Canadian Imperial Bank launches STARS offering with 7.5%–42.5% call premiums

Rhea-AI Filing Summary

CIBC is marketing Autocallable Strategic Accelerated Redemption Securities (STARS) linked to the Russell 2000 Index. The structured notes are offered at $10 per unit, carry a maximum term of approximately five years, and are automatically redeemed early if, on any Observation Date, the index closes at or above its initial level (the “Call Level”). There are five potential Observation Dates scheduled roughly one, two, three, four and five years after pricing.

Call premiums escalate over time:

• $10.75–$10.85 if called after year 1
• $11.50–$11.70 after year 2
• $12.25–$12.55 after year 3
• $13.00–$13.40 after year 4
• $13.75–$14.25 at the final Observation Date

Downside profile at maturity: If not previously called and the index declines ≤15 %, investors receive full principal. If the decline exceeds 15 %, losses match the index on a 1-for-1 basis, exposing up to 85 % of capital.

Key considerations: • No interim interest payments • Return is capped at the applicable call premium • Credit exposure to CIBC • The initial estimated value will be below the public offer price • Secondary market values may be lower than purchase price • Investors forgo dividends of the index constituents • Small-cap volatility risk inherent in the Russell 2000.

The notes are not listed on any exchange; detailed terms, risks and tax treatment are in the linked Preliminary Offering Documents filed under CIBC’s FWP (SEC Reg. No. 333-272447).

Positive

• Escalating call premiums of 7.5%–42.5% provide potential fixed upside if index performance meets thresholds.
• 15% downside buffer protects full principal unless the Russell 2000 falls more than that at maturity.
• Issuer funding benefit: CIBC raises capital at terms favorable to the bank without diluting equity.

Negative

• Capital at risk up to 85% if the index declines beyond 15% and note is not called.
• Upside capped at the call premium; investors forgo gains above ~42.5%.
• No interim income; investors receive neither coupons nor index dividends.
• Credit risk — payments depend on CIBC’s solvency; investors are unsecured creditors.
• Liquidity and valuation risk: secondary market values may be below purchase price and initial estimated value.
• Initial estimated value below offer price indicates an implicit fee/discount to investors.

Insights

Structured-Products Analyst

TL;DR – A routine structured note with capped upside, moderate credit risk, and significant principal risk below a 15% buffer.

For yield-seeking investors, the escalating call premiums of 7.5%–42.5% over up to five years are the primary attraction. However, those payouts are only realized if the Russell 2000 closes at or above its starting level on an Observation Date; historical volatility of small-caps makes certainty low. The downside is stark: a >15% index drop translates into equivalent capital loss, potentially wiping out 85% of principal. Because the notes are unsecured, investors also assume CIBC credit risk — a BBB+ rated issuer, but still subject to spread widening. Lack of liquidity and an initial value below offer price mean investors may face mark-to-market losses even if fundamentals remain unchanged. Overall, a niche income product rather than a material driver of CM’s valuation.

Risk Analyst

TL;DR – Product’s risk/return skews toward issuer; investors face market, credit, and liquidity risks with limited upside.

The structure embeds a 15% downside buffer but no upside beyond 42.5% over five years, effectively transferring tail risk from CIBC to retail buyers. The note lacks dividends, amplifying carry cost versus an ETF. Secondary market uncertainty and an offer price above internal value suggest negative carry from day one. Credit-linked nature adds correlation risk: a market sell-off hitting small-caps could coincide with credit spread widening, compounding losses. From a firm-wide view, issuance diversifies CIBC funding at attractive spreads, but impact on CM shareholders is immaterial.

 

Filed Pursuant to Rule 433

Registration Statement No. 333-272447

 

AUTOCALLABLE STRATEGIC ACCELERATED REDEMPTION SECURITIES^® (STARS^®)

 

Autocallable Strategic Accelerated Redemption Securities® Linked to the Russell 2000® Index
Issuer	Canadian Imperial Bank of Commerce (“CIBC”)
Principal Amount	$10.00 per unit
Term	Approximately 5 years, if not called on the first four Observation Dates
Market Measure	The Russell 2000® Index (Bloomberg symbol: "RTY")
Automatic Call	Automatic call if the Observation Level of the Market Measure on any of the Observation Dates is equal to or greater than the Call Level
Observation Level	The closing level of the Market Measure on any Observation Date
Observation Dates	Approximately one, two, three, four and five years after the pricing date
Call Level	100% of the Starting Value
Call Amounts (per Unit)	[$10.75 to $10.85] if called on the first Observation Date, [$11.50 to $11.70] if called on the second Observation Date, [$12.25 to $12.55] if called on the third Observation Date, [$13.00 to $13.40] if called on the fourth Observation Date, and [$13.75 to $14.25] if called on the final Observation Date, each to be determined on the pricing date
Payout Profile at Maturity	·         If not called but the Market Measure does not decline by more than 15.00%, a return of principal ·         If not called, 1-to-1 downside exposure to decreases in the Market Measure beyond a 15% decline, with up to 85% of the principal amount at risk
Threshold Value	85% of the Starting Value
Investment Considerations	This investment is designed for investors who anticipate that the Observation Level on at least one of the Observation Dates will be equal to or greater than the Call Level and, in that case, accept an early exit from the investment, and are willing to accept that their return on their investment will be capped at the applicable Call Premium, take downside risk below a threshold and forgo interim interest payments.
Preliminary Offering Documents	https://www.sec.gov/Archives/edgar/data/1045520/000110465925063588/tm2516701d36_fwp.htm
Exchange Listing	No
You should read the relevant Preliminary Offering Documents before you invest. Click on the Preliminary Offering Documents hyperlink above or call your Financial Advisor for a hard copy.   Risk Factors   Please see the Preliminary Offering Documents for a description of certain risks related to this investment, including, but not limited to, the following:   · If the notes are not called, depending on the performance of the Market Measure as measured shortly before the maturity date, you may lose up to 85% of the principal amount. · Your investment return is limited to the return represented by the applicable Call Premium. · Payments on the notes, including any repayment of principal, are subject to the credit risk of CIBC, and actual or perceived changes in the creditworthiness of CIBC are expected to affect the value of the notes. If CIBC becomes insolvent or is unable to pay its obligations, you may lose your entire investment. · The initial estimated value of the notes on the pricing date will be less than their public offering price. · If you attempt to sell the notes prior to maturity, their market value may be lower than both the public offering price and the initial estimated value of the notes on the pricing date. · As a noteholder, you will have no rights of a holder of the securities represented by the Market Measure, and you will not be entitled to receive securities, dividends or other distributions by the issuers of those securities. ·        The notes are subject to risks associated with small-size capitalization companies.   Final terms will be set on the pricing date within the given range for the specified Market-Linked Investment. Please see the Preliminary Offering Documents for complete product disclosure, including related risks and tax disclosure.

 

Canadian Imperial Bank of Commerce (CIBC) has filed a registration statement (including a product supplement, a prospectus supplement, and a prospectus) with the U.S. Securities and Exchange Commission (SEC) for the offering to which this document relates. Before you invest, you should carefully read these documents and other documents that CIBC has filed with the SEC for more complete information about CIBC and this offering. You may get these documents without cost by visiting EDGAR on the SEC Website at www.sec.gov. CIBC's Central Index Key, or ClK, on the SEC website is 1045520. Alternatively, MLPF&S or BofAS will arrange to send you these documents if you so request by calling toll-free at 1-800-294-1322.

 

 

 

FAQ

What is the maximum return on CIBC's STARS linked to the Russell 2000?

If called at the final Observation Date, investors receive $13.75–$14.25 per $10 unit, a gain of roughly 37.5%–42.5%.

When can the Autocallable STARS be redeemed early?

Early redemption occurs if the Russell 2000 closes at or above its starting level on any of the five Observation Dates (years 1-5).

How much downside protection do investors have?

Principal is protected only if the index decline is 15% or less at maturity; losses beyond that are 1-for-1 up to 85%.

Are the notes listed on an exchange?

No. The notes have no exchange listing; liquidity depends on the issuer’s or dealers’ ability to make a secondary market.

Does the product pay periodic interest or dividends?

No. No interim coupons or dividends are paid; return is realized only upon call or maturity.

What credit risk do purchasers assume?

Payments rely on CIBC’s ability to meet its obligations. Insolvency could result in total loss of investment.