CIBC today announced that it entered into an agreement with a group of underwriters led by CIBC World Markets Inc. for an issue of 12 million non-cumulative Class A preferred shares Series 24 priced at $25 per share, to raise gross proceeds of $300 million.

Subject to agreement between CIBC and its underwriters, CIBC may issue up to 4 million additional Series 24 preferred shares before closing under the same terms.

The preferred shares will yield 6% annually and are redeemable by CIBC, subject to regulatory approval, at a declining premium after approximately five years for cash or in exchange for common shares at 95% of the then market price of the common shares.

The expected closing date for the issue is December 20. The net proceeds of this transaction will be added to the general funds of CIBC and will increase CIBC’s Tier 1 capital.