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Danske Bank to seek 40B kroner bond issuance

Danske Bank A/S will start discussions with investors in the U.S. and Europe over the issuance of senior nonpreferred bonds amounting to 40 billion Danish kroner, the bank's treasury head Christoffer Møllenbach told Bloomberg News.

The securities would account for a large portion of the Danish lender's $12 billion debt issuance plan for 2019, according to the Jan. 7 report. Møllenbach said the bank is aware that debt financing would be costly due to the €200 billion money laundering scandal in which Danske is implicated.

Møllenbach said the bank's total debt issuance for the year would fall on the higher end of a range of between 60 billion kroner and 80 billion kroner.

The Copenhagen-based banking group has tapped BofA Merrill Lynch, Barclays, Goldman Sachs & Co. LLC, JPMorgan Chase & Co. and UBS Investment Bank to arrange the investor meetings, the report said.

Danske is yet to make provisions to cover potential fines arising from its money laundering scandal. Møllenbach said the bank could not provide guidance on potential fines as it does not "have enough visibility and clarity."

Previously, it was estimated that the bank could incur billions in fines.

As of Jan. 4, US$1 was equivalent to 6.55 Danish kroner.