May 28, 2009 / 11:38 AM / in 8 years

UPDATE 1-CIBC to issue shares for dividend reinvestment

* Changes shareholder reinvestment plan

* To issue new shares, rather than buy on open market

TORONTO, May 28 (Reuters) - Canadian Imperial Bank of Commerce (CM.TO) said on Thursday that it would start issuing new shares to investors participating in its dividend reinvestment plan rather than buy them in the open market.

The move, which will dilute the holdings of existing shareholders but also help Canada’s fifth-largest bank raise funds, allows plan participants to purchase common shares from dividend or stock dividend option income at a 3 percent discount to market price.

Previously, shares were purchased on the secondary market with no discount from the average market price.

CIBC said the changes would take effect starting with the dividend payable on July 28 to common and preferred shareholders of record on June 29. (Reporting by Andrea Hopkins; Editing by Lisa Von Ahn)

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