Deutsche Bank Raises $3 Billion In Debt, As Hedge Fund Explains What Its “Bail-In” Would Look Like

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.