Friday, August 8, 2025

Is Deutsche Bank Next? Shares Plummet As Default Swaps Surge To Record High

Deutsche Bank’s (NYSE: DB) shares have tumbled 8% in pre-market trading to $8.85 after default swaps on the bank’s euro, senior debt increased to the highest level since they were introduced in 2019, when Germany revised its debt structure to include senior preference notes. Other banks with a high exposure to corporate lending decreased as well, with Commerzbank plunging 9% and Societe Generale losing 7%.

The failure of Silicon Valley Bank and the emergency bailout of Credit Suisse last weekend shook investors and heightened concerns about the banking industry’s overall viability at a time of rising interest rates and increasing inflation.

Credit default swaps on five-year maturities increased to more than 220 basis points before easing back. They were at 210, or 7 basis points higher than the previous day’s close.

Bonds of Additional Tier 1 (AT1) were also under pressure. The yield on the 7.5% dollar AT1 bond was around 22.9%, more than double what it was two weeks ago.

The measures follow yesterday’s losses in US banks, which fell even after US Treasury Secretary Janet Yellen told legislators that regulators would be prepared to take additional steps to protect deposits if necessary.

The Stoxx 600 Banks Index fell 4.4% on Friday, making it Europe’s worst-performing sector.

Separately, a Deutsche Bank tier 2 subordinated bond rose toward face value on Friday after the firm suddenly revealed its intention to redeem the note early.


According to Bloomberg statistics, the notes, which maturity in 2028, had fallen to as low as 90 cents in the aftermath of the Credit Suisse Group AT1 wipe out.

Rival UBS agreed to buy Credit Suisse for 3 billion Swiss francs ($3.2 billion) on Sunday, with Swiss authorities playing a significant role in the deal as nations sought to halt a global banking system contagion.

While price had rebounded in recent days, it was still indicated at around 94, indicating a high likelihood of Deutsche Bank exercising their call option.


Information for this briefing was found via Bloomberg, Seeking Alpha, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Gold/Silver: People Can Still Lose Money In This Bull Market!? | Rick Rule

He Said $300 Silver!? | Peter Krauth

Dollar Will Collapse, Gold and Silver Are the Only Safe Havens | Jim Rogers

Recommended

Nova Scotia Bans Forest Access to Prevent Wildfires

Cardiol Therapeutics Releases Positive Topline Results From Phase II Clinical Trial

Related News

Nigel Farage Claims Bank Accounts Closed Without Explanation, Fears Forced Exit from UK

Nigel Farage, the former leader of the UK Independence Party (UKIP) and prominent Leave campaigner...

Monday, July 3, 2023, 04:22:00 PM

Deutsche Bank Cuts Financing to New Oil Sands and Arctic Region Projects In Further Blow To Oil Industry

The coronavirus-induced oil price crash has caused the industry as a whole to suffer unprecedented...

Tuesday, July 28, 2020, 12:08:00 PM

Banks With Tanks: China Protects Central Bank Branch With Tanks After Declaring Depositors Can’t Withdraw Anymore

Protesting depositors who can’t withdraw their savings for months now have been met with military...

Saturday, July 23, 2022, 05:22:00 PM

Credit Suisse Valuation Plummets to 2008 Levels: Is The Investment Bank About To Go Bankrupt?

While markets and economists are fixated on surging energy prices, the British pound meltdown, and...

Monday, October 3, 2022, 07:19:42 AM

Swiss Regulators Prepare to Fast-Track UBS Takeover of Credit Suisse

Swiss regulators are going to expedite the takeover of troubled Credit Suisse (NYSE: CS) by...

Saturday, March 18, 2023, 06:23:10 PM