Trump Has $340 Million of Debt Linked to Powell's Rate Decisions
Trump owes Deutsche Bank AG about $340 million of debt. But how is that linked to Powell?
(Bloomberg) -- President Donald Trump owes Deutsche Bank AG about $340 million of debt with interest rates that will rise or fall depending on the future policies of Jerome Powell, the new Federal Reserve chair Trump nominated on Thursday.
While many of his Trump Organization’s largest loans have fixed interest rates, others are tied to the prime rate or Libor, the London interbank offered rate. Those borrowing costs fluctuate with the federal funds rate set by the central bank. Higher rates would make Trump’s loans more expensive.
If Trump were to pay interest based on the current prime rate of 4.25 percent, the bill would come to about $16.7 million in annual borrowing costs on his floating-rate Deutsche Bank loans, according to data compiled by Bloomberg. Each quarter-point rise in the prime rate would increase the cost of those payments by $850,000 a year, the data show.
Here’s a list of Trump’s floating-rate Deutsche Bank loans:
To contact the reporter on this story: Caleb Melby in New York at cmelby@bloomberg.net.
To contact the editors responsible for this story: Alicia Ritcey at aritcey@bloomberg.net, Robert Friedman, Alan Goldstein
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