CM Issues Statement on SubprimeThis was a good idea for CIBC. Exposure is "well below" US$2.6 billion (but undefined...is it US$1.5 billion or US$0.3 billion). Most of the subprime debt is AAA (this category has only gone down about 5% and is pretty safe).
This is probably not a big deal, but a charge of, say $50-$75 mm is possible (not a big number). Issue more psychological now. CM has negative momentum (started with earnings growth concern and accelerated by subprime issue) and may trend lower still. Though I think $90 is likely a bottom.
CIBC issues statement on sub-prime exposure
Last Update: 7/10/2007 10:31:38 AM
TORONTO, Jul 10, 2007 (Canada NewsWire via COMTEX) -- CIBC today issued the following statement:
Recent media reports have estimated that CIBC has US$2.6 billion exposure to the US subprime real estate mortgage market.
CIBC has both hedged positions through insurance as well as unhedged positions. CIBC does not disclose individual securities positions but confirms its previous statements to the media that its unhedged exposure to this sector is well below US$2.6 billion.
The majority of the securities held are AAA-rated, the highest rating category.