Deutsche Bonds "Dropping Like A Stone" As 'Most Dangerous Bank In The World' Plummets

Tyler Durden's picture

"They are dropping like a stone," warns one European credit strategist as signals from the bottom of Deutsche Bank's capital structure signal a "huge increase in the potential for a coupon skip."


With DB stock tumbling towards record lows again...


Back to an EUR11 handle...biggest drop since Brexit


Bloomberg reports, the bank’s 1.75 billion euros ($2 billion) of 6% additional Tier 1 bonds, the first notes to take losses in a crisis, are crashing... as the world's most systemically dangerous bank faces existential problems once again.

Deutsche Bank AG’s riskiest bonds plummeted after the German lender received a $14 billion claim from the U.S. Justice Department to settle an investigation into the firm’s sale of residential mortgage-backed securities.


“They are dropping like a stone,” said Tomas Kinmonth, a credit strategist at ABN Amro Bank NV in Amsterdam. “The fine, even if reduced, could surpass all provisions held by the bank.”


Interest payments on additional Tier 1 bonds can be switched off if a lender runs into trouble and Germany’s biggest bank has the least available distributable funds among banks in Europe, according to CreditSights Ltd. The bank said in March it had 1.1 billion euros available to pay AT1s for the year.


“Anything above $10 billion will make things very difficult for them,” he said. “This is unequivocally bad for their AT1s. It hugely increases the potential for a coupon skip.”

Then who's next?


As we previously conclude, considering two of the three most "globally systemically important", i.e., riskiest, banks just saw their stock price scrape all time lows earlier this week, we wonder just how nervous behind their calm facades are the executives at the ECB, the IMF, and the rest of the handful of people who realize just close to the edge of collapse this world's most riskiest bank (whose market cap is less than the valuation of AirBnB) finds itself right now.

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opaopaopa's picture

let's go already

The Alarmist's picture

Some people say AfD is a one trick pony (immigration), but the severe fines to DB and VW among others might just give them another arrow in the quiver (battling foreign mercantilism).

knukles's picture

Existential problems? 
Call the French School of Rousseauian Philosophy to Get Over It!

Gonna be an interesting display of countrparties and watching ISDA declare an "event of default"*.

A coupon "skip" you say?

* As in the Goldman way.  "I got mine, go fuck yourself"

Mr. Universe's picture

Gee, is it time for Germany to start another war already? (wink wink)

Jim Sampson's picture

Where's the "you are here" chart???

The central planners's picture

Last time it heppend DB stated that they were solid as a rock now they are dropping like one.

Baa baa's picture

May I see your papers, please.

SilvaDolla's picture

"Let's go already!"
-Bender Bending Rodrigez

Erek's picture

> DB = Deutsche Bank

> DB = Dangerous Bank

SomethingSomethingDarkSide's picture

*Sirens blaring, strobes flashing*


LadiesLoveCoolJames's picture

If only Lehman had 2 or 3 rich sugar daddies who will pay anything to avoid the embarrassment of losing one of the banker Crown Jewels. Isn't it great to be so tragically interconnected to the world economy that you will never fail.

Muad'Grumps's picture

When do the Co-Co bonds start converting?

SomethingSomethingDarkSide's picture

When Du Hast can be heard on the winds of change

RawPawg's picture

i got this CD

can't understand the lyrics,but it's got some damn fine beats

American Psycho's picture

Love all the Rammstein references.

Bubba Rum Das's picture

"When Du Hast can be heard on the winds of change"
Du Hast? Yes, where's Falco when you need him...
Oh, that's right. He's dead. Like the German economy.

UnschooledAustrianEconomist's picture

"Du hast" is Rammstein.

Falco would fit with "Out of the dark".

Falco, one of our greatest.

cherry picker's picture

Been through this recession/depression stuff too many times and I can see another one coming big time.

I bought 80 acres and getting out of dodge.  

blue51's picture

Can I sub-sub lease 10 of those acres ??

CNONC's picture

And then enroll in the CRP for income, and borrow against it.

blue51's picture

I'm thinking , tent only timeshares.

wildbad's picture

can i rehypothecate the other 40 and sell claims on those to 400000 insovent buyers?   bbbbbut DB did.

GPW's picture

Great.  Can I just come and live with you for free?  Please send GPS coordinates.  

Offthebeach's picture

I'm time sharing my van down by the river if anyone want in. Water view, trees. Walking distance to gas stantion for whore's bath.( $1 to clerk for key. Bring own towel )

Rainman's picture

Bankster domino #1 leaning into domino #2  etc. etc.

Sky flyer's picture

I need my "since Lehman" fix now give it to me!

pods's picture

DB= detonaten bombenswaeger. 


Nunyadambizness's picture

And so it begins....  ?

buzzsaw99's picture

coupon skip, lulz. that's a nice way of putting it. lmao.

everyone talks about nonfinancial corporate debt as if financial corporate debt is no big deal since it all balances out. we'll see if that's truly the case or not soon enough. it better be because these aren't token amounts we're talking about here. leverage bitchez. it works great as long as everybody marks to fantasy and nobody has to sell.

rlouis's picture

NOT an accident, waiting to be triggered...?

Jim in MN's picture

Most riskiest.

It's got a real ring to it.

Byte Me's picture

Maybe DB need to politely tell the DOJ

"Can't pay, won't pay."

(bet it'll work - and get a lateral easing from the FED crowd (again))

fattail's picture

Threaten to skip the coupon and default and bring the whole thing down.

nightwish's picture

The DOJ - farcical agency that it is - tries to make good to the public by going after DB just to detract from its utter dereliction of duty with Hillarys numerous crimes. 'Lets go after bankers, that'll keep people happy with us for now' 

sister tika's picture

And who were the fine folks who managed Deutsche Bank right into the abyss with trillion-dollar derivatives and shitty loans over the past 8 years? Could it be Goldman Ballsachs?

Paul Morphy's picture

DB cannot be permitted to fail for literally trillions of reasons.


Even if DB fails she will survive. The German taxpayer will be left picking up the pieces.

Nation states are broke.

buzzsaw99's picture

yep. they will always recapitalize the big ones or give them to an even bigger bank because they can't liquidate the asset book without crashing this farce of a market.

Dark Daze's picture
Dark Daze (not verified) Paul Morphy Sep 16, 2016 10:18 AM

How can a country with a GDP of 4.5 Trillion save a bank with liabilities of 75 Trillion?

Jim in MN's picture

Please refrain from asking that question.  It is done in a very sound but absolutely arcane manner, which is not to be spoken of ever.

.....hint of sulfur in the air......

Dien Bien Poo's picture

Should stop taking DB as a counterpart. Its coming. Drexel Burnham, Lehman, DB. Birds of one feather.

flaminratzazz's picture

And they are down to seeds and stems again too.

New_Meat's picture

DoJ is to DB as Suck Schumer is to IndyBank.

Pliskin's picture

The Department of Justice is to justice what John Wayne Gacy is to Childrens parties!