S&P rates Canadian Imperial Bank notes BBB

Standard & Poor’s said it assigned a BBB rating to Canadian Imperial Bank of Commerce’s proposed C$1 billion tier 2 subordinated debentures.

The issuer credit ratings on the bank are A+/A-1 with a negative outlook.

The rating on this issue reflects the agency’s criteria for hybrid capital instruments and the features of the new issue, S&P said.

The rating also recognizes the A- stand-alone credit profile on the bank, the agency added.

The BBB rating is two notches below the stand-alone credit profile, incorporating a deduction of one notch for subordination based on a belief that the Canadian legal and regulatory framework insulates senior debt from defaults on the subordinated debt, the agency said.

The deduction of an additional notch also considers that the subordinated notes feature a mandatory contingent conversion-trigger provision, S&P said.

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