Commerzbank mulls state-backed bond issue
Germany's second biggest bank, Commerzbank, may raise fresh funds via what would be the first government-backed German bond issue within the framework of a banking sector rescue package, a spokeswoman told AFP on Tuesday.
"Commerzbank is considering a bond issue" backed by government guarantees, she said, before adding that the bank had decided "neither the moment, nor the volume nor the duration," of such an operation.
The Financial Times Deutschland newspaper reported that bonds could be issued for a total value of between €1 billion and €2 billion ($1.34 billion $2.68 billion) and that they could be launched this week.
The report said the funds raised might be used to finance the purchase of Dresdner Bank from the insurance group Allianz but a financial source told AFP that any bond issue would be "independent" of the Dresdner acquisition.
Worth €5.1 billion, the takeover of Dresdner would be finalised "in January 2009," the bank spokeswoman said.
Commerzbank has applied for state loan guarantees worth a total €15 billion and a state capital injection of €8.2 billion to help it cope with the global financial crisis. Since it applied for the state aid, "the situation has seriously deteriorated," the newspaper quoted a source close to the matter as saying.
Besides Commerzbank, regional state-owned German banks and another private groups have also obtained state guarantees for possible bond issues.
HSH Nordbank plans such an operation next week and southern peer BayernLB is preparing a similar operation, a spokesman told AFP on Tuesday. The now private business lender IKB is also mulling a bond issue backed by state guarantees, the FTD said.
Commerzbank and Allianz are also negotiating together with the German banking sector stability fund Soffin for public aid for Dresdner Bank, which was hit hard by the international financial crisis, the business daily Handelsblatt said on Tuesday. A Soffin spokesperson declined to comment when contacted by AFP.
In late Frankfurt trade, shares in Commerzbank were down 2.29 percent to €6.40 while the DAX index of leading shares showed a gain of 0.97 percent overall. Allianz was off by 4.90 percent at €73.16.
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"Commerzbank is considering a bond issue" backed by government guarantees, she said, before adding that the bank had decided "neither the moment, nor the volume nor the duration," of such an operation.
The Financial Times Deutschland newspaper reported that bonds could be issued for a total value of between €1 billion and €2 billion ($1.34 billion $2.68 billion) and that they could be launched this week.
The report said the funds raised might be used to finance the purchase of Dresdner Bank from the insurance group Allianz but a financial source told AFP that any bond issue would be "independent" of the Dresdner acquisition.
Worth €5.1 billion, the takeover of Dresdner would be finalised "in January 2009," the bank spokeswoman said.
Commerzbank has applied for state loan guarantees worth a total €15 billion and a state capital injection of €8.2 billion to help it cope with the global financial crisis. Since it applied for the state aid, "the situation has seriously deteriorated," the newspaper quoted a source close to the matter as saying.
Besides Commerzbank, regional state-owned German banks and another private groups have also obtained state guarantees for possible bond issues.
HSH Nordbank plans such an operation next week and southern peer BayernLB is preparing a similar operation, a spokesman told AFP on Tuesday. The now private business lender IKB is also mulling a bond issue backed by state guarantees, the FTD said.
Commerzbank and Allianz are also negotiating together with the German banking sector stability fund Soffin for public aid for Dresdner Bank, which was hit hard by the international financial crisis, the business daily Handelsblatt said on Tuesday. A Soffin spokesperson declined to comment when contacted by AFP.
In late Frankfurt trade, shares in Commerzbank were down 2.29 percent to €6.40 while the DAX index of leading shares showed a gain of 0.97 percent overall. Allianz was off by 4.90 percent at €73.16.
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