Banks miffed at Deutsche's fees
Fees in Latin American debt capital markets have been coming down for years, and Deutsche Bank usually gets blamed, fairly or not, more than any other house. Last month it justified its reputation for lowballing with an alleged bid of just one basis point to lead manage a $300 million 10-year El Salvador deal. Competitors were miffed, to say the least, but Deutsche won the mandate.
But then El Salvador decided to issue a 30-year note instead. The bond came to market, was upsized to $375 million, and Deutsche got its fee – of 23bp. The 1bp bid was just on a 10-year deal: 30-year bonds cost 23 times more, it would seem.
Suddenly, Deutsche's fees went up from an initial expected level of $30,000 to a final amount of $862,500 – something much more respectable. Deutsche's competitors, of course, remained miffed.