Magazine article American Banker

Canadian Imperial Enters Swaps, High-Yield Debt, and Loan Trading in U.S

Magazine article American Banker

Canadian Imperial Enters Swaps, High-Yield Debt, and Loan Trading in U.S

Article excerpt

Barely a year after shifting its focus from commercial banking to investment, Canadian Imperial Bank of Commerce is moving into trading bank loans and derivatives and underwriting high-yield debt in the United States.

John Hunkin, president of CIBC Wood Gundy, the bank's capital markets, underwriting, and trading arm, said the U.S. expansion is part of a drive to help mostly Canadian corporations find funding in the United States, and to help them manage their interest rate and currency risks.

"Corporations have greater opportunities (to fund themselves) globally, but they also face greater risks," Mr. Hunkin said.

The bank is also planning to increase the size of its U.S. securitizations. The Toronto-based bank already runs the third- largest asset securitization program for commercial paper, after Citicorp and First National Bank of Chicago, through the $5.7 billion Asset Securitization Cooperative Corp.

The bank, Canada's second largest, with more than $110 billion of assets, has hired over 100 derivatives specialists, including six on Thursday, and is planning to hire more.

Last month, it acquired the Argosy Group, a New York investment bank that specializes in underwriting high-yield debt.

Mr. Hunkin said CIBC hoped to boost the amount of high- yield debt Argosy underwrites to $1 billion, from the $500 million it posted in 1994.

The bank is especially interested in finding customers that are in the universe of below-investment-grade companies with sales of $50 million or more. …

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