UPDATE 3-CIBC warns of "large charge" as subprime woes grow

(Adds Fitch, Moody's statement, closing share prices. In U.S. dollars unless noted)

By Nicole Mordant

VANCOUVER, British Columbia, Dec 19 (Reuters) - There is a "reasonably high probability" that Canadian Imperial Bank of Commerce (CM.TO: Quote, Profile, Research, Stock Buzz) will report a "large charge" in its first-quarter results, the bank warned on Wednesday, as pain from its exposure to the U.S. subprime mortgage market deepens.

CIBC, Canada's fifth-biggest bank, did not give a firm figure for the charge but said the subprime hedge protection it bought from troubled bond insurer ACA Financial Guaranty Corp was valued at $2 billion as of Nov. 30.

That had risen from $1.7 billion at the end of October, showing a deterioration in the subprime housing market.

If the bond insurer -- whose credit rating was slashed by Standard & Poor's on Wednesday to junk level "CCC" from "A" -- were to fail, CIBC could lose that amount or more.

Shares in CIBC, which were already down 26 percent this year before Wednesday's developments, fell a further 1.6 percent, or C$1.15, after the announcement to close at C$71.14 on the Toronto Stock Exchange.

One analyst said a $2 billion charge likely isn't enough to clear CIBC's subprime exposure, which is held via complicated structured finance deals called collateralized debt obligations, most of which are hedged.

"There was a collective sigh across (financial centers) Toronto and Montreal, but it wasn't a sigh of relief," when CIBC's statement came out, said Genuity Capital Markets analyst Mario Mendonca.