Remember this?
This is a chart we have been presenting since last year, updated periodically, showing just how vast Deutsche Bank’s potential undercapitalization is/would be if, as in the case of Lehman, for some reason gross exposure suddenly became net, and there was counterparty failure. It is also the reason why we predicted as recently as last month when Deutsche announced it would issue another €1.5 billion in Tier 1 capital, that the German megabank’s capital raising is far from over.
Sure enough, just out from Bloomberg:
- Deutsche Bank preparing a capital increase, aims to raise EU8 billion through new shares by end of June, Handelsblatt says, citing unidentified people in the finance industry.
- Deutsche Bank likely to get new single investor
- Negotiations ongoing, haven’t been made final
- Deutsche Bank declined to comment: Handelsblatt
Who will buy the shares?
- Deutsche Bank new investor may hold 5%-8% of shares
Belgium? And the punchline: Bank’s new shares may be sold with 25%-30% discount.
In other words, it is liquidity scramble time, and the bank is willing to give anyone with deep enough pockets a 30% discount to market price just to get some additional short-term funding.
Why the scramble, especially if Europe is, as eurocrats, lying central bankers and conflicted pseudo-intellectuals like to claim “fixed?” We can’t wait to find out.
Source: Handelsblatt
via Zero Hedge http://ift.tt/1t62ISa Tyler Durden