Canadian Imperial Bank of Commerce, Canada's fifth-largest lender, said its investments in the U.S. subprime mortgage market are ``well below'' the $2.6 billion cited in some news reports. ``CIBC does not disclose individual securities positions but confirms its previous statement to the media that its unhedged exposure to this sector is well below $2.6 billion,'' the Toronto-based bank said today in a statement.

New York-based newsletter Grant's Interest Rate Observer reported on June 15 that CIBC may have as much as $2.6 billion in investments linked to subprime mortgage-backed securities. Barron's also cited CIBC in an article yesterday about mortgage- backed securities such as collateralized debt obligations.

Most of the securities held are rated AAA, and the lender has insurance to cover some of the investments, the bank said. Bank spokesman Rob McLeod declined to say how much CIBC has in these type of securities.

CIBC holds investments in mortgage-backed securities including a CDO called Tricadia, CIBC World Markets Chief Executive Officer Brian Shaw said on a May 31 earnings conference call. So-called CDOs package mortgage bonds into new securities. The Tricadia 2006-7A has a face value of $328.5 million, according to Bloomberg data.

``Our risk in this space is not at all major,'' Shaw said during the call. ``We don't view this as a major credit item at all for us.''

Hedge Funds

Banks, hedge funds and other investors may face losses of $52 billion from investments in bonds backed by U.S. subprime mortgages amid the fallout from rising mortgage delinquency rates, according to a Credit Suisse report. Bear Stearns Cos. in New York, the world's fifth-biggest securities firm, is providing $1.6 billion to rescue one of its hedge funds that invested in subprime debt.

Banks will probably lose between $5 billion and $15 billion from their investments in CDOs, said Credit Suisse analysts led by Ivan Vatchkov in London.

"It is scarcely surprising that a large fixed-income trading operation, as with all Canadian banks, has some exposure to subprime residential mortgage-backed securities in the U.S.,'' BMO Capital Markets analyst Ian de Verteuil said yesterday in a research note. ``While losses can and do occur in any trading operation, we believe the impact of the meltdown in the U.S. is limited for CIBC."

Canadian Imperial shares fell 1 cent to C$94.49 at 4:10 p.m. trading on the Toronto Stock Exchange. The stock has fallen 3.9 percent this year, the second-worst performer in the nine- member Standard & Poor's/TSX Banks Index.