Deutsche Bank announces launch of new euro-denominated Tier 2 issuance
The new Tier 2 issuance is set to increase Deutsche Bank’s total capital ratio.
Deutsche Bank AG (ETR:DBK) today launches a new euro-denominated Tier 2 issuance and announces a public tender offer for certain of its euro-denominated senior non-preferred securities. The target acceptance volume of the tender is EUR 2.0 billion and the Tier 2 issuance will be of benchmark size.
The new Tier 2 issuance is set to increase Deutsche Bank’s total capital ratio and, as a consequence of the implementation of CRD V rules regarding the composition of P2R (Pillar 2 Requirement), improve its buffer versus regulatory capital requirements.
Let’s recall that Deutsche Bank’s CET1 capital ratio was 12.8% at the end of the first quarter of 2020, compared to 13.6% at the end of 2019, and approximately 240 basis points above regulatory requirements. This development reflected:
- A reduction of approximately 30 basis points from the new securitization framework which took effect on January 1, 2020;
- COVID-19 related impacts, largely expected to be temporary, of approximately 40 basis points mainly driven by client drawdowns and higher prudent valuation reserves;
- Approximately 10 basis points from regular business growth.
The public tender offer, which is expected to expire on May 15, 2020, is designed to manage the Bank’s overall Minimum Requirement for Own Funds and Eligible Liabilities (MREL) supply by retiring various senior non-preferred securities, some of which lose their MREL recognition during 2020.
It encompasses the following euro-denominated securities issued by Deutsche Bank AG:
- 0.375% January 2021 (ISIN: DE000DL19T18);
- 1.625% February 2021 (ISIN: DE000DL19UQ0);
- 1.250% September 2021 (ISIN: DE000DB7XJB9);
- 3mE+65bp September 2021 (ISIN: DE000DB7XJC7);
- 1.500% January 2022 (ISIN: DE000DL19TA6);
- 1.875% February 2022 (ISIN: DE000DL19UR8);
- 3mE+80bp May 2022 (ISIN: DE000DL19TQ2);
- 2.375% January 2023 (ISIN: DE000DB5DCS4);
- 1.125% March 2025 (ISIN: DE000DB7XJP9);
- 2.625% February 2026 (ISIN: DE000DL19US6);
- 1.750% January 2028 (ISIN: DE000DL19T26).
