Germany’s second largest bank, Commerzbank, is planning to raise nearly €10 billion to help repay government aid, Financial Times reports. The Frankfurt-based bank, which needed €18.2 billion of state capital during the financial crisis and to complete its takeover of Dresdner Bank, may sell equity-like securities followed by a rights issue.
The bank is seeking to repay most of the €16.2 billion of its silent participation notes. The fundraising may be arranged by a group of banks, including Citigroup, DeutscheBank and JP Morgan. The government is expected to convert some of its hybrid debt into equity as part of any deal to maintain its ownership of over 25% of Commerzbank’s shares.
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