German banks’ subordinated debt securities valued at 24 billion euros ($33 billion) were downgraded by Moody’s Investors Service on the prospect that new legislation will increase the risk of losses among debt holders.
The cuts apply to 248 subordinated securities together with tranches of debt programs issued or backed by 24 banks. The average rating reduction was 2 1/2 levels, Moody’s said. The subordinated debt is unlikely to benefit from future German government support, it said. Deutsche Bank AG, Commerzbank AG, Munich-based Bayerische Landesbank and DekaBank Deutsche Girozentrale, the fund manager for Germany’s state-owned savings banks, were among lenders whose securities were downgraded.
WHAT TO WATCH: *Federal Statistics Office releases Germany producer prices data for January at 8:00 a.m. CET. *Nokia Oyj patent case against IPCom GmbH in court at Mannheim, Germany, ruling expected in the morning. *Porsche SE shareholder lawsuit over 2010 meeting, hearing in Stuttgart court, scheduled for 11 a.m. *Chancellor Angela Merkel gives campaign speech in Halle an der Saale, 11 a.m.
ECONOMY: *Finland has no plans to nominate its central bank governor as a candidate to succeed ECB President Jean-Claude Trichet, Reuters reported, citing an interview with Finance Minister Jyrki Katainen. The race between Italy and Germany for the post hasn’t really changed, Reuters cited Katainen as saying. *Jens Weidmann, who is to take over as Bundesbank president on May 1, lacks experience in leading large organizations with many employees, former Bundesbank President Ernst Welteke said, Financial Times Deutschland reported, citing an interview. *Germany’s BND federal intelligence agency has no evidence that former Egyptian President Hosni Mubarak wants to leave his country, Die Welt cited Ernst Uhrlau, the service’s head, as saying in an interview. Mubarak’s comment that he wants to stay and be buried in Egypt is credible, the newspaper quoted Uhrlau as saying.
EQUITIES: *Siemens AG, Europe’s largest engineering company, said the Justice Department ended an antitrust investigation into the German maker’s power transmission systems. Siemens spokesman Alexander Becker didn’t specify why the U.S. case was closed. *Elmos Semiconductor AG, the Dortmund-based maker of chips for the car industry, posted earnings per share of 38 euro cents as sales rose 5 percent in the fourth quarter from the previous quarter, according to a release on the DGAP business wire. *Hapag-Lloyd, the container line part-owned by TUI AG, is targeting April 15 as the preliminary date for its initial public offering, Financial Times Deutschland reported, without saying where it got the information. *Bayer AG will keep its research-and-development spending steady next year at about 3 billion euros ($4.1 billion), Financial Times Deutschland reported, citing an agreement between the company and its works council.
MARKETS: *The DAX Index fell 0.1 percent to close at 7,405.51. *The Stoxx Europe 600 Index rose 0.2 percent to close at 291.16. *The MSCI Asia-Pacific Index rose 0.6 percent to 140.02 as of 7:40 a.m. Frankfurt time. *Germany’s 10-year bond yield at 3.183 *Euro -- U.S. $1.3604 as of 7:40 a.m. Frankfurt time