Deutsche Bank considers buying back bonds -FT

(Adds bond trading levels)

By Steve Slater and Will Caiger-Smith

NEW YORK, Feb 9 (IFR) - Deutsche Bank (Other OTC: DBAGF - news) is considering buying back several billion euros of its debt in an attempt to shore up the tumbling value of its securities, the Financial Times reported.

The FT said Deutsche Bank is expected to focus its emergency buyback plan on senior bonds, of which it has about 50bn in issue.

The move was unlikely to involve Additional Tier 1 bonds, the paper said, citing people briefed on the plan.

The bank's shares and AT1 bonds have seen a dramatic sell-off in recent days.

A spokesman for Deutsche Bank declined to comment.

Deutsche Bank could generate capital gains by buying back bonds at a discount to their face value. Many banks bought back billions of euros of their bonds following the financial crisis.

"The way their debt is trading it could make a lot of sense for them," said Bill Scapell, director of fixed income at Cohen & Steers.

"They're a well capitalized bank and some of the debt is trading like they're having liquidity problems. They're taking advantage of a misperception in the market."

Deutsche Bank's US$1.6bn 3.7% senior 2024s were seen around 20bp wider on the day at T+330bp, or a dollar price of 91, said one banker.

The bank's US$1.5bn 2025 and 2028 subordinated bonds were 10bp-15bp wider on the day at T+570bp and T+590bp, both equivalent to a dollar price of around 81.

Deutsche Bank co-chief executive John Cryan earlier on Tuesday told staff and investors that the bank was "rock solid" as he sought to halt the sell-off. But its shares fell another 4%, taking their slump this year to more than 40%. (Reporting by Steve Slater and Will Caiger-Smith; editing by Shankar Ramakrishnan)