According to The Wall Street Journal, Deutsche Bank AG is following in Citigroup Inc.'s steps and shopping as much as $20 billion in LBO debt to private equity firms at a loss. The bank is reportedly in negotiations with Blackstone Group LP, Apollo Management LP, TPG and Sankaty Advisors, the debt-investing affiliate of Bain Capital LLC. Deutsche Bank is likely attempting to reduce the $55 billion of loans on its balance sheet prior to its earning announcement on April 29, leaving it a tight window that works to the advantage of the debt buyers.
Citigroup and Deutsche Bank join the ranks of Goldman, Sachs & Co., Lehman Brothers Inc. and Credit Suisse Group as "motivated sellers" of leveraged debt. Should these banks start getting major portions of leveraged debt off their books, it could send all of the other banks scrambling to do the same, driving the prices of the debt even lower. With debt markets fairly frozen, leveraged debt has been selling at a steep discount of around 90 cents on the dollar, according to MarketWatch data. - George White
See story from The Wall Street Journal
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See story about debt markets from TheDeal.com
Comments
Creative move.