While speculation that Qatar investors may come to Deutsche Bank’s rescue came and went on Friday (especially after the market recalled that the alleged “white knight” may himself be nursing a massive margin loan from its first rescue of Deutsche Bankwhich included a $2 billion margin loan), the German lender quietly took advantage of the relentless global appetite for yield and on Friday evening Deutsche Bank issued its first US dollar-denominated bond in five months when its raised $3 billion in five year paper, following reverse inquiry from investors according to IFR.
The senior unsecured bond priced just below par with a generous coupon of 4.25% and at a spread of 300bp over Treasuries. The bond is the first sold by Deutsche Bank in the US dollar market since May when it raised $3.6 billion from three and five-year debt, and follows a sharp widening in its spreads.
According to Reuters, in the latest example of collecting pennies in front of a steamroller, several investors had asked about the possibility of a new debt issue from Deutsche Bank as they sought to pick up some yield. Deutsche Bank responded to those queries on Friday, and sold the bond to a limited number of accounts after gauging interest on where a new deal would come.
However, reflecting concerns about DB’s current distressed state, the new bond was sold at a sizable new issue concession of about 50bp over Deutsche Bank’s similarly dated outstanding debt. Its 3.375% senior unsecured 2021 bond, which was priced in May, was trading at a G-spread of around 240bp earlier on Friday, according to MarketAxess, after widening close to 300bp last week.
This post was published at Zero Hedge on Oct 8, 2016.
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