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Deutsche (DB) Plans to Offer Additional Tier 1 Securities
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With an aim to manage regulatory capital requirements, Deutsche Bank (DB - Free Report) plans to issue securities that qualify as Additional Tier 1 (AT1) capital. The issuance is expected to be of benchmark size with a minimum of $1 billion.
The securities are registered in the United States and the denomination is expected to be about $200,000. Deutsche Bank Securities Inc. will act as sole bookrunner for the placement.
Per the bank, decision to issue AT1 securities was made by the management board and approved by a committee of the supervisory board.
The securities will be subject to a write-down provision if the German lender’s common equity tier 1 (CET1) capital ratio will fall below 5.13%. as of Dec 31, 2019, the bank’s CET1 ratio was 13.6%. The securities are also subject to other loss-absorption features pursuant to the applicable capital rules.
These AT1 securities and contingent convertible capital instruments or CoCo bonds, absorb losses when the capital of the issuing financial institution falls below a supervisor-determined level.
Others banks such as UBS Group (UBS - Free Report) , Credit Suisse , Societe Generale Group and Royal Bank of Scotland issued about €91 billion of this security from April 2013 to early 2016.
Our Take
Deutsche Bank's efforts to improve financials by offloading unprofitable businesses and continued investments in order to expand its fee income sources are commendable. However, litigation issues related to past misconducts continue, and legal costs might deter bottom-line growth. Also, low interest rates in the domestic economy keep the top line under pressure.
Over the past year, the stock has gained 20.6% on the NYSE against 5.3% decline recorded by the industry.
Deutsche Bank currently carries a Zacks Rank #4 (Sell).
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Deutsche (DB) Plans to Offer Additional Tier 1 Securities
With an aim to manage regulatory capital requirements, Deutsche Bank (DB - Free Report) plans to issue securities that qualify as Additional Tier 1 (AT1) capital. The issuance is expected to be of benchmark size with a minimum of $1 billion.
The securities are registered in the United States and the denomination is expected to be about $200,000. Deutsche Bank Securities Inc. will act as sole bookrunner for the placement.
Per the bank, decision to issue AT1 securities was made by the management board and approved by a committee of the supervisory board.
The securities will be subject to a write-down provision if the German lender’s common equity tier 1 (CET1) capital ratio will fall below 5.13%. as of Dec 31, 2019, the bank’s CET1 ratio was 13.6%. The securities are also subject to other loss-absorption features pursuant to the applicable capital rules.
These AT1 securities and contingent convertible capital instruments or CoCo bonds, absorb losses when the capital of the issuing financial institution falls below a supervisor-determined level.
Others banks such as UBS Group (UBS - Free Report) , Credit Suisse , Societe Generale Group and Royal Bank of Scotland issued about €91 billion of this security from April 2013 to early 2016.
Our Take
Deutsche Bank's efforts to improve financials by offloading unprofitable businesses and continued investments in order to expand its fee income sources are commendable. However, litigation issues related to past misconducts continue, and legal costs might deter bottom-line growth. Also, low interest rates in the domestic economy keep the top line under pressure.
Over the past year, the stock has gained 20.6% on the NYSE against 5.3% decline recorded by the industry.
Deutsche Bank currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>