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Deutsche Bank To Sell Up To 90 Million Shares, Will Raise €2.8 Billion In New Capital
And just like that, European banks are back in capital raising mode, starting with what is perceived by some as Europe's strongest bank (alternatively, the most undercapitalized): Deutsche Bank, which at least check had a Core Tier 1 cap ratio somewhere south of 2%.
- DEUTSCHE BANK TO SELL UP TO 90 MLN NEW SHARES TO RAISE EU2.8B
- NEW SHARES WILL HAVE DIVIDEND ENTITLEMENT FOR 2012
- DEUTSCHE BANK SAYS NO PUBLIC OFFERING PLANNED
- DEUTSCHE BANK SHRS WILL BE PLACED VIA ACCELERATED BOOKBUILD
- PLANS ADDITIONAL CAP MEASURES OF UP TO €2 BILLION IN THE NEXT YEAR
- POTENTIAL ISSUANCE OF ADDED SUB CAP INSTRUMENTS
Since this is about 10% of the company's total float, the stock is not happy.
The question why DB announced this just ahead of its earnings release should certainly make one ask just how well capitalized Europe (where every bank purports to having a fortress Basel III balance sheet) truly is?
From the release:
The Management Board of Deutsche Bank AG (XETRA: DBKGn.DE / NYSE: DB) resolved today, with the approval of the Supervisory Board, to execute a capital increase, which is intended to raise gross proceeds of approximately EUR 2.8 billion. The purpose of the capital increase is to strengthen the equity capitalisation of the bank.
It is intended to issue up to 90 million new shares from authorised capital excluding pre-emptive rights. The new shares will have full dividend entitlement for the fiscal year 2012. They will be placed with institutional investors by way of an accelerated book build offering. There will be no public offering. Deutsche Bank AG is acting as sole bookrunner for the offering.
Additionally Deutsche Bank intends to strengthen its total capital structure via the potential issuance of additional subordinated capital instruments of up to EUR 2 billion over the next twelve months.
The securities of Deutsche Bank AG mentioned in this release have not been registered under the Securities Act of 1933, as amended ('Securities Act') and may not be offered, sold or delivered within the United States absent registration under the Securities Act or an exemption from registration requirements.
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10% dilution. That is pretty desperate. Guess they exhausted the debt market.
Bingo. With rates so low, that is the only answer.
So that's bullish, right?
Cue to Merkel's youtube rap video "prize staveeleetee!!!"
I guess price stability does not apply to DB stock.
Why doesn't DB just put up a linsucks cluster to churn out buttcoins 24/7?
Ich bin wohlhabend, Hündin!
Who will buy their shares? Other banks?
No.... mom and pop will buy them. It's a safe bet and a way to get some return on your hard earned savings during retirement. </s>
Depositors (aka lenders) will be FORCED to buy them.
Bail-in Cyprus style, depositors get bank shares in return. They can't sell them until one year passes, by which time those shares will be....worthless.
€2.8 B ?
Geez.. that isn’t enough for a weekend’s blow for a good trader anymore.
Mom and pop are too broke. Probably the Fed helping to monetize the Deustche, they're the big stock buyers right now.
And now you know why so many TBTF banks are trading below Book Value, some even below TANGIBLE Book Value. You never know when the train is gonna come down the tracks and flatten you, as just happened here.
When are they going to break these motherfucking TBTF banks up? My God, they're worth more in PIECES than they are as a going concern.
Where's Gordon Gekko when you need him? Shareholders, are you listening?
Who will buy their shares? Other banks?
No.
Future shareholders formerly known as depositers.
I hear tell that banks will only lend money to you if you don't actually need it. So I guess Deutsche Bank doesn't really need the new capital.....so everyone will gladly 'lend' it to them.
SUCKERZ!
Hmm. "a cogent argument indeed." as you well know I'm no better. Great story..."by the book" so to speak (insert giggle here.) no story at all but a piece of rock hard reality. Can't speak to DB (again we can only speculate here which why we are here!) but I believe the "political" or "strategic" term is "gambit." I'll leave it to you all to figure out this "banking thing" is somehow "war by other means." the process of just borrowing and saving seems simple enough...
Of course it is! All news in Europe is bullish over the last two weeks. Children eating garbage in Greece? Bullish! 28% unemployment in Spain? Bullish! PMI in Germany tracking down 3% lower than an already crap number? Yes, you guessed it, BULLISH!
Bernanke, the Fed and ECB will buy up all those shares with printed money in seconds.
Their all in the stock market buying more than 10%. Their backstopping everything, except a currency collapse.
More economic cannabalism. Is all that is left now that organic yield is history and synthetic yield is imploding.
Will they disclose that this common stock has preference over bond holders, preferred stockholders and depositors? It might help marketing efforts.
DoucheBank is about to collapse!
Time to wear some shorts!
I've asked my borker to put in a bid using BitCoins. Is that the same thing...?
Watch out Buble Bernanke, the Fed and the ECB are buying shares with their magic printed money.
You know they boast about having unlimited magic money.
Never!
but... German banks are the pillars of European finance.... LOL! ...cue knock on effects...
Will the dilution be in force before or after earnings are announced? Is this instant stock offering or does it require going through a filing?
It does seem a bit odd either way, what does the additional $$$ get them?
Couldn't DB sell more of its gold to raise capital? Oh, I forgot, they already sold it all.
Did they ever have any? I'm beginning to think the fuckers never had any and were in on the ETF creation scam as a way to cover their fraud.
Sounds like a chance to get in on the ground floor. How do I get in?
Wait for the sub-basement stop...
Why issue shares to raise cash when you can force your depositors to bail in?
& if they don't like it, well ..... fuck them. Bankers know what's best.
Why rape just one orifice?
"Some call it rape, others call it rapture." -anonymous Brusselcrat -
I'm sure they're just selling the shares to let the plebas share in the wealth.
I still get a chuckle out of this http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=logarithmic&chdeh=1&chfdeh=0&chdet=1367265600000&chddm=256725&chls=IntervalBasedLine&cmpto=NYSEARCA:SPY&cmptdms=0&q=NYSEARCA:USO&&fct=big&ei=BJ5-UcCQOZTJ0AGOTw
For a shorter-term view http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=logarithmic&chdeh=1&chfdeh=0&chdet=1367265600000&chddm=80334&chls=IntervalBasedLine&cmpto=NYSEARCA:SPY&cmptdms=0&q=NYSEARCA:USO&&fct=big&ei=o55-UeCVGJKp0AGEeQ
Good thing dispoable income is rising, that leaves plenty of room for prices on oil to rise.
Don't worry, stock will be up 2 to 3 % tomorrow. Has been shorted by London HF crowd. The piper has to be payed.
They must of run the zeros right off the end of the memory stick.
Cyprus must have not had enough Gold
As long as they can keep managing JGBD short japan bonds etf, its all good....
Better a secondary issuance rather than the "bail in" of Deutsche Bank account holders.
DB has already raided safe deposit boxes.
Margins are a bitch.
Ever since Greg Lippmann left, the good old days are over at DB.
It is a gigantic, failed Hedge Fund at this point, with a bunch of twerpy finance nerds with no instinct and then a bunch of incompetent wannabes.
After laying off 7,000, do they even have a fixed income trading desk at all or are all of those debt trades run through some Hal 3000 under the ECB tower?
Amazing DB is still leveraged 36 to 1 and still alive.
On life support, until 'organ transplant' recipients can be lined up.
If they need capital they can always dip into depositor accounts or fall back on the "Oh no! We're going to fail and collapse the financial system unless we get a taxpayer bailout!" routine.
Pretty smart. Better sell crap now then sell the crap later after the market collapsed as per plan.
This DB secondary is a the start of a new trend in financials I fear. There is never only one cockroach.
I'll give you 3 billion euro's! Wait while I plug in my color printer. Wait, I have to go to Staples. My color ink cartridge is empty.....
Anyone else notice the huge volumes in FAZ lately? Is someone postioning for a financials meltdown?
Meanwhile, back at the Morgue....Legs Dimon has Blythe bent over the desk doing it doggy style.
Ben will buy, its all good.
Bernanke, the Fed and the ECB will suck up all these shares in just seconds with their unlimited printing press.
Why not borrow at 0.0000000% from the Bernanke Bankruptcy Corporation?
Lemme see if I understand these Germans...
D people are to trade in their paper money (or digital money on DB's ledgers) to an enterprise whose business it is to create more paperware (ledger assets), in the hopes of getting more paper/ledger assets later?
Since paperware seems a 'growth' industry, would the "correct" German thing to do, be to 'long' paperware? And 'short' hardware or real assets?
Douche Bank strikes again!
Pump the stock first (Central Bank buying) and then issue shares to recapitalize the stock. Once that is done Central bank can stop pumping the market and let stagflation start.
From the article:
"DEUTSCHE BANK TO SELL UP TO 90 MLN NEW SHARES TO RAISE EU2.8B"
So, does this mean they are truly just creating new shares out of thin air to sell them to the open market? Gosh, just think if they did that with real money. /sarc