Deutsche Bank sells US$3b bond as investors seek spread

[NEW YORK] Deutsche Bank issued its first US dollar-denominated bond in five months on Friday when its raised US$3 billion through a five-year issue following reverse enquiry from investors, a person close to the deal told IFR.

The senior unsecured bond priced just below par with a coupon of 4.25 per cent and at a spread of 300bp over Treasuries.

The bond is the first sold by Deutsche Bank in the US dollar market since May when it raised US$3.6 billion from three and five-year debt, and follows a sharp widening in its spreads.

Several investors had asked about the possibility of a new debt issue from Deutsche Bank as they sought to pick up some yield.

Deutsche Bank responded to those queries on Friday, and sold the bond to a limited number of accounts after gauging interest on where a new deal would come.

Deutsche Bank's bonds, in particular its riskiest Additional Tier 1 issues, have been under intense pressure since mid-September when the US Department of Justice asked the bank to pay US$14 billion to settle an investigation into its selling of mortgage-backed securities.

The new bond offered a sizable new issue concession of about 50bp over Deutsche Bank's similarly dated outstanding debt, reflecting investors' heightened concerns about the bank.

Its 3.375 per cent senior unsecured 2021 bond, which was priced in May, was trading at a G-spread of around 240bp earlier on Friday, according to MarketAxess, after widening close to 300bp last week.

Deutsche Bank was sole lead on the new 144a transaction.

REUTERS