Bond Market News

Deutsche Bank was upgraded to A1 from A2 by Moody’s reflecting its progress towards meeting medium-term targets and showing relatively modest but sustained profitability. The German lender’s reduced expense base is said to be a positive factor in allowing its to safeguard operating leverage when inflation rises thus defend its earnings strength. The bank’s core lending businesses is also set to benefit thanks to the larger backdrop of interest rate hikes. Moody’s said that Deutsche Bank’s reduced reliance on market funding and high quality deposit base and their assessment of the its “prudent and well controlled risk appetite” will help it maintain a relatively stable asset quality through the cycle. The rating agency further added that Deutsche Bank’s leverage ratio has improved, has solid liquidity metrics and an improved capital profile.

Deutsche Bank’s USD 7.5% Perp was trading flat at 84.4 cents on the dollar, yielding 15.31%.