Deutsche Bank Eyes Private Equity Help in U.S. Settlement

  • U.S. mortgage settlement included $4.1 billion consumer relief
  • Bank looking to make loans to PE funds buying distressed loans

Deutsche Bank AG is supposed to give relief to subprime mortgage borrowers as part of a $7.2 billion settlement with the U.S. government. It is considering an unusual approach to meeting that requirement: lending money to private equity firms and hedge funds.

Germany’s biggest bank, dogged last year by questions about its capital levels, is exploring ways to avoid using its balance sheet to buy soured mortgages that it can partially forgive, according to a person with knowledge of the matter. One option it’s reviewing is to instead lend to firms like Lone Star Funds, which specialize in buying bad mortgages from government auctions and lowering consumers’ obligations. Amanda Williams, a spokeswoman for Deutsche Bank, declined to comment…

Deutsche Bank Eyes Private Equity Help in U.S. Settlement

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