- Deutsche Bank once considered restructuring $US340 million in loans to the Trump Organisation over fears that President Donald Trump’s company might default while he was in office, Bloomberg reported Wednesday.
- According to the report, the bank considered extending loans due to be paid in 2023 and 2024, a time frame that would overlap with Trump’s presidency if he were to win a second term.
- Bloomberg said the bank’s executive board was “leery of the public relations disaster they would face if they went after the assets of a sitting president.”
- The Trump Organisation denied that it was at risk of defaulting. Trump’s son Eric, an executive at the company, described the story as “complete nonsense.”
- Deutsche Bank declined to comment to Business Insider.
A new report says that Deutsche Bank, the biggest bank in Germany, once considered rewriting the terms of a $US340 million package of loans to the Trump Organisation, fearing the nightmare scenario of having to pursue a sitting US president for cash were his company to default on its obligations.
According to a story published by Bloomberg on Wednesday, the bank discussed extending repayment dates on the loans until at least 2025, when President Donald Trump would exit office should he win reelection in 2020. Bloomberg said its sources for the story were people familiar with the internal discussions.
After the story published, the Trump Organisation denied that it was at risk of defaulting. Trump’s son Eric, who is managing Trump’s business affairs while he is in office, called the story “complete nonsense.”
According to Bloomberg, the move was discussed to ensure that the loans could not be defaulted on while Trump was in the White House. The bank’s executive board, Bloomberg reports, was “leery of the public relations disaster they would face if they went after the assets of a sitting president.”
Bloomberg said Deutsche Bank ultimately decided not to restructure the loans but did decide to avoid doing new business with Trump during his presidency.
Deutsche Bank declined to comment when contacted by Business Insider.
In an email to Bloomberg, Eric Trump, who is an executive vice president at the Trump Organisation, defended the strength of the business. “This story is complete nonsense,” he wrote.
“We are one of the most under-leveraged real estate companies in the country,” he said. “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.”
Deutsche Bank has a long, complicated history with Trump and his business ventures. For example, earlier this month The New York Times reported that during the 2016 election Deutsche Bank refused Trump an expansion on a loan to finance work on his golf course in Turnberry, Scotland.
According to The Wall Street Journal, the bank also tried to jettison a $US600 million loan it made in 2016 to VTB Group, a Russian state-owned bank, amid questions over Russia’s meddling in the 2016 election.
Deutsche Bank’s shares have fallen close to 50% over the past 12 months – spurred by two raids on the bank by regulators.
Business Insider Emails & Alerts
Site highlights each day to your inbox.