Q2 2019 Fixed Income Investor Presentation
Canadian Bail-in Regime - Comparison to Other
Jurisdictions
Bail-in implementation in other jurisdictions has increased the riskiness of bail-inable
bonds vs. non-bail-inable bonds:
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Legislative changes prohibit bail-outs, increasing the probability that bail-in will be relied on
■ The hierarchy of claims places bail-in debt below deposits and senior debt through structural
subordination, legislation or contractual means
■ Bail-in is expected to rely on write-down of securities, imposing certain losses on investors
The Canadian framework differs from other jurisdictions on several points:
■ The Canadian government has not introduced legislation preventing bail-outs
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Canadian senior term debt will be issued in a single class and will not be subordinated to another class
of senior term debt like other jurisdictions such as the US and Europe
■ Canada does not have a depositor preference regime; bail-in debt does not rank lower than other
liabilities
■ No Creditor Worse Off principle provides that no creditor shall incur greater losses than under insolvency proceedings
■ There are no write-down provisions in the framework
Conversion formula under many scenarios may result in investor gains
CIBC Q2 2019 Fixed Income Investor Presentation
CIBC
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