DBRS: CIBC Credit Ratings on Negative Trend

DBRS has announced that it:

has today revised the ratings trend of Canadian Imperial Bank of Commerce (CIBC or the Bank) and related entities to Negative and removed the Bank from Under Review with Negative Implications, where it was placed on December 19, 2007. DBRS is confirming all the ratings of CIBC, including the Bank’s Deposits & Senior Debt at AA and Short-Term Instruments at R-1 (high).

The Negative trend reflects DBRS’s concerns about the effectiveness of the Bank’s risk management processes, especially in the context of managing risk to generate consistent and sustainable performance. Weaknesses surfaced in Q4 2007 and Q1 2008 following charges and losses associated with the deterioration of the U.S. sub-prime mortgage market.

DBRS believes successful execution by the new senior management team to address risk management issues will be instrumental in removing the Negative trend over the next year, as it is currently too early to determine the effectiveness of these actions.

The DBRS credit review was noted on PrefBlog in December.

CIBC has the following preferred share issues outstanding: CM.PR.A CM.PR.D CM.PR.E CM.PR.G CM.PR.H CM.PR.I CM.PR.J CM.PR.P and CM.PR.R

S&P rates the preferreds P-1(low) with no outlook or watch.

Moody’s does not rate the preferreds, but has Senior Unsecured or Equivalent at Aa2. They changed the outlook to Negative on December 7, 2007.

Fitch lists the long term debt as AA- with “Rating Watch On” and “Rating Watch Negative”.

Leave a Reply

You must be logged in to post a comment.