RE:New Press Release - CIBC to Issue NVCC Subordinated DebenturesI would prefer to own the common shares and collect 5.62% (currently) along with capital appreciation and future dividend increases instead of only 5.30% on a debenture. Wonder how many dividend increases and capital appreciation an investor would get between now and Jan 1st, 2034? Likely more than 5.30%. Now if I were approaching 71 years old, I'd consider this for my RRIF account when it is time to transfer from RRSP to RRIF. Cashing in your RRSP and transfer it to max out on your TFSA room if any to collect the yield tax free is another option.
One other thing to consider as a yield investor is Rule-72. Return x Time = Double Your Money.
Debenture: 72 / 5.30% = 13.59 years to double your money.
Dividend: 72 / 5.62% = 12.81 years to double your money.
Capital Appreciation 5% + 5.62%. CA + D = 11.62% which is 6.20 years to double your money. This does not include future dividend increases, better than 5% capital appreciation, or the dividend tax credit.
Rule-72 rules!