Canadian Imperial Bank of Commerce is pumping $150-million (U.S.) into the recapitalization of a Bermuda-based bank, picking up a minority interest in the lender.
CIBC's investment is part of a $550-million recapitalization of N.T. Butterfield & Son Ltd., known as Butterfield Bank. The Carlyle Group and several other institutional investors have invested the remaining $400-million, the bank said.
CIBC has also provided Butterfield, the largest independent bank in Bermuda, with a commitment letter for a senior secured credit facility of up to $500-million. Butterfield offers a full range of bank products and services in Bermuda, Barbados and the Cayman Islands.
In return for its investment, CIBC is picking up 22.5 per cent of Butterfield's equity, and will nominate two directors to its board.
"Butterfield has strong market positions in Bermuda and the Cayman Islands as well as operations in seven other jurisdictions," said CIBC chief executive officer Gerry McCaughey. "As a result of the recapitalization, we and our partner investors believe that Butterfield will continue to be a leading financial institution for its clients and will provide continued value for its shareholders."
CIBC had previously committed $150-million to a private equity fund sponsored by the Carlyle Group to invest in financial services transactions. As a result of that, the bank has indirectly invested $26-million in Butterfield, resulting in a total investment of $176-million.