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What are Structured Notes?
 

What are CIBC Principal Protected Notes?

CIBC Principal Protected Notes are innovative financial products that combine key investment characteristics of both stocks and bonds. The distinguishing feature of these investments is that the principal amount — your original investment — is 100% protected if the PPNs are held to maturity.

Investors who purchase conventional bonds can expect to receive the principal amount of their investment when the bond matures, along with interim coupon payments over the term of the bond. Similarly, CIBC PPNs will repay the principal amount at maturity, with the potential to receive interest payments periodically or in a lump sum at maturity.

    

 

Unlike conventional bonds, however, not all interest payments made by CIBC Principal Protected Notes are predetermined on the purchase date. Instead, the amount of interest is typically linked to stocks or equity indices, but may also be linked to mutual funds, interest rates, commodities and sometimes even currencies or bonds. If the underlying assets perform well, the interest payments may be significantly higher than the returns available from conventional bonds or Guaranteed Investment Certificates (GICs).

PPNs are available in a wide range of payment structures. Some PPNs are designed for income-oriented investors, while others are focused more on growth. In other words, depending on the PPN you choose and the performance of the underlying assets, you may enjoy income from your investment throughout the PPN’s term or a one-time return when the PPN matures. Some PPNs even guarantee a minimum coupon rate. In all cases, the principal amount is 100% guaranteed if held to maturity, even if no interest may be payable.

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What are CIBC Principal At Risk Notes?

CIBC Principal at Risk Notes are innovative financial products that you may want to consider for the equity portion of your portfolio. Unlike Principal Protected Notes (PPNs), Principal at Risk Notes do not guarantee that your principal amount will be returned at maturity. However, by exposing a portion of the original principal amount, these notes can offer additional return features and access to assets not typically found in traditional investment products.

With Principal at Risk Notes, your returns are linked to the performance of an underlying asset or group of assets. Notes may be structured with the opportunity to earn enhanced returns in a positive market, or positive returns in a declining or range-bound market. The risk is that you may lose some, or all, of the amount you originally invested

Similar to PPNs, investors may benefit from income generated throughout the term of a Principal at Risk Note, or from a one-time payment at maturity based on the growth of the underlying assets. These notes are typically linked to a broad range of one or more asset classes and market sectors, such as stocks, equity indices, mutual funds, interest rates, commodities and bonds, without direct foreign currency risk.

With CIBC Principal at Risk Notes, you have a valuable alternative to traditional equities to help meet your investment goals.


Please refer to the Legal Notice link below for important information regarding Principal at Risk Notes.

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