Deutsche Bank AG (DB:US) sold $129.2 million of 14-month notes tied to the Standard & Poor’s 500 Index, the bank’s largest offering in 18 months.
The securities, issued March 27, yield three times the benchmark’s gains to a maximum of 10.9 percent, according to a prospectus filed with the U.S. Securities and Exchange Commission. The notes start losing value when the index declines from its initial level.
The securities cap Deutsche Bank’s largest first-quarter sales period since 2011, with $875 million, according to data compiled by Bloomberg.
Oksana Poltavets, a spokeswoman for Deutsche Bank in New York, declined to comment.
The German lender sold $429.6 million of 18-month notes tied to the Euro Stoxx 50 Index on Sept. 14, 2012, its largest offering since at least January 2010, Bloomberg data show. The notes matured on March 19, before the S&P 500 Index-linked notes were issued.
Deutsche Bank estimated the S&P 500 Index (SPX) notes had a value of 97.2 cents on the dollar at the time of sale, according to the prospectus. Bank of America Corp. distributed the securities for a 2 percent fee.
The S&P 500 Index rose 2.2 percent this year through today.
Banks create structured notes by packaging debt with derivatives to offer customized bets to retail investors while earning fees and raising money. Derivatives are contracts with values derived from stocks, bonds, commodities and currencies, or events such as changes in interest rates or the weather.
To contact the reporter on this story: Kevin Dugan in New York at firstname.lastname@example.org
To contact the editors responsible for this story: Shannon D. Harrington at email@example.com Richard Bedard, John Parry