Why Deutsche Bank AG (USA) (NYSE:DB) Shares Are Trading Lower In Pre-Market?

Why Deutsche Bank AG (USA) (NYSE:DB) Shares Are Trading Lower In Pre-Market?

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Deutsche Bank AG (USA) (NYSE:DB) shares are trading lower in the pre-market trading on Monday after the company announced its rights issue at a price 35 percent discount to Friday’s trading price. The company is planning to issue 687.5 million shares at Euro 11.65 a share through rights issue raising Euro eight billion. The pricing appears to be in line with the expectations.

Deutsche Bank indicated that investors could invest in its rights issue, which is the ratio of 2:1, will commence March 21and would run until April 6. Its CEO, John Cryan, commented that a solid capital base is the need of the hour to succeed in future endeavors.

According to a Bloomberg report, this is the fourth capital infusion since 2010 as far as the Germany bank is concerned.  Interestingly, the CEO reversed his decision to tap its shareholders though he was not favor of it initially.

The company indicated that the current fund raising move is fully underwritten with Euros 11.65 a share by banks such as Goldman Sachs Group Inc, HSBC Holdings plc, Morgan Stanely, Credit Suisse Group, Barclays Plc, and UnitCredit SpA. China-based HNA Group is keen to lift its stake in the company by subscribing the rights issue fully.

In pre-market trading on Monday, the stock edged down 1.68 percent at time of writing this.