Deutsche Bank sells $3 billion bond as investors seek spread

A Deutsche Bank logo adorns a wall at the company's headquarters in Frankfurt, Germany June 9, 2015. REUTERS/Ralph Orlowski/File Photo

NEW YORK (IFR) - Deutsche Bank issued its first US dollar-denominated bond in five months on Friday when its raised $3 billion through a five-year issue following reverse enquiry from investors, a person close to the deal told IFR.

The senior unsecured bond priced just below par with a coupon of 4.25% and at a spread of 300bp over Treasuries.

The bond is the first sold by Deutsche Bank in the US dollar market since May when it raised $3.6 billion from three and five-year debt, and follows a sharp widening in its spreads.

Several investors had asked about the possibility of a new debt issue from Deutsche Bank as they sought to pick up some yield.

Deutsche Bank responded to those queries on Friday, and sold the bond to a limited number of accounts after gauging interest on where a new deal would come.

Deutsche Bank’s bonds, in particular its riskiest Additional Tier 1 issues, have been under intense pressure since mid-September when the US Department of Justice asked the bank to pay $14 billion to settle an investigation into its selling of mortgage-backed securities.

The new bond offered a sizable new issue concession of about 50bp over Deutsche Bank’s similarly dated outstanding debt, reflecting investors’ heightened concerns about the bank.

Its 3.375% senior unsecured 2021 bond, which was priced in May, was trading at a G-spread of around 240bp earlier on Friday, according to MarketAxess, after widening close to 300bp last week.

Deutsche Bank was sole lead on the new 144a transaction.