Canadian Bank's IDRs Placed on Watch

The long- and short-term Issuer Default Ratings of Canadian Imperial Bank of Commerce have been placed on Rating Watch Negative by Fitch Ratings, which cited the bank's exposure to subprime residential mortgage-backed securities.The bank's IDRs stand at AA-minus/F1-plus. (Certain other ratings of CIBC and Canadian Imperial Holdings Inc. were also placed on Rating Watch Negative.) CIBC has "significant exposure" to U.S. collateral debt obligations composed largely of subprime RMBS, and its portfolio has been hedged with credit default swaps, Fitch reported. A "significant portion" of the swap protection, $3.5 billion, was written by a now-weak financial guarantor, and the bank will "most likely take a significant charge" against the exposure, Fitch said.