on the offering.
Banks create structured notes by packaging debt with derivatives to offer customized bets to retail investors while earning fees and raising money. Derivatives are contracts whose value is derived from stocks, bonds, commodities and currencies, or events such as changes in interest rates or the weather.
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