The Toronto Stock Exchange reports that it has approved the original listing of Canadian depositary receipts (CDRs) issued by Canadian Imperial Bank of Commerce. According to the TSX, Costco CDR (CAD Hedged) will be listed and posted for trading on the TSX at the open on Feb. 5, 2025. There will be 7.25 million CDRs issued and outstanding, and 50,000 CDRs reserved for issuance. The CDRs will trade under the symbol COST, in Canadian dollars and with Cusip No. 22170M 10 9. The designated market-maker is CIBC World Markets Inc., and the transfer agent and registrar is TSX Trust Company at its principal office in Toronto.
The TSX reports that the CDRs are securities that represent a
beneficial ownership interest in a pool of shares of
common stock of Costco Wholesale Corp. The
underlying shares are listed on the Nasdaq Global
Select Market under symbol COST. The CDRs are
designed to provide Canadian investors with a
fractional ownership interest in the underlying shares
in Canadian dollars with a currency hedge. The CDRs have been listed on Cboe Canada since Dec. 1, 2021, under the symbol COST.
Each CDR is equivalent to owning a fractional interest
in the underlying shares. This is represented by the
CDR ratio. The CDR ratio is adjusted on a daily
basis to provide a notional currency hedge. As the ratio
increases or decreases, the number of underlying
shares represented by one CDR increases or
decreases. So, if the Canadian dollar strengthens, the
CDR will represent a larger number of underlying
shares. Conversely, if the Canadian dollar weakens,
the CDR will represent a smaller number of underlying
shares.
For example, if on a given day a CDR holder owns 100
CDRs and the CDR ratio is 0.10 on that day, then the
CDR holder's interest in the pool provides entitlements
that are based on the entitlements that would arise
from beneficially owning 10 of the applicable
underlying shares with a notional hedge into Canadian
dollars of the market value in the applicable foreign
currency in which such underlying shares are listed for
trading on their principal securities exchange or other
trading market. The CDR ratio for each series of
CDRs will be calculated daily and will be available at
the CDR website under the
CDR directory tab.
The TSX notes that CDR investors will be entitled to vote the underlying
shares through CIBC's on-line voting portal. CIBC Mellon Trust Company, as the depositary, will then vote the
underlying shares in accordance with the instructions
provided on a commercially reasonable best-efforts
basis. The number of underlying shares that each
CDR holder can vote will depend on how many CDRs they hold and how many underlying shares each CDR
reflects.
Dividends paid on the underlying shares will be
passed through to CDR investors in Canadian dollars
when received by the depositary. The record date for
determining which CDR holders are entitled to receive
any dividends in respect of CDRs will be the record
date set by the relevant underlying issuer. The
depositary will notify CDR holders of any record
dates via the CDR website under the corporate actions tab.
The deposit agreement sets out the
terms of CDR holders' undivided co-ownership
interests in the pool of underlying shares held for the
relevant series of CDRs. Each CDR represents an equal undivided
direct beneficial interest in the underlying share pool.
CDR holders do not have any ownership interest in any
particular underlying shares or number or fraction
thereof, and CDR holders will not be considered to be
shareholders of the underlying issuer for the purposes
of Canadian or U.S. securities laws.
For more information, see CIBC's short form base shelf prospectus dated
Aug. 15, 2023, as amended by amendment No. 1,
dated May 24, 2024, and amendment No. 2, dated
Jan. 23, 2025, and prospectus supplement No. 1
dated Aug. 15, 2023, which
are available on SEDAR+. Reference should be made to the deposit agreement
dated as of July 16, 2021
(as amended), and amended and restated with effect
as of May 28, 2024, among CIBC and CIBC Mellon, as
the custodian, for the complete attributes of the CDRs.
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