Deutsche Bank announces successful completion of issuance of Additional Tier 1 capital

Maria Nikolova

The bank has placed undated Additional Tier 1 securities with a principal amount of $1.25 billion.

On February 11, 2020, Deutsche Bank AG (NYSE:DB) confirmed that it has successfully completed the issuance of Additional Tier 1 securities.

The bank has placed undated Additional Tier 1 securities with a principal amount of $1.25 billion (approximately EUR 1.15 billion equivalent).

The securities will bear a fixed coupon of 6%, payable annually, until April 30, 2026. The Bank can call the securities on each day from October 30, 2025 to April 30, 2026, thereafter on April 30th of each succeeding year. The applicable rate of interest will be reset at five year intervals starting on April 30, 2026 on the basis of the then prevailing 5 year US Treasury Yield plus the initial credit spread of 4.524 percent per year.

The securities are registered with the U.S. Securities and Exchange Commission. They (ISIN US251525AX97) are expected to be listed on the Luxembourg Stock Exchange and traded on the Euro MTF market.

The securities will be subject to a write-down provision if Deutsche Bank’s Common Equity Tier 1 capital ratio falls below 5.125 percent and be subject to other loss absorption features pursuant to the applicable capital rules.

The denominations of the securities are USD 200,000. Deutsche Bank Securities Inc. acted as sole bookrunner for the offering.

As FinanceFeeds has reported, Deutsche Bank has earlier this week unveiled its plans to issue securities that qualify as AT1 capital. The transaction marks a further step in managing Deutsche Bank’s regulatory capital requirements by preserving a level of AT1 instruments of 1.5% or more of risk-weighted assets on a fully-loaded basis. In addition, it supports progress towards the 4.5% fully loaded leverage ratio target for 2020.

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