Πέμπτη, 17 Νοεμβρίου 2016

When Donald Trump Needs a Loan, He Chooses Deutsche Bank


By ANUPREETA DAS
Updated March 20, 2016 1:35 p.m. ET

One of Donald Trump’s closest allies on Wall Street is a now-struggling German bank.

While many big banks have shunned him, Deutsche Bank AG has been a steadfast financial backer of the Republican presidential candidate’s business interests. Since 1998, the bank has led or participated in loans of at least $2.5 billion to companies affiliated with Mr. Trump, according to a Wall Street Journal analysis of public records and people familiar with the matter.

That doesn’t include at least another $1 billion in loan commitments that Deutsche Bank made to Trump-affiliated entities.

The long-standing connection makes Frankfurt-based Deutsche Bank, which has a large U.S. operation and has been grappling with reputational problems and an almost 50% stock-price decline, the financial institution with probably the strongest ties to the controversial New York businessman.

But the relations at times have been rocky. Deutsche Bank’s giant investment-banking unit stopped working with Mr. Trump after an acrimonious legal spat, even as another arm of the company continued to loan him money.

Other Wall Street banks, after doing extensive business with Mr. Trump in the 1980s and 1990s, pulled back in part due to frustration with his business practices but also because he moved away from real-estate projects that required financing, according to bank officials. Citigroup Inc., J.P. Morgan Chase & Co. and Morgan Stanley are among the banks that don’t currently work with him.

At Goldman Sachs Group Inc., bankers “know better than to pitch” a Trump-related deal, said a former Goldman executive. Goldman officials say there is little overlap between its core investment-banking group and Mr. Trump’s businesses.

The lukewarm relations with banks is one reason Mr. Trump’s White House bid hasn’t received much financial support from Wall Street, bankers and fund managers say. The securities and investment industry, which includes Wall Street firms, has donated roughly $19 million toward the campaign of Hillary Clinton, so far, according to the Center for Responsive Politics. Mr. Trump, who is largely self-funded, has received $17,255.

Ivanka Trump, who works with her father at the Trump Organization LLC, which holds the family’s real-estate and other business interests, denied that Wall Street banks are wary of doing business with the family.

“The biggest banking institutions are constantly soliciting us,” Ms. Trump said in an interview. “But we don’t need a lot of financing because we have a great balance sheet and a tremendous amount of cash.”

Deutsche Bank’s relationship with Mr. Trump dates to the 1990s. The bank, eager to expand in the U.S. via commercial-real-estate lending, set out to woo big New York developers such as Mr. Trump and Harry Macklowe.

One of the bank’s first loans to Mr. Trump, in 1998, was $125 million to renovate the office building at 40 Wall Street. More deals soon followed, with the bank agreeing over the next few years to loan or help underwrite bonds worth a total of more than $1.3 billion for Trump entities.


By 2005, Deutsche Bank had emerged as one of Mr. Trump’s leading bankers. That year, the German bank and others lent a Trump entity $640 million to build the 92-story Trump International Hotel and Tower in Chicago. Deutsche Bank officials badly wanted the deal because it came with a $12.5 million fee attached, said a person familiar with the matter.

Mr. Trump charmed the bankers, flying them on his private Boeing 727 jet, according to people who traveled with him.
But when the housing bubble burst, the relationship frayed.

In 2008, Mr. Trump failed to pay $334 million he owed on the Chicago loan because of lackluster sales of the building’s units. He then sued Deutsche Bank. His argument was that the economic crisis constituted a “force majeure”—an unforeseen event such as war or natural disaster—that should excuse the repayment until conditions improved.

His lawyers were inspired to invoke the clause after hearing former Federal Reserve chairman Alan Greenspan describe the crisis as a “once-in-a-century credit tsunami,” according to a person who worked on the case for Mr. Trump.

Mr. Trump also attacked Deutsche Bank’s lending practices and said that as a big bank, it was partially responsible for causing the financial crisis. He sought $3 billion in damages.

Deutsche Bank in turn sued Mr. Trump, saying it was owed $40 million that the businessman had personally guaranteed in case his company was unable to repay the loan.

Deutsche Bank argued that Mr. Trump had a cavalier history toward banks, quoting from his 2007 book, “Think Big And Kick Ass In Business And Life.”

“I figured it was the bank’s problem, not mine,” Mr. Trump wrote, according to the lawsuit. “What the hell did I care? I actually told one bank, ‘I told you you shouldn’t have loaned me that money. I told you that goddamn deal was no good.’”

The court rejected Mr. Trump’s arguments but the suit forced Deutsche Bank to the negotiating table. The two sides agreed to settle their suits out of court in 2009. The following year, they extended the original loan by five years. It was paid off in 2012—with the help of a loan from the German firm’s private bank.

While Deutsche Bank didn’t lose money on the deal, the fracas soured its investment bankers on working with Mr. Trump. “He was persona non grata after that,” said a banker who worked on the deal.

But not everyone within Deutsche Bank wanted to sever the relationship. The company’s private-banking arm, which caters to ultrarich families and individuals, picked up the slack, lending well over $300 million to Trump entities in the following years.

One of those loans, for $125 million, was to finance the purchase of Miami’s Doral Golf Resort and Spa in 2011, which he re-christened Trump National Doral.

Mr. Trump has promised to hold a celebration there if he is elected president.

Write to Anupreeta Das at anupreeta.das@wsj.com

Πηγή:http://www.wsj.com/articles/when-donald-trump-needs-a-loan-he-chooses-deutsche-bank-1458379806

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