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Derivatives

CIBC Considers Cash, Synthetic CDO Group Merger

CIBC World Markets is likely to merge its cash and synthetic collateralized debt obligation operations, following the loss of a 21-strong cash securitization team to CDC IXIS Capital Markets North America last month. David Allan, managing director, head of the Canadian securitization group and head of global synthetic credit structuring in Toronto, explained that for the past few years CIBC has upheld an increasingly artificial distinction between its cash and synthetic structuring operations by running two distinct groups. Following the departure of the New York-based cash staffers, including the groupÕs head Ken Wormser, CIBC is now reviewing its organization, with a likely outcome being the merger, he said.

Details, such as who would head up any combined entity, and whether the group would be governed from New York or Toronto, have not yet been decided, said Allan. While estimates on the number of staffers heading to CDC originally stood as high as 31, the final number of departures was only 21, he said (DW, 3/13). Around five staffers remain in the firm's New York cash conduit business, which would potentially be merged with the approximately nine-strong synthetic group located globally, he noted. Further additions to the combined group may also be made, he added.

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