Zorba
Bos 4 Mod
Commerz Bank
Magari toppo clamorosamente, ma ho la sensazione che il gruppo CommerzBank riprenderà presto a pagare i coupon...
14-Apr-10
09:06
Commerzbank's trust preferred holders hire Brown Rudnick to push for coupon payments
Story:
Holders of Commerzbank's (CMZB) GBP 800m 5.905% and EUR 1bn 5.012% trust
preferred securities have hired Brown Rudnick to sue the company for annual
coupon payments that were due April 12, according to a source familiar and a
trust preferred holder.
The trust preferred group currently has support from roughly 30% of the
aggregate holders of the two securities, said the source familiar and the
trust preferred holder. Before the group can direct the trust preferred's trustee,
Bank of New York, to initiate a lawsuit against Commerzbank, it needs to
represent at least 50% of each class, said the two sources. Commerzbank
Capital, the trust that issued the securities, is a Delaware-based company.
Officials with Commerzbank, Brown Rudnick, and Bank of New York did not
return calls for comment.
CMZB's EUR 1bn 5.012% trust preferred securities due 2049 were quoted at 65
today, while the GBP 800m 5.905% trust preferred securities were quoted at
64.5, according to the trust preferred holder.
Since the coupon payments are optional if the bank reports an annual net
loss like it did in FY09, CMZB announced in March that it would not pay coupons
on the Tier 1 5.012% and 5.905% trust securities. In addition, the company said
it would not pay coupons on other Tier 1 securities ahead of their 12 April
coupons, according to the company press release.
However, holders of the 5.012% and 5.905% securities are now crying foul
over CMZB's decision to effectively allow other trust preferred security holders
to skirt the provision by elevating them to Tier 2 status, said the trust
preferred holder and two analysts.
They claim CMZB elevated a privately placed JPY bond and a Dresdner Funding
USD 1bn 8.151% trust preferred security to Tier 2, or "must pay" status in March
2010. The elevation of the Dresdner security prompted S&P to upgrade it to
A- from CCC shortly afterwards.
Without the elevation, the bank's decision to make the 8.151%'s coupon
payment would have forced it to make coupon payments on all other Tier 1 optional
pay securities, including the 5.012% and 5.905% bonds, said the two analysts.
The Brown Rudnick represented group argues that Commerzbank is now obligated to
pay its coupons since they are entitled to the same treatment, said the bond
holder and the source familiar referencing the bond indenture.
Further complicating the situation, CMZB was bailed out in 2008 by
Sonderfonds Finanzmarktstabilisierung (SoFFin), the German equivalent of TARP, in the
fall of 2008, according to a company press release. SoFFin invested EUR 1.8bn
into the bank for a 25% plus 1 share stake and loaned it EUR 16.4bn at 9%
interest.
As part of the deal, CMZB cannot make acquisitions until 2012. It must
dispose of Eurohypo, and must reduce its balance sheet to EUR 600bn from EUR 1.1tn,
including the Eurohypo disposition, according to a company press release.
Furthermore, CMZB can't pay optional coupons or dividends in 2010, and can
do so in 2011 only if it is profitable in 2010.
Because SoFFin's taxpayer funded EUR 16.4bn loan will not receive a coupon
in 2010, paying coupons to institutional trust preferred security holders could
be politically troublesome, one analyst pointed out.
by Tibita Kaneene, Seth Brumby, and Irene Chapple
Source:
Debtwire
Magari toppo clamorosamente, ma ho la sensazione che il gruppo CommerzBank riprenderà presto a pagare i coupon...
14-Apr-10
09:06
Commerzbank's trust preferred holders hire Brown Rudnick to push for coupon payments
Story:
Holders of Commerzbank's (CMZB) GBP 800m 5.905% and EUR 1bn 5.012% trust
preferred securities have hired Brown Rudnick to sue the company for annual
coupon payments that were due April 12, according to a source familiar and a
trust preferred holder.
The trust preferred group currently has support from roughly 30% of the
aggregate holders of the two securities, said the source familiar and the
trust preferred holder. Before the group can direct the trust preferred's trustee,
Bank of New York, to initiate a lawsuit against Commerzbank, it needs to
represent at least 50% of each class, said the two sources. Commerzbank
Capital, the trust that issued the securities, is a Delaware-based company.
Officials with Commerzbank, Brown Rudnick, and Bank of New York did not
return calls for comment.
CMZB's EUR 1bn 5.012% trust preferred securities due 2049 were quoted at 65
today, while the GBP 800m 5.905% trust preferred securities were quoted at
64.5, according to the trust preferred holder.
Since the coupon payments are optional if the bank reports an annual net
loss like it did in FY09, CMZB announced in March that it would not pay coupons
on the Tier 1 5.012% and 5.905% trust securities. In addition, the company said
it would not pay coupons on other Tier 1 securities ahead of their 12 April
coupons, according to the company press release.
However, holders of the 5.012% and 5.905% securities are now crying foul
over CMZB's decision to effectively allow other trust preferred security holders
to skirt the provision by elevating them to Tier 2 status, said the trust
preferred holder and two analysts.
They claim CMZB elevated a privately placed JPY bond and a Dresdner Funding
USD 1bn 8.151% trust preferred security to Tier 2, or "must pay" status in March
2010. The elevation of the Dresdner security prompted S&P to upgrade it to
A- from CCC shortly afterwards.
Without the elevation, the bank's decision to make the 8.151%'s coupon
payment would have forced it to make coupon payments on all other Tier 1 optional
pay securities, including the 5.012% and 5.905% bonds, said the two analysts.
The Brown Rudnick represented group argues that Commerzbank is now obligated to
pay its coupons since they are entitled to the same treatment, said the bond
holder and the source familiar referencing the bond indenture.
Further complicating the situation, CMZB was bailed out in 2008 by
Sonderfonds Finanzmarktstabilisierung (SoFFin), the German equivalent of TARP, in the
fall of 2008, according to a company press release. SoFFin invested EUR 1.8bn
into the bank for a 25% plus 1 share stake and loaned it EUR 16.4bn at 9%
interest.
As part of the deal, CMZB cannot make acquisitions until 2012. It must
dispose of Eurohypo, and must reduce its balance sheet to EUR 600bn from EUR 1.1tn,
including the Eurohypo disposition, according to a company press release.
Furthermore, CMZB can't pay optional coupons or dividends in 2010, and can
do so in 2011 only if it is profitable in 2010.
Because SoFFin's taxpayer funded EUR 16.4bn loan will not receive a coupon
in 2010, paying coupons to institutional trust preferred security holders could
be politically troublesome, one analyst pointed out.
by Tibita Kaneene, Seth Brumby, and Irene Chapple
Source:
Debtwire
