Commerzbank's Callable Bonds Drop as CFO Said No Need to Redeem
(Bloomberg) -- Commerzbank AG’s junior bonds tumbled after Chief Financial Officer Stephan Engels said he sees no need to buy them back at the first opportunity.
The German lender’s 416 million euros ($462 million) of 6.352 percent notes dropped as much as 8 cents on the euro to a three-year low of 91 cents on Friday, according to data compiled by Bloomberg. The bonds are eligible to be repurchased in June.
“From today’s perspective, I don’t know why I would buy them back,” Engels said in response to reporter’s question about callable securities on a conference call to discuss the bank’s third-quarter earnings on Friday. “We’re very comfortably set up as regards funding at the moment.”
A spokesman for Commerzbank declined to comment on whether Engels’s remarks included the 6.352 percent notes.
Investors are concerned that other banks may follow Standard Chartered Plc by choosing not to repurchase callable subordinated securities. The London-based bank roiled credit markets in Europe this week when it broke with tradition by saying it would extend notes eligible for repurchase in January to save on refinancing costs.