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Commerzbank set to raise €1bn in bond-share swap
GERMAN lender Commerzbank has finally bowed to the inevitable and announced €1bn (£848m) capital-raising to plug a hole so that it can comply with EU regulations.
The capital-raising will be achieved by offering shares in return for chunks of the bank’s junior subordinated debt, which have fallen sharply in value and now trade at a discount. The bank will issue 511m shares as part of the deal, which is being executed by Goldman Sachs.
Commerzbank also announced its full-year results, showing a €846m fall in full-year pre-tax profits to €507m.
Its asset-based finance division booked a staggering €3.9bn loss, though its investment bank, the corporates and markets division, made €583m.