Deutsche Bank sells US$3 billion bond amid US settlement talks

A statue is pictured next to the logo of Germany's Deutsche Bank in Frankfurt, Germany.
A statue is pictured next to the logo of Germany's Deutsche Bank in Frankfurt, Germany.PHOTO: REUTERS

FRANKFURT (BLOOMBERG) - Deutsche Bank issued a US$3 billion (S$4.11 billion) bond even as it holds talks with United States prosecutors about a potential multi-billion dollar settlement.

The senior unsecured notes were sold last Friday in a private placement, according to data compiled by Bloomberg. A small number of US money managers bought the bonds, according to two people familiar with the matter who asked not to be identified because the sale was private.

"It's a large deal and I see it as management attempting to show that it still has market access," said Lloyd Harris, a London-based portfolio manager at Old Mutual Global Investors UK, which oversees 27 billion pounds (S$45.2 billion).

The German lender's shares and bonds have tumbled this year as Chief Executive Officer John Cryan struggles to shore up capital and boost profitability. The bank is also seeking to reach a deal with the US Justice Department to end a years-long investigation into its handling of mortgage-backed securities, after rebuffing an initial claim for a US$14 billion settlement.

Charlie Oliver, a spokesman for the lender, declined to comment on the bond sale.