DBRS Confirms SOUND Trust Senior Short-Term Notes, Series 1998-1 at R-1 (high) (sf)

As part of its annual review of publicly rated asset-backed commercial paper (ABCP) conduits, DBRS has today confirmed the rating of the Senior Short-Term Notes, Series 1998-1 (the Notes) issued by SOUND Trust (the Trust) at R-1 (high) (sf). The confirmation is part of DBRS’s continued effort to provide timely credit rating opinions and increased transparency to market participants.

The Trust is a multi-seller, multi-asset securitization conduit administered by Canadian Imperial Bank of Commerce (CIBC). The Trust engages in only traditional asset transactions. Assets and/or interests acquired by the Trust from sellers (the Assets) are subject to eligibility criteria and/or confirmation from DBRS. As of June 30, 2012, the Assets consisted of credit card receivables (32.2%), auto fleet (25.7%), franchise loans (23.7%), equipment loans and leases (18.4%) and trade receivables (0.0%).

The rating confirmation is based on the following considerations:

(1) Credit enhancement levels are consistent with similarly rated programs in Canada. From inception, every transaction funded by the Notes has been independently structured to meet a AAA standard.

(2) The liquidity facilities meet DBRS’s Global Liquidity Standard (GLS) and are available to assist the Trust in repaying the Notes if the Trust is not able to issue new Notes to do so. The commitment amount equals at least the face value (including interest) of all outstanding Notes.

(3) Minimum credit ratings of AA (low) or R-1 (middle) or their equivalent for liquidity providers and credit enhancers and A (high) or R-1 (middle) or their equivalent for hedge counterparties are required unless otherwise approved by DBRS.

(4) The Assets, through Securitization Agreements, are structured to be bankruptcy remote from the sellers and the bankruptcy remoteness is supported by legal opinions.

(5) All transactions are reviewed by DBRS prior to initial funding by the Trust.

(6) The performance of the underlying collateral is strong.

(7) CIBC has significant experience in structuring, administering and managing multi-asset, multi-seller securitization programs.

The Trust is one of three asset-backed commercial paper conduits administered by CIBC.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodologies are Rating Canadian ABCP, Canadian Structured Finance Surveillance and Legal Criteria for Canadian Structured Finance, which are available on our website under Methodologies.