Deutsche Bank loan issue overshadowed by new agreements
According to Deutsche Bank co-CEO Juergen Fitschen, in an opinion piece in Germany's Boersen Zeitung, said German companies need to diversify their funding sources as the new rules implementation would make it harder for banks to give out loans to the market.
The said op-ed piece was published in the Saturday edition of the newspaper. Fitschen said, "Companies need to prepare for greater uncertainty when it comes to the availability of bank loans and should strengthen their resilience."
The intense pressure for banks to cut back on the size of their balance sheets as well as the need to set aside more capital for possible bad bank debts would mean corporations should utilize capital instruments. These include share and bond issuances to raise funds according to the Deutsche Bank executive.
Despite such pronouncements, just two days ago, Bulgaria had signed a loan agreement with Deutsche Bank to raise EUR360 million or USD487 million in the so-called Schuldschein loans. These kinds of loans would help in debt servicing as well as increase in the country's fiscal reserve ratio.
The agreement is still to be ratified by the Bulgarian Parliament. It would enable the country's central bank to tap credit lines of different volumes and durations from institutional investors. This was confirmed by the country's Finance Ministry through an emailed statement.
Shuldschein loans are promissory notes that are issued privately under German law.
Another firm, Canadian Solar, was able to sign a loan agreement with the bank worth CAD104 million or USD99.5 million loan. The said credit facility would be used to fund short term construction financing for a number of projects located in and around Ontario.
According to Canadian Solar chairman and CEO Shawn Qu, "This is the second construction loan package we have signed with Deutsche Banl. We thank Deutsche Bank for its continued partnershop, which underscores the strength of Tier one position in the solar industry and our prospects for profitable growth. The support of global financial like Deutsche Bank, allows us to expand our actionable pipeline of the quality products which our investors would like to acquire."