CIBC Wood Gundy Securities Corp., the U.S. investment banking and trading subsidiary of the Canadian Imperial Bank of Commerce, is expanding its high-yield group with an acquisition finance unit that will focus on the middle market.
CIBC, like many other banks, is looking to take its products to that market, which Jay Bloom, a co-head of the high-yield group, defines as financings of $20 million to $100 million.
"We believe that there is some more opportunity in that area. It's not as heavily banked," he said.
Mr. Bloom says that the acquisition finance unit was formed to provide "one-stop solutions" for clients, both companies and financial sponsors, interested in middle market acquisitions.
"There are various levels of a capital structure, and they come to us to provide all levels," Mr. Bloom said. "We would be able to provide the one- stop solutions within our department without having the other areas of the institution involved.
"We have a $400 million merchant banking fund that can invest in mezzanine and in private equity, so that's why we're more one-stop than most people."
The unit plans to offer bank debt, high-yield debt, private equity, mezzanine financing, and bridge loans as part of its product line. CIBC recently led a $1.7 billion financing for Outdoor Systems Inc.'s purchase of a billboard company from Minnesota Mining and Manufacturing.
That transaction included the refinancing of $500 million in existing debt, roughly $335 million in subordinate bridge debt, a $300 million issue of preferred stock, and $600 million in new bank debt.
William Phoenix, a CIBC Wood Gundy veteran, is the managing director of the acquisition finance unit. Mr. Phoenix entered the high yield group as a corporate finance banker with a specialty in leveraged finance.
Dayl Pearson, formerly a managing director at IBJ Schroder, has joined as a managing director in CIBC's high yield group to focus on middle market business.
The third new hire in the unit is Martin Friedman, who will serve as a managing director. Mr. Friedman was formerly a managing director in CIBC's media group.
Mr. Bloom said he expects to hire another five to seven people for the unit and is also looking to expand further its parent high-yield group.