Deutsche Bank buyback, Sacyr debt load, Evolution Gaming lock-up expiry

10 February 2016 - 12:00 am UTC

11 February 2016 – The Flash can’t see how the reported “several billion euros” share buyback fundamentally changes anything for Deutsche Bank [ETR:DBK]. The bank’s shares are back down 6% this morning after yesterday’s buyback rumour rebound.

Presumably the theoretical logic behind the buyback is to improve cash flow by reducing the amount of outstanding bonds that require periodic servicing. This would free up cash to service other bonds, in particular the contingent convertible bonds (cocos). The practical logic of the move may be to bolster market sentiment.

The difficulty with the buyback is that senior bonds generally have low coupon rates. Paying them off will save little in the way of cash flow.