Canadian Imperial Bank of Commerce recently brought $250 million of high-yield bonds to market for Outdoor Systems Inc.
The lead role on the bonds is one of many the banking company's securities unit, CIBC Wood Gundy, has played for the nation's largest billboard company, and it highlights the bank's efforts to offer a soup-to- nuts array of corporate finance products.
CIBC has targeted the outdoor advertising industry, as well as media and telecommunications and aviation and aerospace, for its one-stop-shopping approach to the corporate market.
"When the opportunity exists, it will be the major thrust of our business to provide an integrated package throughout the balance sheet," said Andrew Heyer, co-head of the high-yield group.
The deal for the bank's one-year-old junk bond franchise was well received in the marketplace. CIBC increased the bond offering, which was rated B1 and B, from the $150 million initially planned for the Phoenix billboard company.
Unlike many banks, CIBC entered the U.S. high-yield market through an acquisition. It bought the Argosy Group, a junk bond boutique, last year.
CIBC became an integral relationship bank for Outdoor Systems last spring when it financed the company's $710 million acquisition of Gannett Co.'s outdoor division. The acquisition made Outdoor Systems the largest in billboards.
The Canadian bank advised Outdoor on the acquisition and co-managed a related equity offering with Alex. Brown & Sons. Its commercial banking unit made a $240 million bridge loan.
The relationship began four years ago, when CIBC led a bond offering, according to a spokesman for the company.
The latest deal is emblematic of the strength of tapping current clients for new business, said Andrew Gilligan, a bank bond analyst at Bear, Stearns & Co. "If they can offer underwriting to their existing relationships with U.S. companies, that would make sense."
Bill M. Beverage, chief financial officer of Outdoor Systems, agreed with that point. "CIBC understands the whole process," he said, which let it bring the deal to market quickly.
Mr. Beverage added that Outdoor Systems plans to use CIBC again.
This is just one of CIBC's forays into the outdoor advertising industry. It sole-managed a high-yield transaction for Adams Outdoor and has been an adviser to Boston Outdoor, Peterson Outdoor, and Universal Outdoor.
