Deutsche Bank AG will be able to make interest payments on its riskiest debt this year and next, Moody’s Investors Service said.
The bank can make payments due in April and only “a major, unforeseen event” would prevent those due a year later, Peter Nerby, a Moody’s analyst, wrote in a statement Monday. The company has a Ba3 rating on the bank’s so-called additional Tier 1 notes, which is three levels below investment grade.
Moody’s view may buttress Deutsche Bank’s efforts to reassure investors and bondholders after concerns about profit and financial strength caused a slump in its debt and shares. The Frankfurt-based lender also has announced plans to buy back about $5.4 billion of bonds, including some issued barely a month ago, as well as publishing a statement saying it will be able to meet optional debt payments.
Standard & Poor’s downgraded Deutsche Bank’s riskiest debt last week on concerns potential losses could restrict the bank’s ability to make payments. Tier 1 notes were lowered to B+, four levels below investment grade.
Moody’s cut its rating on Deutsche Bank’s long-term debt to Baa1, the third-lowest investment grade, last month.