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Deutsche Bank AG Message Board

  • foreverwhiteroses foreverwhiteroses Jan 22, 2009 1:21 PM Flag

    Deutsche Bank Contingent Capital Trusts

    Doesn't look like this is a very active board, but, does anyone here follow the securities of the Capital Trusts? Symbols = DTK and DKT. Seems tough to understand the mechanics of these, but they are ultimately guaranteed by DB. Still rated AA/A- and supposedly not on credit watch (yet?), but they now have current yields exceeding 14%! What's with that? Are there real risks these divvy's don't get paid? Can you sleep at night counting on these preferred divvy's?

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    • Notes: October 10, 2008 -- Deutsche Bank has elected to qualify the following Contingent Capital transactions as Tier 1 capital: Deutsche Bank Contingent Capital Trust V, USD 1.265bn, (ISIN: US25150L1089). The effect of such qualification is that distributions on the securities will be made on a non-cumulative rather than cumulative basis from the current payment period onwards and that the securities will rank pari passu with Deutsche Bank's other hybrid Tier 1 securities. Distributions will continue to be paid at the same rate, namely 8.00% and 8.05% respectively, post qualification. The rationale for the qualification is to further strengthen Deutsche Bank's capital base.

      Can't understand prospectus,any idea what "other Tier 1 hybrid securities" means relative to DB?

      Is this cause for dip on 10/10.?

    • In order for a company to suspend a preferred dividend, the common must be suspended first. Also if a company suspends the preferred dividend they are committing a financial death wish since no one will invest in the future. Good site for answers try (www.quantumonline.com). I follow dkt & dtk but have not pulled the trigger yet. dkt pays $2.0125/yr % dtk pays $1.90/yr. Both are callable in the future at $25.

      • 2 Replies to windwalker184
      • DB IS THE MOST SOLID among many banks in the world. It dropped from 120 euros to 20 euros..It is a safe buy between 20-30 euros. Next week Alianz will report. Commerze bank reported large quarterly loss today! Integration of Dresdner into commerze bank is smooth according to plan.
        All of them have influence on DB. Common still paying dividends, so are preferreds..DTK DKT etc are great too..

      • Guess with the announcement of a recommended continued but reduced common divvy, we're looking OK for this quarter on DKT and DTK. Quantumonline is what led me to these in the first place.. So I can blame them for my being down 30%! :) Still, in reading the detail in the prospectus for these, it's still concerning that there's language in there the seems to imply they might be able to not pay the dividend under circumstance of not making money.... Agree with you completely, though - no way that should happen if they pay a common divvy.

    • Just bought some DKT, just a trade as I think this thing heads back near 20 once things settle down.

      For the record I am a bagholder of IDG @ 25 thanks to my broker.

      It also keeps paying the dividend, but I do not see it ever reaching 25 again.

      • 2 Replies to kent53150
      • IDG has a coupon of 7 3/8%. Within 3 years it will either be at $25 again, or near $0. It just depends on how the crunch plays out. IDG is selling for about $10, as are the DB pfds. The market is saying that there is < 50% chance of survival for ING and DB.

      • Always nice to hear from someone willing to call themselves a bagholder instead of from bears and bashers referring to current shareholders as that (even though those of us who are apparently here on this board ARE!). Sorry to hear about your bagholder status on IDG, but welcome to the club.

        As far as DKT, I'd be curious as to why you decided to buy it today instead of DTK as, to me, DTK has been the cheaper of the two practically identical securities today... What difference is there between the two other than current yield? Today, practically all day, current yield has been higher on DTK. In any event, my son is a chartist much moreso than I and he agrees with your purchase timing.... believes we're at major support areas right now, so at a critical point.... If it bounces, and we're all looking for that to happen, then return to the high teens should be easy... If not, I've got to believe the divvy will be proven to be in jeopardy. Anyone know when the Feb 20 quarterly dividend announcement should come? Same day as the DB earnings report? Anyone have an anticipated day for that?

    • Good question. The fixed income "specialist" at Schwab sold me 1000 shares of this klunker (DTK) about a year ago when it was issued at $25 per share. So far it has paid its dividend and I suppose it will until it is forced to borrow money from the German government and they tell them "no more dividends."

      • 1 Reply to jimie14
      • Well, at least you can blame your move on your broker! I did my own research, thought I knew what I was buying and presto! I'm down 31% in two weeks! Re reading the prospectus, it's nearly impossible to actually understand this thing with the Trust, the Company, the preferred, the preferred trust, etc., etc., etc. And then there's the contingencies whereby the dividends are NOT cumulative if a choice is made to determine this to be Tier 1 capital and are not necessarily payable if the bank doesn't make money.... So how does that jibe with the DB guarantee? I should have either studied harder or walked away....Now with divvy yield = 15% at close on DTK, who knows what you're supposed to do? It just seems to be a better buy than sell.... "Famous Last Words."

 
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