DBRS has announced that it has changed the ratings trend on CM from negative to stable. The so-called press release is not available to the public.
DBRS says that the move to a stable trend reflects its view that “actions taken so far by CIBC to reduce its exposures in the structured credit runoff business should help to limit the losses on both earnings and capital.” It says that it expects the bank to continue to proactively reduce its structured credit runoff portfolio exposures.
DBRS adds that the bank has also taken actions to improve risk management, including changing senior management, increasing the depth of its senior risk management team, and revamping the risk management process and procedures. It allows that while it is difficult to assess the effectiveness of these changes, “so far earnings from core businesses remain within our expectations, given weak credit markets in Canada.”
“Nevertheless, any material weaknesses in risk management that affect the consistency or sustainability of earnings will have a negative impact on CIBC’s ratings,” it stresses
CM has a large number of preferred shares issues outstanding: CM.PR.A (OpRet); CM.PR.D, CM.PR.E, CM.PR.G, CM.PR.H, CM.PR.I, CM.PR.J (PerpetualDiscount); CM.PR.K, CM.PR.L, CM.PR.M (FixedReset); CM.PR.P (PerpetualDiscount) and CM.PR.R (OpRet).
The last general news about CM was the post on the preferred DRIP into discounted common. All CM preferred issues are tracked by HIMIPref™.