Breaking News
Get 40% Off 0
🔎 See NVDA full ProTips for an instant risks or rewards Claim 40% OFF

Deutsche Bank modifies $1.25 billion AT1 note terms amid Libor transition

Published Nov 06, 2023 19:36
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
DBKGn
+1.13%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Deutsche Bank AG (NYSE:DB) has successfully altered the terms of a $1.25 billion additional tier 1 (AT1) note, shifting from the phased-out Libor rate to the Secured Overnight Financing Rate (SOFR) for coupon calculations, according to Federated Hermes (NYSE:FHI). This move is aimed at eliminating operational complications related to the usage of Libor.

Despite Deutsche Bank's initial failure to change these terms due to lack of votes, this time, the bank managed to secure investor approval by offering a consent fee of 0.5%. However, the bank still faces challenges with another $1.5 billion AT1 that requires resolution, as highlighted by CreditSights Inc.

This issue dates back to the pandemic period when punitive replacement costs compelled Deutsche Bank to retain the issue beyond its first call date and after the end of Libor. The bank's bonds, governed by German law, facilitated this voting process.

It's worth noting that approximately $21 billion worth of AT1s remain tied to Libor, suggesting potential difficulties for other banks in transitioning away from Libor. In a similar vein, Morgan Stanley's conversion of some preferred shares to a fixed-for-life rate underscored the Libor transition issue in the United States, implying that banks under New York jurisdiction might resort to call options for repayments.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Deutsche Bank modifies $1.25 billion AT1 note terms amid Libor transition
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email