Business
Canada's CIBC takes 22.5 per cent of Bermuda bank
Friday, March 12, 2010
Canadian Imperial Bank of Commerce has acquired a 22.5 per cent stake in Bermuda's Bank of NT Butterfield & Son Ltd. in a deal that expands its footprint in the Caribbean region.
Under the terms of the deal, CIBC invested US$150 million as part of a US$550 million recapitalization of Butterfield, Bermuda's largest. CIBC named the Carlyle Group as one of several other institutional investors supplying the remaining US$400 million.
CIBC, Canada's fifth-largest bank, said it also supplied Butterfield with a commitment letter for a senior secured credit facility for up to US$500 million.
"As a result of this investment, CIBC owns 22.5 percent of Butterfield's equity in the form of common shares and convertible voting preference shares, and will nominate two of 12 directors on Butterfield's board of directors," CIBC said in a statement.
The acquisition is the latest step by CIBC to promote growth through minority partnerships and investments, both at home and abroad.
Butterfield, more than 150 years old, is the largest independent bank in Bermuda, with assets of US$9.6 billion. The bank offers services in Bermuda, Barbados and the Cayman Islands, including retail and corporate banking and treasury activities.
CIBC last week posted a quarterly profit that more than quadrupled, more than expected, thanks to volume growth in its retail markets and wholesale banking.
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