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Report: Deutsche Bank Feared Trump Would Default On Loans

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Report: Deutsche Bank Feared Trump Would Default On Loans

The 2016 election put such a strain on the Trump Organization that Deutsche Bank AG (NYSE: DB) reportedly feared loan default.

To avoid a PR mess, bank managers considered extending maturities on President Donald Trump’s $340 million loans until the end of his potential second term in office, according to Bloomberg.

In the end, Deutsche Bank determined not to restructure the financing but resolved not to do new business with Trump during his presidency.

Why It’s Important

Deutsche Bank assured its discussions did not reflect concerns about the president’s creditworthiness. Management merely feared the reputational damage that comes with pursuing the assets of a sitting president.

Still, this isn’t the bank’s first concern about Trump’s payback capacity. The president’s long-time lender denied a loan for a Scottish golf course in 2016.

Eric Trump, an executive vice president of the Trump Organization, nonetheless defended the entity’s financial status.

“This story is complete nonsense,” he told Bloomberg. “We are one of the most under-leveraged real estate companies in the country. Virtually all of our assets are owned free and clear, and the very few that do have mortgages are a small fraction relative to the value of the asset. These are traditional loans, no different than any other real estate developer would carry as part of a comparable portfolio.”

The Trump Organization loans mature in 2023 and 2024.

Related Links:

Experts Break Down What To Expect From Politics In 2019

What Finance Firms Spend On Lobbying To Influence Trump

Photo by Emily Elconin.

Posted-In: Bloomberg Donald Trump Eric TrumpNews Rumors Politics Media General Best of Benzinga

 

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