TEXT-S&P Affirms 'A+/A-1' Rtgs On Canadian Imperial Bank of Commerce

Thu Dec 13, 2012 7:57pm EST
 
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Overview

-- We believe that the Canadian banking sector is encountering incremental pressure from headwinds facing the Canadian economy, which is heightening economic risk in the banking system.

-- We also believe that industry risk for the Canadian banking sector is increasing. We expect that intensifying competition for loans and deposits will lead to pressure on profitability growth, especially in banks' retail businesses.

-- We are affirming our 'A+/A-1' long- and short-term issuer credit ratings on CIBC, as well as the 'A+' issue rating on CIBC's senior unsecured debt. We are lowering our issue rating on CIBC's nondeferrable subordinated debt to 'BBB+' from 'A-', and our rating on its preferred shares and hybrids to 'BBB' from 'BBB+'.

-- The stable outlook reflects our expectation that the bank's credit fundamentals will remain consistent with its current ratings over the next 24 months.

Rating Action

On Dec. 13, 2012, Standard & Poor's Ratings Services affirmed its 'A+/A-1' long- and short-term issuer credit ratings on Canadian Imperial Bank of Commerce and its 'A+' issue rating on CIBC's senior unsecured debt. In addition, we lowered our issue rating on CIBC's nondeferrable subordinated debt to 'BBB+' from 'A-', and our rating on its preferred shares and hybrid securities to 'BBB' from 'BBB+'. The outlook is stable.

Rationale   Continued...