Deutsche Bank not to call Additional Tier 1 Notes on April 30, 2020

Deutsche Bank AG (NYSE:DB) today announced its decision to redeem the USD 800 million 6.55% Trust Preferred Securities of Deutsche Bank Contingent Capital Trust II (“DB CCT II”, ISIN: US25153X2080) on May 26, 2020, that is, the first business day following the scheduled May 23, 2020 payment date.

Deutsche Bank also announced that it will not exercise its option to redeem the USD 1.25 billion 6.25% Additional Tier 1 (AT1) Notes (ISIN: XS1071551474) on April 30, 2020, the first available call date for such securities.

The bank explained that these decisions reflect its strategy of evaluating all call decisions primarily on an economic basis in order to manage its cost of funding, considering market conditions and the current and future regulatory value of the respective capital instruments.

Let’s recall that, on February 11, 2020, Deutsche Bank confirmed the successful completion of 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 bear a fixed coupon of 6%, payable annually, until April 30, 2026. The Bank said back in February that it 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.