CIBC confirms agreements with Aimia and TD Bank Group

TORONTO, Sept. 16, 2013 /CNW/ - CIBC (TSX: CM) (NYSE: CM) announced today it 
has reached tri-party agreements with Aimia and TD Bank Group. 
Under the terms of the 10-year agreement with Aimia, CIBC will continue to be 
an issuer of Aeroplan related travel credit cards. This agreement ensures that 
CIBC Aerogold VISA clients will continue to earn Aeroplan miles as usual and 
will benefit from the enhanced Aeroplan program starting January 2014. 
CIBC will sell approximately 50 per cent of its existing Aerogold VISA 
portfolio to TD, consisting primarily of credit card only customers. 
Consistent with its strategy to invest in and deepen client relationships, 
CIBC will retain the Aerogold VISA credit card accounts held by clients with 
broader banking relationships at CIBC. 
Key Financial Terms 
The portfolio being divested by CIBC consists of approximately $3 billion of 
credit card receivables. Upon closing, CIBC will receive a cash payment from 
TD that will be equal to the approximately $3 billion in credit card 
receivables outstanding being acquired by TD. 
CIBC will also receive upon closing, in aggregate $200 million in upfront 
payments from TD and Aimia as well as annual payments from TD of approximately 
$37.5 million per year in each of the 3 years after closing. 
In addition to these amounts, CIBC will release approximately $65 million of 
loan loss provisions related to the sold portfolio, and incur approximately 
$55 million in costs, $25 million on closing and $30 million over the next 
four quarters. The net income of the upfront payments, loan loss release and 
closing costs is expected to be approximately $180 million. 
CIBC will also free up approximately $280 million of regulatory capital 
related to the reduction of credit card receivables. 
Based on current levels of profitability, the annual earnings impact of the 
agreements being announced today is a reduction of approximately $0.45 per 
share on an ongoing basis. 
Separate from the tri-party agreements announced today, CIBC will also 
continue with its plans to introduce an enhanced proprietary travel loyalty 
rewards card. As previously disclosed, CIBC will spend approximately $50 
million related to this launch, of which approximately $30 million will be in 
fiscal 2013 and the remainder will be spent in 2014. 
Key Agreement Terms 
Under the terms of this agreement: 

    --  CIBC will continue to have rights to market the Aeroplan
        program and originate new Aerogold cardholders through its CIBC
        branded channels.
    --  The parties have agreed to certain provisions to compensate for
        the risk of cardholder migration from one party to another.
        There is potential for payments of up to $400 million by
        TD/Aimia or CIBC for migration of Aeroplan credit card
    --  The CIBC and Aimia agreement includes an option for either
        party to terminate the agreement after the third year and
        penalty payments due from CIBC to Aimia if holders of Aeroplan
        credit cards from CIBC's retained portfolio switch to other
        CIBC credit cards above certain thresholds.
    --  CIBC will work with TD under an interim servicing agreement to
        effect a smooth transition of the customers moving to TD.

Legal and Closing Conditions
    --  The closing, which is expected to occur in December 2013, is
        subject to customary closing conditions, including receipt of
        necessary regulatory approvals.
    --  In conjunction with the agreement being announced today, CIBC
        has also agreed that, upon closing of the transactions
        contemplated by the purchase agreement, CIBC will fully release
        Aimia and TD from any potential claims in connection with TD
        becoming Aeroplan's primary financial credit card partner.

Investor Teleconference
    --  CIBC will host an analyst and investor conference call at 8:45
        am ET today to discuss this matter. The conference call will be
        available in English (416-340-2217 in Toronto, or toll-free
        1-866-696-5910, passcode 4503914#) and French (514-861-2255, or
        toll-free 1-877-405-9213, passcode 9368461#).  Participants are
        asked to dial in 10 minutes before the call.  Immediately
        following the prepared comments, CIBC executives will be
        available to answer questions.

forward-looking statements within the meaning of securities laws in Canada and 
the United States. These statements include, but are not limited to, 
statements about closing conditions, requirement for regulatory approval, our 
operations, cards business, financial condition, annual earnings impact, risk 
management, ongoing objectives, strategies and outlook. Forward-looking 
statements are subject to inherent risks and uncertainties that may be general 
or specific. A variety of factors, many of which are beyond our control, could 
cause actual results to differ materially from the expectations expressed in 
any of our forward-looking statements including, higher than anticipated costs 
to launch an enhanced proprietary travel card; lower than anticipated 
[interchange rates and] card usage; industry competition; [changes in network 
rules]; credit and market risks; changes in market rates and prices; and our 
ability to anticipate and manage the risks associated with these factors. We 
do not undertake to update any forward-looking statement except as required by 

About CIBC
CIBC is a leading North American financial institution with more than 11 
million personal banking and business clients. CIBC offers a full range of 
products and services through its comprehensive electronic banking network, 
branches and offices across Canada, and has offices in the United States and 
around the world. You can find other news releases and information about CIBC 
in our Media Centre on our corporate website at

Kevin Dove, Head of External Communications at 
Image with caption: "Ed Clark, Group President and CEO, TD Bank Group; Rupert 
Duchesne, Group Chief Executive, Aimia; and Gerry McCaughey, President and 
CEO, CIBC; announce the confirmed agreements between TD, Aimia and CIBC 
regarding Aeroplan-branded Visa credit cards. (CNW Group/CIBC)". Image 
available at: 
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CO: CIBC - Investor Relations
ST: Ontario
-0- Sep/16/2013 10:32 GMT
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