Deutsche Bank Is Allowed Back Into the High-Risk Club
After a six-year hiatus, the German lender is going into the deep end of fixed-income risk. That’s a vote of confidence — of sorts.
Early doubts.
Photographer: Krisztian Bocsi/BloombergDeutsche Bank AG is back — at least if its ability to sell the riskiest type of debt is a yardstick.
After a six-year hiatus marked by a flirtation with collapse, billions of euros of losses, multiple management changes and its biggest restructuring in decades, Deutsche is going into the deep end of fixed-income risk: a benchmark perpetual bond (known as an AT1, or CoCo bond). Investors’ insatiable hunt for yield and the lender’s own green shoots of recovery have allowed the former basket case of European banking to tap a market that was all but off-limits for years. The German behemoth appears to be exiting intensive care, though a full recovery is not a given.