Deutsche Bank Suspends Exchange-Traded Note Issuance Until April
Deutsche Bank AG (DB) is suspending offerings of new shares for 26 exchange-traded notes until it updates financial statements after an April shareholder meeting.
Issuance will end after the close of trading March 29, then is expected to resume after the April 11 meeting, Germany’s biggest lender said in a statement yesterday. The offerings are ceasing after the bank said Feb. 26 it would postpone registering a form called a 20-F with the U.S. Securities and Exchange Commission that’s needed to issue public debt securities. The filing allows foreign companies to offer new debt, including exchange-traded notes and structured notes.
Foreign issuers’ audited financial statements have to be updated every 15 months, and they would “not be able to access the public markets in the U.S.” until updated financial statements are on file, Robert Treuhold, a partner at Shearman & Sterling LLP in New York, said in a telephone interview. Deutsche Bank’s last 20-F includes audited statements for the year ended Dec. 31, 2011.
Private offerings would not be affected, Treuhold said.
The April 11 meeting is scheduled to “confirm the contested resolutions” of its 2012 annual general meeting, which included resolutions related to the election of an auditor, according the statement last month.
Pholida Phengsomphone, a spokeswoman for the bank, declined to comment beyond the two statements.
ETNs already issued by the lender will continue to trade, according to yesterday’s statement.
Deutsche Bank is the 9th largest U.S. structured notes issuer this year, selling $402.4 million of the securities this year, according to data compiled by Bloomberg. The issuer’s largest ETN by assets is the PowerShares (DGP) DB Gold Double Long ETN, with about $369.1 million in assets as of noon.
Issuers usually close structured note offerings at the end of each month, Bloomberg data show.
Banks create structured notes by packaging debt with derivatives to offer customized bets to retail investors while earning fees and raising money. Derivatives are contracts whose value is derived from stocks, bonds, commodities and currencies, or events such as changes in interest rates or the weather.
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