Deutsche Bank Doubles Issuance of Reverse Convertible Securities

Deutsche Bank AG (DBK), Germany’s largest lender, doubled its sales this year of bonds that convert into shares when a company’s stock plunges.

The bank has issued 1,224 reverse convertibles since the start of the year, compared with 510 in the same period for 2011, according to data compiled by Bloomberg that excludes U.S. sales.

Most of the Frankfurt-based bank’s notes were linked to the shares of Germany’s biggest companies, including Siemens AG (SIE), Volkswagen AG (VOW) and Bayerische Motoren Werke AG. (BMW)

Buyers of reverse convertibles get their money back in full at maturity if the shares of the reference company are above a preset level on a specified date or during the life of the security. If the stock is below the barrier, investors get shares in the company instead of cash.

Deutsche Bank sold 100 million euros ($130 million) of 5 percent 10-month securities tied to BASF SE (BAS), the world’s largest chemical maker, data compiled by Bloomberg show. The barrier for the notes is 58 euros, or 0.5 percent below the current price of 58.32 euros at 12 p.m. in Frankfurt. The valuation date is March 26, 2013.

Deutsche Bank spokesman Nick Bone in London declined to comment on the lender’s reverse convertibles sales.

To contact the reporter on this story: Alastair Marsh in London at amarsh25@bloomberg.net

To contact the editor responsible for this story: Paul Armstrong at parmstrong10@bloomberg.net

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