In Historic “Self Bail-In” A German Bank Just Canceled Interest Payments On Two Bonds
by Tyler Durden
ZeroHedge.com
Jun 20, 2017
One year ago, when Deutsche Bank was sliding on concerns about its bad loan book, Germany’s Bremer Landesbank which at the time had €29 billion in assets, saw its bonds plunge overnight when concerns emerged about an imminent failure by the German lender.
Back then the worry was that the bank’s extensive portfolio of nonperforming shipping loans would require either a bailout by a bank, with the name of majority owner NordLB cited, or a state rescue. It was a report by Germany’s Handelsblatt that unleashed the selling, and fear of another European bank failure, after it said that a bailout may not come: “shipping loans have brought Bremer LB into distress and the bank can not survive without government help, but a direct capital injection from Lower Saxony now looks unlikey.” Eventually, the crisis passed after NordLB took full control of Bremer LB last September, with concerns about its viability swept under the rug.
Fast forward to today, when moments ago in a historic development, the German bank again made headlines again after it said it would “strip”, or cancel the interest payment, on its most subordinated debt, impacting two Euro AT1 notes, the first such move by a German bank which effectively amounted to a partial “self-bail in.”
In a statement, the bank said “The Management Board of Bremer Landesbank decided to cancel, at the next Interest Payment Date, all payment of interest on the AT1 Notes forming part of the own funds”
The Rest…HERE
