Deutsche Bank is considering buying back some of its bonds amid concerns that the bank will struggle to make payments on its riskiest debt. The shares jumped.
Bloomberg News reports that while the bank has ample cash to make the purchases, no decision has been made and a buyback may yet be deemed unattractive, a person with knowledge of the matter said, asking not to be identified because the talks are private.
Such a move would focus on senior bonds and probably wouldn’t include the firm’s riskiest debt, known as CoCos, the Financial Times reported Tuesday. Renee Calabro, a spokeswoman for the bank, declined to comment.
Deutsche Bank co-Chief Executive Officer John Cryan has been seeking to reassure investors and staff that the bank is 'rock solid' after the shares erased almost $2.3bn of the company’s market value on Monday. While the lender said on the same day that it has more-than-sufficient means to pay coupons on its riskiest debt both this year and next, the statement did little to reverse a selloff in credit markets.
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