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Deutsche Bank to issue at least $1 billion in AT1 securities
Deutsche Bank said on Monday it would issue at least $1 billion in Additional Tier 1 (AT1) securities as the bank manages its regulatory capital requirements. The decision was made by the management board and approved by a committee of the supervisory board, the German bank said.
Deutsche Bank’s decision to issue AT1 securities will soothe investor worries over an existing U.S. dollar contingent convertible (CoCo) instrument that is redeemable in April this year. AT1 securities are a type of CoCo instrument, which were designed in the wake of the financial crisis to try to ensure investors, rather than taxpayers, would be on the hook if a bank runs into financial difficulties.
While CoCo debt is perpetual by nature, banks almost always redeem them when the first “call” date comes due, or risk stoking speculation over their cash and solvency position. Speculation was rife over whether or not Deutsche Bank would redeem the CoCo bond given its recent travails.
The German bank’s decision comes at a time when the market for CoCo bonds has arguably never been better, with several Italian banks tapping that market more expected.
https://www.reuters.com/article/us-deutsche-bank-securities/deutsche-bank-to-issue-at-least-1-billion-in-at1-securities-idUSKBN20428J
Deutsche Bank Shares Rally As Capital Group Reveals Stake
https://www.wsj.com/articles/deutsche-bank-shares-rally-on-capital-group-stake-11580995004
from Feb. 6th 2020
Contingent Convertibles – CoCos
What Are Contingent Convertibles – CoCos?
Contingent convertibles (CoCos) are a debt instrument issued by European financial institutions. Contingent convertibles work in a fashion similar to traditional convertible bonds. They have a specific strike price that once breached, can convert the bond into equity or stock. The primary investors for CoCos are individual investors in Europe and Asia and private banks.
CoCos are high-yield, high-risk, products popular in European investing. Another name for these investments is an enhanced capital note (ECN). The hybrid debt securities carry specialized options that help the issuing financial institution absorb a capital loss.
In the banking industry, their use helps to shore up a bank's balance sheets by allowing them to convert their debt to stock if specific capital conditions arise. Contingent convertibles were created to help undercapitalized banks and prevent another financial crisis like the 2007-2008 global financial crisis.
The use of CoCos is not allowed in the U.S. banking industry. Instead, American banks issue preferred shares of equity.
https://www.investopedia.com/terms/c/contingentconvertible.asp
working on it anon. give me a few minutes.
because they are so stuffed with crappy performing assets(what they call them) they are forced to jettison a large portion of them or place them into somewhere else so as to not affect it's qrtly reporting numbers. They first stated that they were going to offload $50b into a "bad bank" see article below for the end play with that pile.-translation:shove them aside (ala enron) so they do not get affected by them when the regulators look at the books-not that they do anyting eihter but it's all for appearences really. Regulators are in the back pocket of the system too.
All they really did was punt a big chunk over to goldman sachs late last year. Approx $50b of a much larger pile. They pushed so much crappy debt out in to the world (think Greek Debt crisis) to name but one example- and they never thought they would have to deal with it later. They counted on a crash having laready habbened by now so they are stuck with an ass-ton of-essentially- non-performing assets (on paper) that is not performing. So it's a game of hot potato. Goldman will have to deal with this later this year.
DB is a creation bank so they were at the forefront of creating trillions of $'s of derivatives (paper not backed by anything) and shoved them into the world's banking system. The piper is need ing to be paid so to speak now so they are fucked because of the low-yield all of that shit generates.
They are basically the lynch-pin of the entire paper backed banking system. IF they "go under" it sets off a daisy-chainreaction in all the other banks of the entire world. This is why they spend so much time playing it down.
Deutsche Bank sells $50 billion in assets to Goldman amid overhaul
https://www.reuters.com/article/us-deutsche-bank-restructuring-idUSKBN1Y11EL
hope that helps.
np. better day today for you I'm guessing.
btw ty for putting those pics on sat in. After that , and the board fuckery I checked out for most of the weekend.
you get it. It's not just DB. Essentially all of them did it. Some to a lesser extent. here is the most current list of the financial liability that the US banks carry( JP Morgan is the serial offender-it's in the trillions of $'s). Keep in mind it's just paper but they are allowed to do this over and over. If the positions do not go the way they want they just create some money/debt and "fix it" The main reason the FRB needs to be taken out to the shed and have it's pee-pee whacked. They are the regulator for our banks and they have lied to us since it strated in 1913. Don't feel slow. It's complicated, but not really once you become familiar with the language, if you are not exposed to it. Took me a few years before I even got it and I've been doing this for 30 years. Have not made an active trade in 7 years so I can be impartial about what I speak about. Not pushing an agenda or position to defend like the financial media.
was around last night after it settled, saw you had a rough one. I stay pretty quiet now-under the radar as iy was pretty busy. Surface from time to time-memes mostly and jump in when I can, like the db stuff. It bores the shit out of me now but I know it so If i can help I do. have a good rest
so you saw that doc…that is a blueprint (much smaller) version of how the entire banking system is structured. Fastow, the CFO created a shell company called chewco and several others, named after chewbacca. Think 10''s of thousands of Chewco's spread out into the banking system. All the banks will/are affected by it. They just don't want anyone to ask.