Deutsche Bank raises $4.8B in hybrid bonds issue

Nathan Andrada – Fourth Estate Cooperative Contributor

Frankfurt, Germany (4E) – Deutsche Bank announced on Tuesday it had doubled the amount of hybrid bonds it originally planned to issue, as the bank aggressively tried to raise its capital in the last three days.

Germany’s biggest lender said it had raised the equivalent of 3.5bn euros ($4.8bn) from the issue of hybrid bonds denominated in U.S. dollars, pounds sterling and euros.

The issue of the bonds is aimed to increase the bank’s financial reserves, which banks are required to have as tighter rules take into effect across Europe. The bonds can be used as capital for regulatory requirements.

Like other European financial firms, Deutsche Bank is under pressure to boost its capital reserves. The lender unveiled on Sunday its plans to issue 8.0bn euros in new shares, which marks the second-largest capital increase in its history.

This summer, banks will be subjected to asset quality reviews and stress tests by the European Central Bank as part of its efforts to set up a banking union that will help address future financial crises.

Deutsche Bank originally said in April that it was planning to raise 1.5bn euros from the first tranche of hybrid bonds issue worth 5.0bn euros by 2015.

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