CIBC CI M.A.X. Deposit Notes TM Series 9 ROC (Return Of Capital) FundSERV Code: CBL315.
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Transcript of CIBC CI M.A.X. Deposit Notes TM Series 9 ROC (Return Of Capital) FundSERV Code: CBL315.
CIBC CI M.A.X. Deposit NotesTMCIBC CI M.A.X. Deposit NotesTM
Series 9 ROC (Return Of Capital)Series 9 ROC (Return Of Capital)FundSERV Code: CBL315FundSERV Code: CBL315
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The information contained herein is confidential and for advisor use only. The information contained herein is not to be reproduced or distributed to the public or the press.
This presentation is not an offer or a solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended as a summary only and is qualified entirely by, and should be read in conjunction with, the more detailed information appearing in the Information Statement. Details regarding the dynamic allocation strategy, calculation and payment of interest, the notional portfolio, repayment of principal by maturity and certain risk factors are contained in the Information Statement. Any examples in this presentation are included for illustrative purposes only and are not intended to predict actual results, which may differ substantially from those reflected herein.
“CI”, “CI Investments”, and the CI Investments design are registered trademarks of CI Investments Inc. and have been licensed for use by CIBC. “M.A.X. Deposit Notes” is a trademark of CIBC.
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The fundamental demand for Income has not gone away… All of the factors
that drove investors into income trusts are still present today.
Demographics suggest that they’ll be present in even greater force as we go
forward.
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Key Features
MAXimizes Fund Exposure– Provides 125% initial exposure to the CI Global High Dividend Advantage Fund with
the potential for up to 200% exposure. The Fund provides global diversification, monthly distributions in a low volatility portfolio.
MAXimizes Performance– Innovative dynamic asset allocation strategy that seeks to enhance returns when
performance is positive and reduce volatility when performance is negative. New methodology means that distributions are less likely to trigger an allocation out of the Fund, allowing for greater exposure levels to the Fund relative to traditional structures.
MAXimizes Tax-Effective Monthly Distributions– The Deposit Notes distribute tax-efficient partial principal repayments, structured as
Return Of Capital (100% tax-free), equal to 75% of the Fund’s ordinary distributions.
MAXimizes Capital Protection– 100% principal protection provided by CIBC if held to maturity (8 year term).
CIBC CI M.A.X. Deposit NotesTM
Series 9, ROC (Return Of Capital)FundSERV Code: CBL315
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Fund Overview
CI Global High Dividend Advantage Fund
• Objectives: To provide exposure to high-quality global companies with proven ability to grow their earnings and distribute a strong, sustainable stream of cash flow.
• Global Diversification: The Fund offers access to a portfolio of global dividend-paying equities diversified across a number of sectors.
• Monthly Distributions: Fund has a targeted annual distribution that provides investors with a steady stream of cash flow. As of May 31, 2007, the indicative distribution rate was 5.55%.
• Lower Volatility: Portfolio stability is achieved by selecting companies that exhibit superior yield and operating earnings growth.
CIBC CI M.A.X. Deposit NotesTM
Series 9, ROC (Return Of Capital)FundSERV Code: CBL315
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Fund Management
CI Global High Dividend Advantage Fund
• Portfolio Advisor: Managed by Epoch Investment Partners, Inc., which is led by President and Chief Investment Officer William Priest. Epoch currently has over US$ 4 billion under management.
• Global Emphasis: Epoch employs a value style, bottom-up approach focusing on companies that are benefiting from globalization and increasing world trade.
• Experience: The Portfolio Manager of the Fund, William Priest, has more than 35 years of investment industry experience. Prior to founding Epoch, he was Senior Partner and Portfolio Manager at Steinberg Priest & Sloane Capital Management, LLC. Before that he was Chairman and CEO of Credit Suisse Asset Management Americas and CEO and Portfolio Manager of its predecessor firm BEA Associates, which he co-founded in 1972.
Performance as of May 31, 2007 (as a percentage per annum)
YTD 3 Mo 1 Yr Life1
3.37% 1.48% 24.41% 12.78%1 Life since February 28, 2006 Source: CI Investments, as of May 31, 2007
CIBC CI M.A.X. Deposit NotesTM
Series 9, ROC (Return Of Capital)FundSERV Code: CBL315
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Fund Composition
CI Global High Dividend Advantage Fund
RWE AGVerizon Communications AT&T Inc. Citizens Communications Co.Duke EnergyWindstreamEnel Societa Per AzioniKeyspan CorporationAllianceBerstein Holding LPReynolds American Inc.
2.35%2.04%1.98%1.96%1.96%1.96%1.95%1.95%1.93%1.92%
Composition by Asset Class
Composition by Country
Composition by Sector
Top 10 Holdings
Source: CI Investments, as of May 31, 2007
CIBC CI M.A.X. Deposit NotesTM
Series 9, ROC (Return Of Capital)FundSERV Code: CBL315
International Equity40.6%
Canadian Equity2.9%
Cash7.4%
US Equity49.1%
Cash7.4%
Utilities22.6%
Financials14.0%
Energy7.4%
Other14.9%
Consumer Discretionary
9.5%Telecom17.0%
Consumer Staples7.2%
Other21.2%
Italy5.9%
Norway2.5%
Australia5.7%
Canada2.9%France
3.4%
U.S.49.1%
U.K.9.2%
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Dynamic Allocation
How the CI M.A.X. Series 9 Asset Allocation Works
• Assets may be re-balanced from time to time between mutual fund units and bonds – based on a pre-defined set of portfolio allocation rules.
• The Distance between the NAV and the Declining Floor (see image below) determines the Target Exposure to the mutual fund units.
– The Declining Floor’s value (cost of a 0.5% coupon bond) will be reduced as distributions are paid.
– Target Exposure = 5.2 Distance
• As the Distance increases there will be increased exposure to the Fund (using leverage).• As the Distance decreases there will be decreased exposure to the Fund.
$25
$50
$75
$100
$125
$150
$175
2007 2008 2009 2010 2011 2012 2013 2014 2015
Declining Floor(Value of 0.5% per annum coupon bond less the
Partial Principal Repayments)
Distance = NAV - Floor
NAV
Net Asset Value Distance Target Exposure
< 1.5% 0%5% 26.0%
10% 52.0%15% 78.0%20% 104.0%25% 130.0%30% 156.0%35% 182.0%
>38.5% 200.0%
CIBC CI M.A.X. Deposit NotesTM
Series 9, ROC (Return Of Capital)FundSERV Code: CBL315
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Dynamic Allocation
How the Asset Allocation Works Under Different Market Scenarios
• Issue Date: $125 per Deposit Note will allocated to the Fund units – achieved by drawing down on a notional loan.
• Strong Performance: Distance increases resulting in an Allocation Event where additional exposure to the Fund units (up to 200%) has been provided – achieved by drawing down on a notional loan.
• Weak Performance: Distance decreases resulting in an Allocation Event where reduced exposure to the Fund units occurs –Fund units are sold to pay back loan or purchase zero-coupon bonds.Issue Date Strong Performance Weak Performance
Mutual Fund Units
Bonds
$125
$0
Mutual Fund Units
Bonds$0
$150
Mutual Fund Units
Bonds
$50$50
CIBC CI M.A.X. Deposit NotesTM
Series 9, ROC (Return Of Capital)FundSERV Code: CBL315
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Dynamic Allocation
Resetting the Allocation Triggers
• An Allocation Event will only occur when a meaningful change in Distance occurs– Subsequent Allocation Events will only occur with an additional meaningful change in
Distance– Resetting the trigger levels after an Allocation Event avoids the costs of frequent re-
balancingLeveraging Scenario De-Leveraging Scenario
50%
75%
100%
125%
150%
175%
200%
Time
Exp
osu
re
+25%
-25%
+25%
-25%
Allocation Event
25%
50%
75%
100%
125%
150%
175%
Time
Exp
osu
re
+25%
-25%
+25%
-25%
Allocation Event
Actual Exposure Target Exposure Allocation trigger levels
CIBC CI M.A.X. Deposit NotesTM
Series 9, ROC (Return Of Capital)FundSERV Code: CBL315
11
Dynamic Allocation
Benefits of the CI M.A.X. Series 9 Asset Allocation
• Enhanced Return Opportunity: 125% exposure to the Fund at inception with the potential for 200% exposure to the underlying Fund through the use of a notional loan facility.
• 100% Principal Protection: Principal is guaranteed to be fully repaid by maturity.
• Reduced De-Leveraging Probability: The Declining Floor feature means that the value of the Floor will be reduced as distributions are paid. Accordingly, the Distance will no longer be materially affected by distributions from the Note, resulting in greater exposure levels to the Fund relative to notes with the traditional floor structure.
$25
$50
$75
$100
$125
$150
$175
2007 2008 2009 2010 2011 2012 2013 2014 2015
Declining Floor
Net Asset Value
Traditional Floor
Distance using the Declining Floor strategy will exceed the Distance using the Traditional Floor strategy, resulting in greater exposure levels to the Fund.
CIBC CI M.A.X. Deposit NotesTM
Series 9, ROC (Return Of Capital)FundSERV Code: CBL315
12
Potential Investors
• Conservative Investors: – Medium to long-term, risk-sensitive investors interested in gaining market exposure
without risking their capital.– Investors seeking an easy way to achieve global diversification through one easy
investment.
• Income Investors:– Investors hesitant to lock in long-term rates at current levels.– Investors looking for a potential after-tax yield pick-up over current market rates.– Investors seeking attractive yield opportunities as an alternative to income trusts.
• Retirees:– Retired investors who are looking for regular monthly distributions.
• Tax-Sensitive Investors:– Individuals with taxable investment accounts interested in receiving tax efficient
distributions.
CIBC CI M.A.X. Deposit NotesTM
Series 9, ROC (Return Of Capital)FundSERV Code: CBL315
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Summary of Terms
Issuer
Issue Date
Maturity Date
• Canadian Imperial Bank of Commerce
• August 29, 2007
• August 31, 2015 (Term to maturity: 8 years)
Issue Size • Subscription Price: $100 per Deposit Note• Minimum Purchase: $5,000 (50 Deposit Notes)
Structural Features
• Dynamic Allocation Strategy (CPPI Structure) with innovative Declining Floor• Underlying Fund: CI Global High Dividend Advantage Fund• 125% exposure at inception – Potential for 200% exposure to the Fund• 100% principal protection by maturity• Non-Taxable monthly partial principal repayments equal to 75% of the ordinary distributions of the Fund
Fees & Expenses
• Portfolio Fee: 2.55% of Fund Account Value; 0.50% of Bond Account Value• Loan Facility: Interest charged at BA’s, plus 25 bps per annum• All fees and expenses calculated daily and payable monthly in arrears from assets in the Portfolio
RRSP Eligibility
• 100% eligible for RRSPs, RRIFs, RESPs, DPSPs and LIRAs• CIBC offers client-name purchases for RRSP accounts only (no fees). All other registered plan purchases must be placed through a dealer or intermediary sponsor plan.
Issue Size• CIBC World Markets Inc. will maintain a secondary market for Deposit Notes (subject to availability)• Early trading charge may apply on dispositions prior to maturity
Selling Period: July 9th to August 24th
CIBC CI M.A.X. Deposit NotesTM
Series 9, ROC (Return Of Capital)FundSERV Code: CBL315
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Advisor Information
FundSERV Code
Selling Period
Selling Commission
• CBL315
• July 9th to August 24th, 2007
• 5.00% up front plus 0.25% p.a. trailer on Fund Account Value
Conference Call
• Tuesday, July 17th at 11:00 AM (ET)• Pass Code: 3227485
Toll-Free: Local:
(866) 540-8136(416) 340-8010
Replay:
(800) 408-3053(416) 695-5800
Marketing Material
• Information Statement• Greensheet (Advisor use only)• One Page Summary (Investor-Friendly)• FAQ• Presentation
CIBC CI M.A.X. Deposit NotesTM
Series 9, ROC (Return Of Capital)FundSERV Code: CBL315
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Thank You
For more information please visit our website:
www.ci.com/depositnotes