Commerce Split Corp.: Portfolio Update

TORONTO, ONTARIO–(EMWNews – July 14, 2008) – Commerce Split Corp. (“Commerce Split”) was created to provide exposure to the common shares of Canadian Imperial Bank of Commerce (CIBC) through two classes of securities, the Priority Equity Shares and the Class A Shares (a “Unit”). As stated in the prospectus, holders of the Priority Equity Shares are to be provided with a stable yield and downside protection on the return of their initial investment. Class A Shares are to be provided with leveraged exposure to CIBC common shares including both increases and decreases in the value of the common shares of the Bank and the benefit of any increases in the dividends paid by the Bank on its common shares.

Since the inception of Commerce Split on February 16, 2007 the price of CIBC has declined 49% to $52.21 from $102.15 as of July 11, 2008. This sharp decline in CIBC has resulted in the fund’s net asset value being reduced significantly and as mentioned in previous updates, has required the Company to implement the Priority Equity Portfolio Protection Plan in accordance with the prospectus. The Plan is designed to provide Priority Equity Share coverage ratio of 125%, based on the par value of the Priority Equity Share less cash and notional value of permitted repayment securities held. Since the June 13, 2008, the share price of CIBC has declined by approximately 18% and has required Commerce Split to sell additional shares of CIBC in order to raise cash levels to add to the Priority Equity Protection Plan. The proceeds from these sales are being used to purchase additional permitted repayment securities in order to maintain coverage levels as noted above. After giving effect to these additional purchases of repayment securities, it is estimated that the portfolio will have the equivalent of approximately $5.62 in cash and notional value (value at maturity) of permitted repayment securities per unit. As at July 11, 2008, the Company’s investment portfolio has approximately $5.49 in CIBC exposure per Unit.

The Company’s portfolio is continually rebalanced and adjusted based on market conditions to provide both security for Priority Equity shareholders and upside potential for Class A shareholders. The Company may buy or sell additional shares of CIBC, the permitted repayment securities, and or option positions based on market conditions and provided that the Company remains in compliance with the Priority Equity Protection Plan.