|
Subject to Completion
Preliminary Term Sheet
dated November 29, 2024 |
Filed
Pursuant to Rule 433
Registration Statement No. 333-272447
(To Prospectus dated September 5, 2023,
Prospectus Supplement dated September 5, 2023 and
Product Supplement EQUITY STR-1 dated September 5, 2023) |
Units
$10 principal amount per unit
CUSIP No.
|
Pricing
Date* Settlement Date* Maturity Date*
|
December
, 2024
December
, 2024
December
, 2027 |
*Subject
to change based on the actual date the notes are priced for initial sale to the public (the
“pricing date”)
|
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Russell 2000® Index
§ Automatically
callable if the closing level of the Index on any Observation Date, occurring approximately one, two and three years after the pricing
date, is at or above the Starting Value
§ In
the event of an automatic call, the amount payable per unit will be:
§ [$10.95
to $11.05] if called on the first Observation Date
§ [$11.90
to $12.10] if called on the second Observation Date
§ [$12.85
to $13.15] if called on the final Observation Date
§ If
not called on the first two Observation Dates, a maturity of approximately three years
§ If
not called, 1-to-1 downside exposure to decreases in the Index, with up to 100.00% of the principal amount at risk
§ All
payments are subject to the credit risk of Canadian Imperial Bank of Commerce
§ No
periodic interest payments
§ In
addition to the underwriting discount set forth below, the notes include a hedging-related charge of $0.05 per unit. See “Structuring
the Notes”
§ Limited
secondary market liquidity, with no exchange listing
§ The
notes are unsecured debt securities and are not savings accounts or insured deposits of a bank. The notes are not insured or guaranteed
by the Canada Deposit Insurance Corporation, the U.S. Federal Deposit Insurance Corporation or any other governmental agency of the
United States, Canada, or any other jurisdiction
|
|
The notes are being issued by Canadian Imperial Bank of Commerce (“CIBC”).
There are important differences between the notes and a conventional debt security, including different investment risks and certain additional
costs. See “Risk Factors” and “Additional Risk Factors” beginning on page TS-6 of this term sheet and “Risk
Factors” beginning on page PS-7 of product supplement EQUITY STR-1.
The initial estimated value of the notes as of the pricing date is
expected to be between $9.196 and $9.595 per unit, which is less than the public offering price listed
below. See “Summary” on the following page, “Risk Factors” beginning on page TS-6 of this term
sheet and “Structuring the Notes” on page TS-12 of this term sheet for additional information. The actual value of your
notes at any time will reflect many factors and cannot be predicted with accuracy.
_______________________
None of the Securities and Exchange Commission (the “SEC”),
any state securities commission, or any other regulatory body has approved or disapproved of these securities or determined if this Note
Prospectus (as defined below) is truthful or complete. Any representation to the contrary is a criminal offense.
_________________________
|
Per Unit |
Total |
Public offering price(1) |
$ 10.00 |
$ |
Underwriting discount(1) |
$ 0.20 |
$ |
Proceeds, before expenses, to CIBC |
$ 9.80 |
$ |
| (1) | For any purchase of 300,000 units or more in a single transaction by an individual investor or in combined transactions with the investor's
household in this offering, the public offering price and the underwriting discount will be $9.95 per unit and $0.15 per unit, respectively.
See “Supplement to the Plan of Distribution” below. |
The notes:
Are Not FDIC Insured |
Are Not Bank Guaranteed |
May Lose Value |
BofA Securities
December , 2024
Autocallable
Strategic Accelerated Redemption Securities®
Linked to the Russell 2000®
Index, due December , 2027 |
|
Summary
The Autocallable Strategic Accelerated Redemption Securities®
Linked to the Russell 2000® Index, due December , 2027 (the “notes”) are our senior unsecured debt
securities. The notes are not guaranteed or insured by the Canada Deposit Insurance Corporation, the U.S. Federal Deposit Insurance Corporation
or any other governmental agency of the United States, Canada or any other jurisdiction or secured by collateral. The notes are not bail-inable
debt securities (as defined on page 6 of the prospectus). The notes will rank equally with all of our other unsecured and unsubordinated
debt. Any payments due on the notes, including any repayment of principal, will be subject to the credit risk of CIBC. The notes will
be automatically called at the applicable Call Amount if the closing level of the Market Measure, which is the Russell 2000®
Index (the “Index”), on any Observation Date is equal to or greater than the Starting Value. You will not receive any notice
from us if the notes are automatically called. If your notes are not called, you will lose all or a portion of the principal amount of
your notes. Any payments on the notes will be calculated based on the $10 principal amount per unit and will depend on the performance
of the Index, subject to our credit risk. See “Terms of the Notes” below.
The economic terms of the notes (including the Call Premiums and the
Call Amounts) are based on our internal funding rate, which is the rate we would pay to borrow funds through the issuance of market-linked
notes, and the economic terms of certain related hedging arrangements. Our internal funding rate is typically lower than the rate we would
pay when we issue conventional fixed rate debt securities. This difference in funding rate, as well as the underwriting discount and the
hedging-related charge and certain service fee described below, will reduce the economic terms of the notes to you and the initial estimated
value of the notes on the pricing date. Due to these factors, the public offering price you pay to purchase the notes will be greater
than the initial estimated value of the notes.
On the cover page of this term sheet, we have provided the initial
estimated value range for the notes. This initial estimated value range was determined based on our pricing models. The initial estimated
value as of the pricing date will be based on our internal funding rate on the pricing date, market conditions and other relevant factors
existing at that time, and our assumptions about market parameters. For more information about the initial estimated value and the structuring
of the notes, see “Structuring the Notes” on page TS-12.
Terms of the Notes |
Payment Determination |
Issuer: |
Canadian Imperial Bank of Commerce (“CIBC”) |
Automatic Call Provision:
Redemption Amount Determination:
If the notes are not called, you will receive the Redemption Amount
per unit on the maturity date, determined as follows:
Because the Threshold Value for the notes is equal to the Starting
Value, you will lose all or a portion of your investment if the Ending Value is less than the Starting Value. |
Principal Amount: |
$10.00 per unit |
Term: |
Approximately three years, if not called on the first two Observation Dates |
Market Measure: |
The Russell 2000® Index (Bloomberg symbol: “RTY”), a price return index |
Starting Value: |
The closing level of the Index on the pricing date |
Ending Value: |
The Observation Level of the Index on the final Observation Date |
Observation Level: |
The closing level of the Index on any Observation Date |
Observation Dates: |
On or about December , 2025, December , 2026 and December ,
2027 (the final Observation Date), approximately one, two and three years after the pricing date.
The scheduled Observation Dates are subject to postponement in the
event of Market Disruption Events, as described on page PS-22 of product supplement EQUITY STR-1. |
Call Level: |
100% of the Starting Value |
Call Amounts (per Unit) and Call Premiums: |
[$10.95 to $11.05], representing a Call Premium of [9.50% to 10.50%]
of the principal amount, if called on the first Observation Date; [$11.90 to $12.10], representing a Call Premium of [19.00% to 21.00%]
of the principal amount, if called on the second Observation Date; and [$12.85 to $13.15], representing a Call Premium of [28.50% to 31.50%]
of the principal amount, if called on the final Observation Date.
The actual Call Amounts and Call Premiums will be determined on the
pricing date. |
Call Settlement Dates: |
Approximately the fifth business day following the applicable Observation Date, subject to postponement as described on page PS-22 of product supplement EQUITY STR-1; provided however, that the Call Settlement Date related to the final Observation Date will be the maturity date. |
Threshold Value: |
100.00% of the Starting Value |
Fees and Charges: |
The underwriting discount of $0.20 per unit listed on the cover page and the hedging-related charge of $0.05 per unit described in “Structuring the Notes” on page TS-12. |
Calculation Agent: |
BofA Securities, Inc. (“BofAS”) |
Autocallable Strategic Accelerated Redemption Securities® | TS-2 |
Autocallable
Strategic Accelerated Redemption Securities®
Linked to the Russell 2000®
Index, due December , 2027 |
|
The terms and risks of the notes are contained in this term sheet and
in the following:
| § | Product supplement EQUITY STR-1 dated September 5, 2023: |
https://www.sec.gov/Archives/edgar/data/1045520/000110465923098260/tm2325339d4_424b5.htm
| § | Prospectus supplement dated September 5, 2023: |
These documents (together, the “Note Prospectus”) have been
filed as part of a registration statement with the SEC, which may, without cost, be accessed on the SEC website as indicated above or
obtained from Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) or BofAS by calling 1-800-294-1322.
Before you invest, you should read the Note Prospectus, including this term sheet, for information about us and this offering. Any prior
or contemporaneous oral statements and any other written materials you may have received are superseded by the Note Prospectus. Capitalized
terms used but not defined in this term sheet have the meanings set forth in product supplement EQUITY STR-1. Unless otherwise indicated
or unless the context requires otherwise, all references in this document to “we,” “us,” “our,” or
similar references are to CIBC.
Investor Considerations
You may wish to consider an investment in the notes if: |
The notes may not be an appropriate investment for you if: |
|
|
§ You
anticipate that the closing level of the Index on any of the Observation Dates will be equal to or greater than the Starting Value and,
in that case, you accept an early exit from your investment.
§ You
accept that the return on the notes will be limited to the return represented by the applicable Call Premium even if the percentage change
in the level of the Index is significantly greater than the applicable Call Premium.
§ You
are willing to risk a loss of principal if the notes are not automatically called.
§ You
are willing to forgo the interest payments that are paid on conventional interest bearing debt securities.
§ You
are willing to forgo dividends or other benefits of owning the stocks included in the Index.
§ You
are willing to accept a limited or no market for sales prior to maturity, and understand that the market prices for the notes, if any,
will be affected by various factors, including our actual and perceived creditworthiness, our internal funding rate and fees and charges
on the notes.
§ You
are willing to assume our credit risk, as issuer of the notes, for all payments under the notes, including the Call Amount or the Redemption
Amount. |
§ You
wish to make an investment that cannot be automatically called prior to maturity.
§ You
anticipate that the Observation Level will be less than the Call Level on each Observation Date.
§ You
seek an uncapped return on your investment.
§ You
seek principal repayment or preservation of capital.
§ You
seek interest payments or other current income on your investment.
§ You
want to receive dividends or other distributions paid on the stocks included in the Index.
§ You
seek an investment for which there will be a liquid secondary market.
§ You
are unwilling or are unable to take market risk on the notes or to take our credit risk as issuer of the notes. |
We urge you to consult your investment, legal, tax, accounting, and other
advisors before you invest in the notes.
Autocallable Strategic Accelerated Redemption Securities® | TS-3 |
Autocallable
Strategic Accelerated Redemption Securities®
Linked to the Russell 2000®
Index, due December , 2027 |
|
Examples of Hypothetical Payments
The following examples are for purposes of illustration only. They are
based on hypothetical values and show hypothetical returns on the notes. They illustrate the calculation of the Call Amount
or Redemption Amount, as applicable, based on the hypothetical terms set forth below. The actual amount you receive and the resulting
return will depend on the actual Starting Value, Threshold Value, Call Level, Observation Levels, Call Premiums, and term of your investment.
The following examples do not take into account any tax consequences
from investing in the notes. These examples are based on:
| 1) | a Starting Value of 100.00; |
| 2) | a Threshold Value of 100.00; |
| 3) | a Call Level of 100.00; |
| 4) | an expected term of the notes of approximately three years, if the notes are not called on the first two Observation Dates; |
| 5) | a Call Premium of 10.00% of the principal amount if the notes are called
on the first Observation Date; 20.00% if called on the second Observation Date; and 30.00% if called on the final Observation Date (the
midpoint of the applicable Call Premium ranges); and |
| 6) | Observation Dates occurring approximately one, two and three years after the pricing date. |
The hypothetical Starting Value of 100.00 used in these examples
has been chosen for illustrative purposes only, and does not represent a likely actual Starting Value of the Index.
For recent actual levels of the Index, see “The Index” section
below. The Index is a price return index and as such the level of the Index will not include any income generated by dividends paid on
the stocks included in the Index, which you would otherwise be entitled to receive if you invested in those stocks directly. In addition,
all payments on the notes are subject to issuer credit risk.
Notes Are Called on an Observation Date
The notes will be called at $10.00 plus the applicable Call Premium if
the Observation Level on one of the Observation Dates is equal to or greater than the Call Level. After the notes are called, they will
no longer remain outstanding and there will not be any further payments on the notes.
Example 1 - The Observation Level on the first Observation Date
is 110.00. Therefore, the notes will be called at $10.00 plus the Call Premium of $1.00 = $11.00 per unit.
Example 2 - The Observation Level on the first Observation Date
is below the Call Level, but the Observation Level on the second Observation Date is 150.00. Therefore, the notes will be called at $10.00
plus the Call Premium of $2.00 = $12.00 per unit.
Example 3 - The Observation Levels on the first two Observation
Dates are below the Call Level, but the Observation Level on the third and final Observation Date is 105.00. Therefore, the notes will
be called at $10.00 plus the Call Premium of $3.00 = $13.00 per unit.
Notes Are Not Called on Any Observation Date
Example 4 - The notes are not called on any Observation Date and
the Ending Value is less than the Threshold Value. The Redemption Amount will be less, and possibly significantly less, than the principal
amount. For example, if the Ending Value is 50.00, the Redemption Amount per unit will be:
Autocallable Strategic Accelerated Redemption Securities® | TS-4 |
Autocallable
Strategic Accelerated Redemption Securities®
Linked to the Russell 2000®
Index, due December , 2027 |
|
Summary of the Hypothetical Examples
|
|
|
Notes Are Called on an Observation Date |
Notes Are Not Called on Any
Observation Date |
|
|
Example 1 |
Example 2 |
Example 3 |
Example 4 |
Starting Value |
100.00 |
100.00 |
100.00 |
100.00 |
Call Level |
100.00 |
100.00 |
100.00 |
100.00 |
Threshold Value |
100.00 |
100.00 |
100.00 |
100.00 |
Observation Level on the First Observation Date |
110.00 |
90.00 |
90.00 |
88.00 |
Observation Level on the Second Observation Date |
N/A |
150.00 |
80.00 |
78.00 |
Observation Level on the Final Observation Date |
N/A |
N/A |
105.00 |
50.00 |
Return on the Index |
10.00% |
50.00% |
5.00% |
-50.00% |
Return on the Notes |
10.00% |
20.00% |
30.00% |
-50.00% |
Call Amount / Redemption Amount per Unit |
$11.00 |
$12.00 |
$13.00 |
$5.00 |
Autocallable Strategic Accelerated Redemption Securities® | TS-5 |
Autocallable
Strategic Accelerated Redemption Securities®
Linked to the Russell 2000®
Index, due December , 2027 |
|
Risk Factors
There are important differences between the notes and a conventional
debt security. An investment in the notes involves significant risks, including those listed below. You should carefully review the more
detailed explanation of risks relating to the notes in the “Risk Factors” sections beginning on page PS-7 of product
supplement EQUITY STR-1, page S-1 of the prospectus supplement, and page 1 of the prospectus identified above. We also urge
you to consult your investment, legal, tax, accounting, and other advisors before you invest in the notes.
Structure-related Risks
| § | If the notes are not automatically called, you will lose up to 100% of the
principal amount. |
| § | Your
investment return is limited to the return represented by the applicable Call Premium and may be less than a comparable investment directly
in the stocks included in the Index. |
| § | Your
return on the notes may be less than the yield you could earn by owning a conventional fixed or floating rate debt security of comparable
maturity. |
| § | Payments on the notes are subject to our credit risk, and actual or perceived
changes in our creditworthiness are expected to affect the value of the notes. If we become insolvent or are unable to pay our obligations,
you may lose your entire investment. |
Valuation- and Market-related Risks
| § | Our initial estimated value of the notes will be lower than the public offering
price of the notes. The public offering price of the notes will exceed our initial estimated value because costs associated with selling
and structuring the notes, as well as hedging the notes, all as further described in “Structuring the Notes” on page TS-12,
are included in the public offering price of the notes. |
| § | Our initial estimated value does not represent future values of the notes
and may differ from others’ estimates. Our initial estimated value is only an estimate, which will be determined by reference to
our internal pricing models when the terms of the notes are set. This estimated value will be based on market conditions and other relevant
factors existing at that time, our internal funding rate on the pricing date and our assumptions about market parameters, which can include
volatility, dividend rates, interest rates and other factors. Different pricing models and assumptions could provide valuations for the
notes that are greater or less than our initial estimated value. In addition, market conditions and other relevant factors in the future
may change, and any assumptions may prove to be incorrect. On future dates, the market value of the notes could change significantly based
on, among other things, changes in market conditions, including the level of the Index, our creditworthiness, interest rate movements
and other relevant factors, which may impact the price at which MLPF&S, BofAS or any other party would be willing to buy notes from
you in any secondary market transactions. Our estimated value does not represent a minimum price at which MLPF&S, BofAS or any other
party would be willing to buy your notes in any secondary market (if any exists) at any time. |
| § | Our initial estimated value of the notes will not be determined by reference
to credit spreads for our conventional fixed-rate debt. The internal funding rate to be used in the determination of our initial estimated
value of the notes generally represents a discount from the credit spreads for our conventional fixed-rate debt. The discount is based
on, among other things, our view of the funding value of the notes as well as the higher issuance, operational and ongoing liability management
costs of the notes in comparison to those costs for our conventional fixed-rate debt. If we were to use the interest rate implied by our
conventional fixed-rate debt, we would expect the economic terms of the notes to be more favorable to you. Consequently, our use of an
internal funding rate for market-linked notes would have an adverse effect on the economic terms of the notes, the initial estimated value
of the notes on the pricing date, and any secondary market prices of the notes. |
| § | A trading market is not expected to develop for the notes. None of us, MLPF&S
or BofAS is obligated to make a market for, or to repurchase, the notes. There is no assurance that any party will be willing to purchase
your notes at any price in any secondary market. |
Conflict-related Risks
| § | Our business, hedging and trading activities, and those of MLPF&S, BofAS
and our respective affiliates (including trades in shares of companies included in the Index), and any hedging and trading activities
we, MLPF&S, BofAS or our respective affiliates engage in for our clients’ accounts, may affect the market value and return of
the notes and may create conflicts of interest with you. |
| § | There may be potential conflicts of interest involving the calculation agent,
which is BofAS. We have the right to appoint and remove the calculation agent. |
Market Measure-related Risks
| § | The Index sponsor may adjust the Index in a way that affects its level, and
has no obligation to consider your interests. |
| § | As a noteholder, you will have no rights of a holder of any securities represented
by the Index, and you will not be entitled to receive securities, dividends or other distributions by the issuers of those securities. |
Autocallable Strategic Accelerated Redemption Securities® | TS-6 |
Autocallable
Strategic Accelerated Redemption Securities®
Linked to the Russell 2000®
Index, due December , 2027 |
|
| § | While we, MLPF&S, BofAS or our respective affiliates may from time to
time own securities of the companies included in the Index, we, MLPF&S, BofAS and our respective affiliates do not control any company
included in the Index, and have not verified any disclosure made by any other company. |
Tax-related Risks
| § | The U.S. federal income tax consequences of the notes are uncertain, and may
be adverse to a holder of the notes. See “Summary of U.S. Federal Income Tax Consequences” below and “U.S. Federal Income
Tax Summary” beginning on page PS-40 of product supplement EQUITY STR-1. For a discussion of the Canadian federal income tax
consequences of investing in the notes, see “Material Income Tax Consequences—Canadian Taxation” in the prospectus,
as supplemented by the discussion under “Summary of Canadian Federal Income Tax Considerations” herein. |
Additional Risk Factors
The notes are subject to risks associated with small-size capitalization
companies.
The stocks composing the Index are issued by companies with small-sized
market capitalization. The stock prices of small-size companies may be more volatile than stock prices of large capitalization companies.
Small-size capitalization companies may be less able to withstand adverse economic, market, trade and competitive conditions relative
to larger companies. Small-size capitalization companies may also be more susceptible to adverse developments related to their products
or services.
Autocallable Strategic Accelerated Redemption Securities® | TS-7 |
Autocallable
Strategic Accelerated Redemption Securities®
Linked to the Russell 2000®
Index, due December , 2027 |
|
The Index
All disclosures contained in this term sheet regarding the Index, including,
without limitation, its make-up, method of calculation and changes in its components, have been derived from publicly available sources,
which we have not independently verified. The information reflects the policies of, and is subject to change by, FTSE Russell (the “Index
sponsor”). The Index sponsor, which licenses the copyright and all other rights to the Index, has no obligation to continue to publish,
and may discontinue publication of, the Index. The consequences of the Index sponsor discontinuing publication of the Index are discussed
in the section entitled “Description of the Notes—Discontinuance of an Index” on page PS-27 of product supplement
EQUITY STR-1. None of us, the calculation agent, MLPF&S or BofAS accepts any responsibility for the calculation, maintenance or publication
of the Index or any successor index.
The Index is designed to measure the performance of the small-capitalization
segment of the U.S. equity market. It is a subset of the Russell 3000® Index and represents approximately 10% of the total
market capitalization of that index. The Russell 3000® Index is designed to measure the performance of the largest 3,000
U.S. companies, which represent approximately 97% of the investable U.S. equity market. The Index is reported by Bloomberg L.P. under
the ticker symbol “RTY.”
Defining Eligible Securities
All companies that are determined to be part of
the U.S. equity market under FTSE Russell’s country-assignment methodology are included in the Russell U.S. indices. If a company
is incorporated in, has a stated headquarters location in, and also trades in the same country (American Depositary Receipts and American
Depositary Shares are not eligible), the company is assigned to the equity market of its country of incorporation. If any of the three
do not match, FTSE Russell then defines three Home Country Indicators (“HCI”): country of incorporation, country of headquarters,
and country of the most liquid exchange as defined by two-year average daily dollar trading volume from all exchanges within a country.
Using the HCIs, FTSE Russell cross-compares the primary location of the company’s assets with the three HCIs. If the primary location
of the company’s assets matches any of the HCIs, then the company is assigned to its primary asset location. If there is insufficient
information to determine the country in which the company’s assets are primarily located, FTSE Russell will use the primary location
of the company’s revenues for the same cross-comparison and will assign the company to the appropriate country in a similar fashion.
FTSE Russell uses an average of two years of assets or revenue data for analysis to reduce potential turnover. If conclusive country details
cannot be derived from assets or revenue, FTSE Russell assigns the company to the country where its headquarters are located unless the
country is a Benefit Driven Incorporation country; in which case, the company will be assigned to the country of its most liquid stock
exchange. For any companies incorporated or headquartered in a U.S. territory, including countries such as Puerto Rico, Guam, and U.S.
Virgin Islands, a U.S. HCI is assigned. If a company is designated as a Chinese “N Share,” it will not be considered for inclusion
within the Russell U.S. indices. An “N Share” is a company incorporated outside of mainland China that trades on the New York
Stock Exchange (the “NYSE”), the Nasdaq exchange or the NYSE American. An N Share will have a headquarter or principle executive
office or its establishment in mainland China, with a majority of its revenues or assets derived from the People’s Republic of China.
All securities eligible for inclusion in Russell
U.S. indices must trade on an eligible U.S. exchange. The eligible U.S. exchanges are: CBOE, NYSE, NYSE American, NYSE Arca and Nasdaq.
Bulletin board, pink-sheets, and over-the-counter (“OTC”) traded securities are not eligible for inclusion, including securities
for which prices are displayed on the FINRA ADF.
Preferred and convertible preferred stock, redeemable
shares, participating preferred stock, warrants, rights, installment receipts and trust receipts are not eligible for inclusion in the
Russell U.S. indices. Royalty trusts, U.S. limited liability companies, closed-end investment companies, blank-check companies, special-purpose
acquisition companies, and limited partnerships are also not eligible for inclusion in the Russell U.S. indices. Business development
companies, exchange traded funds and mutual funds are also excluded.
If an eligible company trades under multiple share
classes, FTSE Russell will review each share class independently for U.S. index inclusion. Stocks must trade at or above $1.00 (on its
primary exchange) on the rank day in May of each year to be eligible for inclusion during annual reconstitution. However, in order
to reduce unnecessary turnover, if an existing index member’s closing price is less than $1.00 on rank day, it will be considered
eligible if the average of the daily closing prices (from its primary exchange) during the 30 days prior to the rank day is equal to or
greater than $1.00. If an existing index member does not trade on the rank day in May, it must price at $1.00 or above on another eligible
U.S. exchange to remain eligible. A stock added during the quarterly initial public offering (“IPO”) process is considered
a new index addition and therefore must have a closing price on its primary exchange at or above $1.00 on the last day of the IPO eligibility
period in order to qualify for index inclusion. Companies with a total market capitalization of less than $30 million are not eligible
for inclusion in the Russell U.S. indices. Similarly, companies with only 5% or less of their shares available in the marketplace are
not eligible for the Russell U.S. indices.
Annual Reconstitution
Annual reconstitution is the process by which all
Russell indices are completely rebuilt. Reconstitution is a vital part of the creation of a benchmark which accurately represents a particular
market segment. Companies may get bigger or smaller over time, or periodically undergo changes in their style characteristics. Reconstitution
ensures that the companies continue to be correctly represented in the appropriate Russell indices.
On the rank day in May each year, all eligible
securities are ranked by their total market capitalization. The largest 4,000 become the Russell 3000E Index, and the other Russell U.S.
indices are determined from that set of securities. If there are not 4,000 eligible securities in the U.S. market, the entire eligible
set is included.
Autocallable Strategic Accelerated Redemption Securities® | TS-8 |
Autocallable
Strategic Accelerated Redemption Securities®
Linked to the Russell 2000®
Index, due December , 2027 |
|
Reconstitution occurs on the fourth Friday in June.
A full calendar for reconstitution is published each spring.
Eligible IPOs are added to the Russell U.S. indices
quarterly to ensure that new additions to the institutional investing opportunity set are reflected in the representative indices. FTSE
Russell focuses on IPOs each quarter because it is important to reflect market additions between reconstitution periods. Companies filing
an IPO registration statement (or the local equivalent when outside the United States) and listing with the same quarter on an eligible
U.S. exchange are reviewed for eligibility regardless of previous trading activity (exceptional or unique events may induce extraordinary
treatment which will be communicated appropriately). Companies currently trading on foreign exchanges or OTC markets will be reviewed
for eligibility if: (1) the company files an IPO statement for an eligible U.S. exchange; and (2) the offering is announced
to the market and confirmed by FTSE Russell’s vendors as an IPO.
Capitalization Adjustments
After membership is determined, a security’s
shares are adjusted to include only those shares available to the public, which is often referred to as “free float.” The
purpose of this adjustment is to exclude from market calculations the capitalization that is not available for purchase and is not part
of the investable opportunity set. Stocks in the Russell U.S. indices are weighted by their available (also called “float-adjusted”)
market capitalization, which is calculated by multiplying the primary closing price by the available shares. Adjustments to shares are
reviewed at reconstitution, during quarterly update cycles and for corporate actions such as mergers.
Certain types of shares are considered restricted
and removed from total market capitalization to arrive at free float or available market capitalization, such as shares directly owned
by state, regional, municipal and local governments (excluding shares held by independently managed pension schemes for governments),
shares held by directors, senior executives and managers of the company, and by their family and direct relations, and by companies with
which they are affiliated, and shares with high shareholding concentration, etc.
Corporate Action-Driven Changes
FTSE Russell defines a corporate action as an action
on shareholders with a prescribed ex-date (e.g., rights issue, special dividend, stock split). The share price and indices in which the
company is included will be subject to an adjustment on the ex-date. This is a mandatory event. FTSE Russell defines a corporate event
as a reaction to company news (event) that might impact the index depending on the index rules. FTSE Russell applies corporate actions
and events to its indices on a daily basis. Depending upon the time an action is determined to be final, FTSE Russell will either (1) apply
the action before the open on the ex-date, or (2) apply the action providing appropriate notice, referred to as “delayed action.”
For merger and spin-off transactions that are effective
between rank day in May and the business day immediately before the index lock down takes effect prior to annual reconstitution in
June, the market capitalizations of the impacted securities are recalculated and membership is reevaluated as of the effective date of
the corporate action. For corporate events that occur during the reconstitution lock down period (which take effect from the open on the
first day of the lock-down period onwards), market capitalizations and memberships will not be reevaluated. Non index members that have
been considered ineligible as of rank day will not be reevaluated in the event of a subsequent corporate action that occurs between rank
day and the reconstitution effective date.
If a company distributes shares of an additional
share class to its existing shareholders through a mandatory corporate action, FTSE Russell evaluates the additional share class for separate
index membership. The new share class will be deemed eligible if the market capitalization of the distributed shares meets the minimum
size requirement (above the minimum market capitalization breakpoint defined as the smallest member of the Russell 3000E Index from
the previous rebalance, adjusted for performance to date.) Index membership of additional share classes that are added due to corporate
actions will mirror that of the pricing vehicle, as will style and stability probabilities. If the distributed shares of an additional
share class do not meet eligibility requirements, they will not be added to the index (the distributed shares may be added to the index
temporarily until they are settled and listed to enable index replication).
“No Replacement” Rule: Securities that
leave a Russell U.S. index for any reason (e.g., mergers, acquisitions or other similar corporate activities) are not replaced. Thus,
the number of securities in a Russell U.S. index over the year will fluctuate according to corporate activity.
To maintain representativeness and maximize the available investment
opportunity for index managers, the Russell U.S. indices are reviewed quarterly for updates to shares outstanding and to free floats used
within the index calculation. The changes are implemented quarterly, on the third Friday of March, September and December (after
the close). The June reconstitution will continue to be implemented on the last Friday of June (unless the last Friday occurs
on the 29th or 30th, in which case reconstitution will occur on the Friday prior).
Autocallable Strategic Accelerated Redemption Securities® | TS-9 |
Autocallable
Strategic Accelerated Redemption Securities®
Linked to the Russell 2000®
Index, due December , 2027 |
|
The following graph shows the daily historical performance of
the Index in the period from January 1, 2014 through November 21, 2024. We obtained this historical data from Bloomberg L.P. We have
not independently verified the accuracy or completeness of the information obtained from Bloomberg L.P. On November 21, 2024, the closing
level of the Index was 2,364.018.
Historical Performance of the Index
This historical data on the Index is not necessarily indicative
of the future performance of the Index or what the value of the notes may be. Any historical upward or downward trend in the level of
the Index during any period set forth above is not an indication that the level of the Index is more or less likely to increase or decrease
at any time over the term of the notes.
Before investing in the notes, you should consult publicly available
sources for the levels of the Index.
License Agreement
We have entered into a non-exclusive license agreement with FTSE Russell
whereby we, in exchange for a fee, are permitted to use the Index and its related trademarks in connection with certain securities, including
the notes.
The license agreement between FTSE Russell and us provides that the following
language must be set forth when referring to any FTSE Russell indexes or the FTSE Russell trademarks in this term sheet:
“‘Russell 2000®’ and ‘Russell
3000®’ are trademarks of FTSE Russell and have been licensed for use by CIBC. The notes are not sponsored, endorsed,
sold, or promoted by FTSE Russell. FTSE Russell makes no representation or warranty, express or implied, to the owners of the notes or
any member of the public regarding the advisability of investing in securities generally or in the notes particularly or the ability of
the Index to track general stock market performance or a segment of the same. FTSE Russell’s publication of the Index in no way
suggests or implies an opinion by FTSE Russell as to the advisability of investment in any or all of the notes upon which the Index is
based. FTSE Russell’s only relationship to CIBC and its affiliates is the licensing of certain trademarks and trade names of FTSE
Russell and of the Index which is determined, composed and calculated by FTSE Russell without regard to CIBC and its affiliates or the
notes. FTSE Russell is not responsible for and has not reviewed the notes nor any associated literature or publications and FTSE Russell
makes no representation or warranty, express or implied, as to their accuracy or completeness, or otherwise. FTSE Russell reserves the
right, at any time and without notice, to alter, amend, terminate or in any way change the Index. FTSE Russell has no obligation or liability
in connection with the administration, marketing or trading of the notes.
FTSE RUSSELL DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS
OF THE INDEX OR ANY DATA INCLUDED THEREIN AND FTSE RUSSELL SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.
FTSE RUSSELL MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY CIBC AND/OR ITS AFFILIATES, INVESTORS, OWNERS
OF THE NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR ANY DATA INCLUDED THEREIN. FTSE RUSSELL MAKES NO EXPRESS OR IMPLIED
WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE INDEX
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
Autocallable Strategic Accelerated Redemption Securities® | TS-10 |
Autocallable
Strategic Accelerated Redemption Securities®
Linked to the Russell 2000®
Index, due December , 2027 |
|
EVENT SHALL FTSE RUSSELL HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT,
OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
Supplement to the Plan of Distribution
Under our distribution agreement with BofAS, BofAS will purchase the
notes from us as principal at the public offering price indicated on the cover of this term sheet, less the indicated underwriting discount.
MLPF&S will in turn purchase the notes from BofAS for resale, and
it will receive a selling concession in connection with the sale of the notes in an amount up to the full amount of the underwriting discount
set forth on the cover of this term sheet.
We will pay a fee to a broker dealer in which an affiliate of BofAS has
an ownership interest for providing certain services with respect to this offering, which will reduce the economic terms of the notes
to you.
We may deliver the notes against payment therefor in New York, New York
on a date that is greater than one business day following the pricing date. Under Rule 15c6-1 of the Securities Exchange Act of 1934,
trades in the secondary market generally are required to settle in one business day, unless the parties to any such trade expressly agree
otherwise. Accordingly, if the initial settlement of the notes occurs more than one business day from the pricing date, purchasers who
wish to trade the notes more than one business day prior to the original issue date will be required to specify alternative settlement
arrangements to prevent a failed settlement.
The notes will not be listed on any securities exchange. In the original
offering of the notes, the notes will be sold in minimum investment amounts of 100 units. If you place an order to purchase the notes,
you are consenting to MLPF&S and/or one of its affiliates acting as a principal in effecting the transaction for your account.
MLPF&S and BofAS may repurchase and resell the notes, with repurchases
and resales being made at prices related to then-prevailing market prices or at negotiated prices, and these prices will include MLPF&S’s
and BofAS’s trading commissions and mark-ups or mark-downs. MLPF&S and BofAS may act as principal or agent in these market-making
transactions; however, neither is obligated to engage in any such transactions. At their discretion, for a short, undetermined initial
period after the issuance of the notes, MLPF&S and BofAS may offer to buy the notes in the secondary market at a price that may exceed
the initial estimated value of the notes. Any price offered by MLPF&S or BofAS for the notes will be based on then-prevailing market
conditions and other considerations, including the performance of the Index and the remaining term of the notes. However, none of us,
MLPF&S, BofAS or any of our respective affiliates is obligated to purchase your notes at any price or at any time, and we cannot assure
you that we, MLPF&S, BofAS or any of our respective affiliates will purchase your notes at a price that equals or exceeds the initial
estimated value of the notes.
The value of the notes shown on your account statement will be based
on BofAS’s estimate of the value of the notes if BofAS or another of its affiliates were to make a market in the notes, which it
is not obligated to do. That estimate will be based upon the price that BofAS may pay for the notes in light of then-prevailing market
conditions, and other considerations, as mentioned above, and will include transaction costs. At certain times, this price may be higher
than or lower than the initial estimated value of the notes.
The distribution of the Note Prospectus in connection with these offers
or sales will be solely for the purpose of providing investors with the description of the terms of the notes that was made available
to investors in connection with their initial offering. Secondary market investors should not, and will not be authorized to, rely on
the Note Prospectus for information regarding CIBC or for any purpose other than that described in the immediately preceding sentence.
An investor’s household, as referenced on the cover of this term
sheet, will generally include accounts held by any of the following, as determined by MLPF&S in its discretion and acting in good
faith based upon information then available to MLPF&S:
| • | the investor’s spouse (including a domestic partner), siblings, parents, grandparents, spouse’s parents, children and
grandchildren, but excluding accounts held by aunts, uncles, cousins, nieces, nephews or any other family relationship not directly above
or below the individual investor; |
| • | a family investment vehicle, including foundations, limited partnerships and personal holding companies, but only if the beneficial
owners of the vehicle consist solely of the investor or members of the investor’s household as described above; and |
| • | a trust where the grantors and/or beneficiaries of the trust consist solely of the investor or members of the investor’s household
as described above; provided that, purchases of the notes by a trust generally cannot be aggregated together with any purchases made by
a trustee’s personal account. |
Purchases in retirement accounts will not be considered part of the same
household as an individual investor’s personal or other non-retirement account, except for individual retirement accounts (“IRAs”),
simplified employee pension plans (“SEPs”), savings incentive match plan for employees (“SIMPLEs”), and single-participant
or owners only accounts (i.e., retirement accounts held by self-employed individuals, business owners or partners with no employees other
than their spouses).
Please contact your Merrill financial advisor if you have any questions
about the application of these provisions to your specific circumstances or think you are eligible.
Autocallable Strategic Accelerated Redemption Securities® | TS-11 |
Autocallable
Strategic Accelerated Redemption Securities®
Linked to the Russell 2000®
Index, due December , 2027 |
|
Structuring the Notes
The notes are our debt securities, the return on which is linked to the
performance of the Index. As is the case for all of our debt securities, including our market-linked notes, the economic terms of the
notes reflect our actual or perceived creditworthiness at the time of pricing. The internal funding rate we use in pricing the market-linked
notes is typically lower than the rate we would pay when we issue conventional fixed-rate debt securities of comparable maturity. This
difference is based on, among other things, our view of the funding value of the notes as well as the higher issuance, operational and
ongoing liability management costs of the notes in comparison to those costs for our conventional fixed-rate debt. This generally relatively
lower internal funding rate, which is reflected in the economic terms of the notes, along with the fees and charges associated with market-linked
notes, typically results in the initial estimated value of the notes on the pricing date being less than their public offering price.
Payments on the notes, including the amount you receive at maturity or
upon an automatic call, will be calculated based on the performance of the Index and the $10 per unit principal amount. In order to meet
these payment obligations, at the time we issue the notes, we may choose to enter into certain hedging arrangements (which may include
call options, put options or other derivatives) with BofAS or one of its affiliates. The terms of these hedging arrangements are determined
by seeking bids from market participants, including BofAS and its affiliates, and take into account a number of factors, including our
creditworthiness, interest rate movements, the volatility of the Index, the tenor of the notes and the tenor of the hedging arrangements.
The economic terms of the notes and their initial estimated value depend in part on the terms of these hedging arrangements.
BofAS has advised us that the hedging arrangements will include a hedging-related
charge of approximately $0.05 per unit, reflecting an estimated profit to be credited to BofAS from these transactions. Since hedging
entails risk and may be influenced by unpredictable market forces, additional profits and losses from these hedging arrangements may be
realized by BofAS or any third party hedge providers.
For further information, see “Risk Factors—Valuation- and
Market-related Risks” beginning on page PS-8 of product supplement EQUITY STR-1 and “Use of Proceeds” on page S-14
of prospectus supplement.
Autocallable Strategic Accelerated Redemption Securities® | TS-12 |
Autocallable
Strategic Accelerated Redemption Securities®
Linked to the Russell 2000®
Index, due December , 2027 |
|
Summary of Canadian Federal Income Tax Considerations
In the opinion of Blake, Cassels & Graydon LLP, our Canadian
tax counsel, the following summary describes the principal Canadian federal income tax considerations under the Income Tax Act (Canada)
and the regulations thereto (the “Canadian Tax Act”) generally applicable at the date hereof to a purchaser who acquires beneficial
ownership of a note pursuant to this term sheet and who for the purposes of the Canadian Tax Act and at all relevant times: (a) is
neither resident nor deemed to be resident in Canada; (b) deals at arm’s length with CIBC and any transferee resident (or deemed
to be resident) in Canada to whom the purchaser disposes of the note; (c) does not use or hold and is not deemed to use or hold the
note in, or in the course of, carrying on a business in Canada; (d) is entitled to receive all payments (including any interest and
principal) made on the note; (e) is not a, and deals at arm’s length with any, “specified shareholder” of CIBC
for purposes of the thin capitalization rules in the Canadian Tax Act; and (f) is not an entity in respect of which CIBC or
any transferee resident (or deemed to be resident) in Canada to whom the purchaser disposes of, loans or otherwise transfers the note
is a “specified entity”, and is not a “specified entity” in respect of such a transferee, in each case, for purposes
of the Hybrid Mismatch Rules, as defined below (a “Non-Resident Holder”). Special rules which apply to non-resident insurers
carrying on business in Canada and elsewhere are not discussed in this summary.
This summary assumes that no amount paid or payable to a holder described
herein will be the deduction component of a “hybrid mismatch arrangement” under which the payment arises within the meaning
of the rules in the Canadian Tax Act with respect to “hybrid mismatch arrangements” (the “Hybrid Mismatch Rules”).
Investors should note that the Hybrid Mismatch Rules are highly complex and there remains significant uncertainty as to their interpretation
and application.
This summary is supplemental to and should be read together with the
description of material Canadian federal income tax considerations relevant to a Non-Resident Holder owning notes under “Material
Income Tax Consequences—Canadian Taxation” in the accompanying prospectus and a Non-Resident Holder should carefully read
that description as well.
This summary is of a general nature only and is not intended to be,
nor should it be construed to be, legal or tax advice to any particular Non-Resident Holder. Non-Resident Holders are advised to consult
with their own tax advisors with respect to their particular circumstances.
Based on Canadian tax counsel’s understanding of the Canada Revenue
Agency’s administrative policies, and having regard to the terms of the notes, interest payable on the notes should not be considered
to be “participating debt interest” as defined in the Canadian Tax Act and accordingly, a Non-Resident Holder should not be
subject to Canadian non-resident withholding tax in respect of amounts paid or credited or deemed to have been paid or credited by CIBC
on a note as, on account of or in lieu of payment of, or in satisfaction of, interest.
Non-Resident Holders should consult their own advisors regarding the
consequences to them of a disposition of the notes to a person with whom they are not dealing at arm’s length for purposes of the
Canadian Tax Act.
Autocallable Strategic Accelerated Redemption Securities® | TS-13 |
Autocallable
Strategic Accelerated Redemption Securities®
Linked to the Russell 2000®
Index, due December , 2027 |
|
Summary of U.S. Federal Income Tax Consequences
The following discussion is a brief summary of the material U.S. federal
income tax considerations relating to an investment in the notes. The following summary is not complete and is both qualified and supplemented
by, or in some cases supplements, the discussion entitled “U.S. Federal Income Tax Summary” in product supplement EQUITY STR-1,
which you should carefully review prior to investing in the notes.
The U.S. federal income tax considerations of your investment in the
notes are uncertain. No statutory, judicial or administrative authority directly discusses how the notes should be treated for U.S. federal
income tax purposes. In the opinion of our tax counsel, Mayer Brown LLP, it would generally be reasonable to treat the notes as prepaid
cash-settled derivative contracts. Pursuant to the terms of the notes, you agree to treat the notes in this manner for all U.S. federal
income tax purposes. If this treatment is respected, you should generally recognize capital gain or loss upon the sale, exchange, redemption
or payment on maturity in an amount equal to the difference between the amount you receive at such time and the amount that you paid for
your notes. Such gain or loss should generally be long-term capital gain or loss if you have held your notes for more than one year. Non-U.S.
holders should consult the section entitled “U.S. Federal Income Tax Summary—Non-U.S. Holders” in product supplement
EQUITY STR-1.
The expected characterization of the notes is not binding on the U.S.
Internal Revenue Service (the “IRS”) or the courts. Thus, it is possible that the IRS would seek to characterize your notes
in a manner that results in tax consequences to you that are different from those described above or in the accompanying product supplement.
Such alternate treatments could include a requirement that a holder accrue ordinary income over the life of the notes or treat all gain
or loss at maturity as ordinary gain or loss. For a more detailed discussion of certain alternative characterizations with respect to
your notes and certain other considerations with respect to your investment in the notes, you should consider the discussion set forth
in “U.S. Federal Income Tax Summary” of the product supplement. We are not responsible for any adverse consequences that you
may experience as a result of any alternative characterization of the notes for U.S. federal income tax or other tax purposes.
With respect to the discussion
in the product supplement regarding “dividend equivalent” payments, the IRS has issued a notice that provides that withholding
on dividend equivalent payments will not apply to specified ELIs that are not delta-one instruments and that are issued before January 1,
2027.
You should consult your tax advisor as to the tax consequences of
such characterization and any possible alternative characterizations of the notes for U.S. federal income tax purposes. You should also
consult your tax advisor concerning the U.S. federal income tax and other tax consequences of your investment in the notes in your particular
circumstances, including the application of state, local or other tax laws and the possible effects of changes in federal or other tax
laws.
Where You Can Find More Information
We have filed a registration statement (including a product supplement,
a prospectus supplement, and a prospectus) with the SEC for the offering to which this term sheet relates. Before you invest, you should
read the Note Prospectus, including this term sheet, and the other documents that we have filed with the SEC, for more complete information
about us and this offering. You may get these documents without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively,
we, any agent, or any dealer participating in this offering will arrange to send you these documents if you so request by calling MLPF&S
or BofAS toll-free at 1-800-294-1322.
“Strategic Accelerated Redemption Securities®”
is registered service mark of Bank of America Corporation, the parent company of MLPF&S and BofAS.
Autocallable Strategic Accelerated Redemption Securities® | TS-14 |
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