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Fitch Withdraws 7 Deutsche Bank Issue Ratings; Adds 'emr' to 4 Others
June 16, 2017 / 1:03 PM / 3 months ago

Fitch Withdraws 7 Deutsche Bank Issue Ratings; Adds 'emr' to 4 Others

(The following statement was released by the rating agency) LONDON, June 16 (Fitch) Fitch Ratings has withdrawn ratings on seven Deutsche Bank AG issues and revised ratings on a further four to assign 'emr' suffixes following discovery of an error in the application of criteria with respect to these issues. The rating actions are as follows: Suffixes of 'emr' have been assigned to ratings of issues with ISIN numbers XS0355551291, XS0347741455, XS0371238469 and XS0315425701 to reflect embedded market risk in determination of their coupon amounts. Ratings on these four issues were upgraded to 'A' from 'A-' in a separate rating action today along with ratings of other structured notes issued by Deutsche Bank AG that do not require 'emr' suffixes under Fitch's Global Bank Rating Criteria. Issues with ISIN numbers XS0313629387, XS0313979527, XS0208740315, XS0440245511, XS0219357430, XS0231649061 and XS0320166779 have been withdrawn because they are not principal-protected and, therefore, should not be rated according to Fitch's Global Bank Rating Criteria with respect to ratings of structured notes. The 11 issues were of small amounts (all but one was for USD50 million or less) and none were benchmark issues. This type of issue is typically in response to reverse enquiry (requested by private or institutional investors as bespoke products). KEY RATING DRIVERS During a review of Deutsche Bank's rated structured notes with respect to the ranking of these in insolvency following a change in German law, Fitch identified that its changes to criteria in 2010 and 2011 with respect to rating structured notes had not been applied to these issue ratings, all of which were initially assigned prior to 2010. The applicable criteria were revised in August 2010 to adopt 'emr' suffixes and in August 2011 to no longer assign ratings to issues that were not principal-protected. RATING SENSITIVITIES Ratings of issues with ISIN numbers XS0355551291, XS0347741455, XS0371238469 and XS0315425701 are primarily sensitive to (1) changes in Deutsche Bank AG's IDRs, (2) our assessment of the volume of subordinated and non-preferred senior debt buffers relative to the recapitalisation amount likely to be needed to restore viability and prevent default on preferred obligations, (3) subsequent changes to the resolution regime or Fitch's expectation of how resolution would be implemented in practice, and (4) subsequent changes to the resolution regime altering the hierarchy of the various instruments. The required amount of subordinated and senior vanilla debt buffers is sensitive to increases in Deutsche Bank AG's capital requirements, in particular of the individual pillar 2 regulatory requirements, as we assume that these determine the level to which the bank would have to be recapitalised upon resolution. Furthermore, the ratings are sensitive to Fitch's assumptions regarding the individual points of non-viability at which the regulator is likely to require a recapitalisation by way of bail-in of junior and standard senior instruments. We expect the European Commission's (EC) proposal to amend Directive 2014/59/EU by introducing a new class of non-preferred senior debt, if and when implemented in German law, to leave the subordination of outstanding non-preferred senior debt intact. However, the EC's proposal could trigger a downgrade of the ratings of issues with ISIN numbers XS0355551291, XS0347741455, XS0371238469 and XS0315425701 if its transposition into German law reduces the buffer of junior and non-preferred senior debt or modifies the ranking of senior instruments. Contact: Primary Analyst Bridget Gandy Managing Director +44 20 3530 1095 Fitch Ratings Limited 30 North Colonnade London E14 5GN Secondary Analyst Ioana Sima Associate Director +44 20 3530 1736 Committee Chairperson Christian Scarafia Senior Director +44 20 3530 1012 Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria Global Bank Rating Criteria (pub. 25 Nov 2016) here Additional Disclosures Solicitation Status here#solicitation Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE here. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

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