CIBC’s bond paves the way for socially responsible debt

Bank aims to support lending to firms that are promoting women to executive jobs

Canadian Imperial Bank of Commerce broke ground with that nation’s first bond sale that will advance gender diversity in the corporate world. The bank on Wednesday sold $1 billion of three-year deposit notes, which will support lending to companies that are committed to promoting women to executive positions.

“The framework we have created could work for any issuer, any bank, and by no means will we keep that quiet,” Susan Rimmer, a managing director and head of global corporate banking for CIBC Capital Markets, said in an interview.

Bond issuers in Canada have become prominent in financing socially or environmentally friendly causes since 2016.

The city of Vancouver is the latest entrant to the market, selling $85 million of green bonds this week. Canada Pension Plan Investment Board in June become the world’s first pension fund to sell a green bond.

“We expect more large Canadian institutions will develop ESG-friendly bond frameworks to offer alongside traditional bonds,” Kris Somers, a credit analyst at BMO Capital Markets, wrote in a note, in reference to investments that comply with environmental, social and governance criteria. “Recognition of such programs also telegraphs that a company is serious about these issues.”

CIBC’s bonds will support the bank’s corporate lending to companies where women make up at least 30 per cent of top executives or board members, or who are signatories of the Catalyst Accord 2022, a movement that aims to advance women in business.

The notes attracted 79 buyers, which is a number “towards the higher end of the range” in a typical sale of deposit notes by CIBC, according to Amber Choudhry, a managing director for debt capital markets at the bank.