deutsche-bank-scrambles-raise-capital-will-sell-€8-billion-stock-30-discount
THIS IS WHAT IT STARTS SMELL LIKE WHEN THE POOP STARTS HITTING THE FAN ..
THIS IS WHAT IT STARTS SMELL LIKE WHEN THE POOP STARTS HITTING THE FAN ..
Deutsche Bank Scrambles To Raise Capital: Will Sell €8 Billion In Stock At Up To 30% Discount
Remember this?
This is a chart we have been presenting since last year, updated periodically, showing just how vast Deutsche Bank's potential undercapitalization is/would be if, as in the case of Lehman, for some reason gross exposure suddenly became net, and there was counterparty failure. It is also the reason why we predicted as recently as last month when Deutsche announced it would issue another €1.5 billion in Tier 1 capital, that the German megabank's capital raising is far from over.
Sure enough, just out from Bloomberg:
In other words, it is liquidity scramble time, and the bank is willing to give anyone with deep enough pockets a 30% discount to market price just to get some additional short-term funding.
Why the scramble, especially if Europe is, as eurocrats, lying central bankers and conflicted pseudo-intellectuals like to claim "fixed?" We can't wait to find out although something tells us that the official version, that "the move is expected to boost a key gauge of the bank's
financial strength, its core Tier 1 level, to at least 11.5% of its
risk-adjusted assets, compared with 9.5% now" is merely the latest lie out of a continent where contrary to intentions, the ECB's annual stress test confirms banks are in worse shape than ever. Which, as Marathon CEO Bruce Richards, who during the SALT Las Vegas conference last week estimated European banks' equity shortfall to be around $800 billion, is perfectly understandable.
Source: Handelsblatt
This is a chart we have been presenting since last year, updated periodically, showing just how vast Deutsche Bank's potential undercapitalization is/would be if, as in the case of Lehman, for some reason gross exposure suddenly became net, and there was counterparty failure. It is also the reason why we predicted as recently as last month when Deutsche announced it would issue another €1.5 billion in Tier 1 capital, that the German megabank's capital raising is far from over.
Sure enough, just out from Bloomberg:
- Deutsche Bank preparing a capital increase, aims to raise EU8 billion through new shares by end of June, Handelsblatt says, citing unidentified people in the finance industry.
- Deutsche Bank likely to get new single investor
- Negotiations ongoing, haven’t been made final
- Deutsche Bank declined to comment: Handelsblatt
- Deutsche Bank new investor may hold 5%-8% of shares
And the punchline: Bank’s new shares may be sold with 25%-30% discount.The planned capital increase will consist of Deutsche Bank issuing a total of 360 million new shares, the person said. A single strategic investor has agreed to buy 60 million of the shares with the remainder sold to investors via a so-called rights offering, this person said. The rights offering is fully underwritten, meaning investment banks have agreed to buy any shares that investors don't purchase.
In other words, it is liquidity scramble time, and the bank is willing to give anyone with deep enough pockets a 30% discount to market price just to get some additional short-term funding.
Why the scramble, especially if Europe is, as eurocrats, lying central bankers and conflicted pseudo-intellectuals like to claim "fixed?" We can't wait to find out although something tells us that the official version, that "the move is expected to boost a key gauge of the bank's
financial strength, its core Tier 1 level, to at least 11.5% of its
risk-adjusted assets, compared with 9.5% now" is merely the latest lie out of a continent where contrary to intentions, the ECB's annual stress test confirms banks are in worse shape than ever. Which, as Marathon CEO Bruce Richards, who during the SALT Las Vegas conference last week estimated European banks' equity shortfall to be around $800 billion, is perfectly understandable.
Source: Handelsblatt
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