At first blush, Canada's second-largest bank seems an unlikely home for a group of junk bond pros from Drexel Burnham Lambert.

But two years after Canadian Imperial Bank of Commerce bought the Argosy Group, both parties say the relationship is working just fine.

CIBC Wood Gundy Securities Corp., the bank's U.S. investment bank, has distinguished itself on Wall Street by pursuing what its executives call the "noncommoditized" elements of corporate finance.

Rather than go after the plain-vanilla deals that attract other commercial banks in the securities business, CIBC Wood Gundy's Drexel- trained investment bankers say they prefer to work on more complex transactions.

"There is a premium that is being put on deal structuring intelligence," said Andrew Heyer, one of three co-heads of high-yield business at CIBC Wood Gundy. "Our history in deal structuring naturally attracts the tougher deals, and we've always shined in the noncommodity end of the business."

This year, Canadian Imperial broke into the top 10 underwriters of high- yield bonds-a feat unmatched by any other foreign bank. And its investment banking unit gained visibility with a series of high-profile financings for Outdoor Systems Inc., an acquisitive billboard company.

Other investment banks applaud the achievement. But some question the aggressive approach. The bank is active in bridge lending-the risky practice of making short-term loans that "bridge" a company to a capital markets offering. Such activity bruised banks in the 1980s.

CIBC Wood Gundy has raised its profile quickly, "and that's important," said one high-yield investment banker. "The only caveat is that you want to avoid as many bad relationships and negative impressions as you can, and some are inevitable if you're being aggressive."

So far the unit has made $3.5 billion to $4 billion of bridge commitments, tapping the bank's balance sheet for the funds and then syndicating the commitments. Other banks and securities firms use closed- end bridge loan funds.

Bridge loans figured prominently in Canadian Imperial's recent work for Outdoor.

Last October, CIBC Wood Gundy advised the billboard company on its $710 million acquisition of Gannett Co.'s outdoor division. It supplied Outdoor a $575 million bank credit, a $240 million bridge loan, a $250 million junk bond offering, and a $165 million bridge of preferred stock, which was not drawn down. The preferred-stock bridge was replaced by a $340 million equity issue led by BT Alex. Brown Inc.

This May, when Outdoor bought a unit of Minnesota Mining and Manufacturing Co., CIBC Wood Gundy supplied another $1.7 billion financing package.

The commitment included $1.1 billion of bank debt, a $300 million senior subordinated bridge loan that was refinanced by a $500 million senior subordinated note issue, and a $335 million subordinated stock bridge that was not drawn down. The subordinated stock bridge was refinanced by a $390 million issue of common stock led by Alex. Brown.

"We've made quite a few acquisitions, and they stepped up to the plate each time," said Bill Beverage, chief financial officer of Outdoor. "We move pretty quickly, and they've been able to keep the pace all the way through."

Mr. Heyer and his co-heads, Jay Bloom and Dean Kehler, credit their days at Drexel for instilling in them a "can do" approach to finance. The trio worked at Drexel from 1985 to 1990.

There, Mr. Bloom headed up sell-side mergers and acquisitions; Mr. Heyer led industrial finance; and Mr. Kehler garnered deals for leveraged buyout firms and worked closely with Leon Black, who went on to found Apollo Management LP.

"We try to say" to our clients: "'Let's work backward from the solution,'" Mr. Bloom said. "'Let's figure out how to structure it into what you want.'"

When Drexel fell apart, the three bankers banded together to form Argosy Group, named for the mythical band of Greek heroes who set out to find the Golden Fleece.

Argosy began as an M&A shop, and it nabbed the advisory role for Investcorp's $1.5 billion acquisition of Saks Fifth Avenue within its first month of existence. When junk bonds came back into vogue around 1994, the firm built Argosy Securities and with that began leading private placements and smaller high-yield deals.

A year later, it sold the firm to Canadian Imperial. Now, the New York- based unit is staffed with 130 professionals divided evenly between sales and origination and including 15 managing directors.

Michael Rulle, the head of U.S. investment banking at CIBC Wood Gundy, said the integration of Argosy has exceeded expectations. That's partly because the bank remixed its entire business three years ago and brought the investment bank and corporate bank under one management structure. "We plowed through those kinds of integration issues," he said, "and I think that's helped us to some degree."

Another of the bank's banner assignments was financing the $1.1 billion merger last year of Motor Wheel Corp. and Hayes Wheels International. Buyout firm Joseph, Littlejohn & Levy, owners of Motor Wheel, tapped Canadian Imperial and Merrill Lynch & Co. for a $645 million bank loan and a $250 million junk bond issue.

The Canadian bank's merchant banking fund also made a $40 million equity investment in the transaction. The bank has a $400 million revolving merchant banking fund, which allows CIBC Wood Gundy to make minority equity investments along with LBO firms. The bank constantly replenishes the fund with money from its balance sheet.

"It remains to be seen whether the risk" that CIBC Wood Gundy has taken "will ultimately work out," said one investment banker. "For Outdoor Systems, it was a gutsy call, and they got it done. But having said that, there are some other things that are not working out that may offset some of the gains."

Take CIBC Wood Gundy's $130 million syndicated bridge loan last year to NextWave Telecom, a competitive local exchange carrier. By the time Federal Communications Commission regulations allowed NextWave to go to the capital markets, investors had soured on the sector. CIBC Wood Gundy has $15 million from its merchant banking fund invested in the company.

"It was a fairly risky transaction that had some significant attributes that made the risk worth pursuing," Mr. Bloom said. "We're not sure that we are going to be able to achieve the rates of return that we thought, but it was priced for the risk."

In the future, CIBC Wood Gundy's high-yield triumvirate said, they intend to keep the bank firmly planted among the top 10.

"We're in pretty good company, and we need to continue to do what we're doing," Mr. Kehler said. And though it may seem odd to have such an aggressive U.S. strategy housed within a Canadian bank, Mr. Kehler adds, "our business turned out to fit in ... awfully well."

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