Are You looking for an above average Annual Return with principal guarantee?
By Eunice Luis
Published in Port Credit Harbour Lights
The current low interest rate environment has made it very challenging for those investors who prefer regular income from their portfolios. In today's environment, finding high-quality investments that offer security of principal and a potential yield greater than 5% is difficult. Now, however, this is possible with Yield Generation Deposit Notes.
What are Yield Generation Deposit Notes?
They are an innovative six-year investment that converts the potentially superior returns of the equity market into yield of a fixed income investment.
What are some of the advantages of Yield Generation Notes?:
- First Year Coupon: The deposit notes pay a guaranteed coupon in the first year equal to 5.0%.
- An Annual Coupon of up to 10.5% in Years Two to Six: Coupon payments after the first year are linked to the price performance of an internationally diversified portfolio of 10 equities. The annual coupon equals the average cumulative return of the equity portfolio, subject to a maximum return per stock of 10.5%.
- Principal Guaranteed: By CIBC at maturity.
- Short Time Horizon of Six Years: In the current interest rate environment, achieving the same potential yield from a conventional bond would require a much longer term and/or a lower credit quality issuer.
- Liquid: Can be sold in a liquid secondary market prior to maturity; there are no lockout periods.
- RRSP Eligible: The deposit notes qualify as Canadian content in an RRSP, and their value is not directly affected by currency fluctuations of the underlying equity portfolio.
These CIBC Series 2 Deposit Notes may be purchased until August 6th, 2004 (Series 3 to follow). If you want to find out more about CIBC's Yield Generation Deposit Notes, please contact Eunice Luis at Portlington Financial Group,905-274-7820 or email Eunice@portlingtonfiancial.com and we will also be able to provide you with the Information Statement that fully discloses the terms.
