DBRS Rates CIBC Convertible Preferred Shares with OSFI NVCC Declaration Trigger Pfd-2

DBRS has today downgraded three convertible Non-Cumulative Class A Preferred Shares, Series 26, 27 and 29 of Canadian Imperial Bank of Commerce (CIBC) to Pfd-2 from Pfd-1 (low). The Under Review with Negative Implications status has been removed and the trends are Stable. This action follows the release earlier today of the updated “DBRS Criteria: Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities.”

DBRS had placed the Series 26, 27 and 29 preferred shares, which at the time were convertible to common equity at the issuer’s option, Under Review with Negative Implications on August 17, 2011. Subsequently, CIBC irrevocably passed control of the trigger to the Office of the Superintendent of Financial Institutions (OSFI) to be used only for a non-viability event under OSFI’s capital guidelines. As a result, OSFI confirmed the three series as non-viability contingent capital (NVCC) qualifying instruments.

Under the updated criteria, DBRS has determined that the OSFI NVCC trigger represents a very remote conversion probability and consequently DBRS has rated these instruments Pfd-2, which is the equivalent of four notches below CIBC’s intrinsic assessment of AA (low).

This action does not reflect any change in DBRS’s view of CIBC’s credit profile and is not related to any issuer-specific credit events.

Other rating actions taken today as a result of the criteria update are being published separately.

Notes:
The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The principal methodology applicable is DBRS Criteria: Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities.

DBRS criteria and methodologies are publicly available on its website www.dbrs.com under Methodologies.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

DBRS's rating definitions and the terms of use of such ratings are available at www.dbrs.com.

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