3 Reasons to Love Bank Loan

3 Reasons to Love Bank Loans - U.S. News & World Report (blog) Jul 12th 2013, 12:00 There is a sub-sector within the bond market that is getting quite a bit of attention lately: floating rate bond funds. These funds may also be known as senior secured loans, bank loans or leveraged loans. Going forward, I'll refer to them as bank loans just to keep things simple, but given their unique characteristics, it's worth looking at them in more detail. Here are three reasons why bank loans may be a good fit in your portfolio relative to investment grade and high yield bonds: 1. Low interest rate risk. With traditional bonds, investors receive a fixed coupon payment on a set schedule (hence the term "fixed income") and the value of the bond fluctuates as interest rates move. When interest rates go up, the price of bonds fall, and when interest rates fall, bond prices increase. This is at the heart of what interest rate risk is: it's the risk that bond values adversely change due to fluctuating interest rates. That relationship between interest rates and price doesn't exist with bank loans, which is what makes them attractive to investors now. The coupon on bank loans is variable as it resets to the current interest rate every three months keeping its price at or near par. Sure, the price can trade at a premium or a discount before the coupon resets, but overall, bank loan prices are fairly stable despite changes in market rates. 2. High recovery rates. Typically, bank loans are issued by non-investment grade companies, so you can think of them as the floating rate version of high yield. As is the case with any entity that issues a bond, an investor must evaluate the creditworthiness of the borrower and determine two key items: the likelihood of default and the recovery rate in the event of default. It should go without saying that, all else being equal, you want to find a borrower (or an investment) with a low chance of defaulting or make sure you get as much of your investment back as possible if they do. On one side of the bond spectrum you have investment grade with very low probabilities of default. In the corporate world, these issuers are large companies with steady cash flow and little chance of not being able to make their interest payments each month. On the other side you have high yield with much higher rates of default. While bank loans are closer to high yield bonds in terms of credit risk, they have a unique feature which results in much higher recovery rates. Holders of bank loans are the first group of people to get paid if the borrower goes bankrupt because the loan is backed by company assets. Bank loans get an extra layer of protection not offered by high yield debt because of their seniority in line to get some of their money back. 3. Less volatile returns. A common way to assess risk is to look at how volatile the returns have been over time using a statistical measure called standard deviation. What you need to keep in mind is that the larger the standard deviation of returns, the higher the volatility of the investment and the greater the chance that you could suffer a big loss. Prior to the 2008 financial crisis, the standard deviation of bank loans was 2.3 percent. To put this number into perspective, U.S. stocks have a standard deviation of around 20 percent, high yield has a standard deviation of 8.6 percent and investment grade has a standard deviation of 5.5 percent. In other words, bank loans were an extremely stable asset class. That isn't to say that you couldn't lose money, but you weren't going to suffer any crippling losses. Even if you include returns post-2008, that number only increases to 5.4 percent, which is still slightly below investment grade and well below high yield. Who would have guessed that there was a segment of the fixed income universe that had lower volatility than investment grade? The bottom line: Because of their floating-rate nature, their priority over other investors in recovering potential losses and their relatively stable return profile, bank loans may provide a diversification benefit to a bond portfolio by lowering interest rate risk and volatility. Spencer D. Rand is an Asset Management Associate at Monument Wealth Management, a Registered Investment Advisor located just outside Washington, DC in Alexandria, Va. Spencer is not a registered investment advisor representative. Follow Spencer and the rest of Monument Wealth Management on their blog which can be found on their website, on Twitter @MonumentWealth, and on the Monument Wealth Management Facebook page. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for individual. To determine which investment is appropriate please consult your financial advisor prior to investing. All performance referenced is historical and is not guarantee of future results. All indices are unmanaged and may not be invested into directly.

RBI deputy governor to meet bank CEOs on bad loans on July 16 - Economic Times Jul 12th 2013, 11:42 MUMBAI: The Reserve Bank of India (RBI) will hold a consultative meeting with bankers to consider measures that can be taken to prevent a standard account slipping into bad loan category. RBI deputy governor K C Chakrabarty will meet CEOs of large commercial banks from on July 16 to discuss what bankers say the 'corrective actions that can be taken by banks to curb rise in bad loans.' An account is classified as bad loan if the borrower fails to pay interest or principal or both within 90 days of due date. Sources from the banking industry said that the meeting would focus on large value bad loans and also practices followed by banks in dealing with borrowers in stress. Currently most banks have put in place a mechanism wherein they receive computer-generated alerts on accounts, which are in stress but have yet not defaulted. However, despite these alerts banks have seen a sharp rise in bad loans. According to npasourcse.com net non-performing assets rose 51% to Rs 92825 crore in March 2013 over previous year. Sources from the banking circle said that the RBI's consultative meeting follows instruction from the finance ministry to banks that they should focus on top 30 defaulters in order to improve their balance sheet. There are a number of options available with banks once an account turns bad like restructuring it, selling security pledged as mortgage and approaching debt recovery tribunal. During the meeting the RBI will primarily focus on preventive measures, said a bank chief. Copyright © 2013 Times Internet Limited. All rights reserved.

Bank Loan Or Junk Bond ETFs For Yield? - Seeking Alpha Jul 12th 2013, 10:02 Investors dumped speculative grade debt-related exchange traded funds and turned to senior loan and floating rate notes as interest rates inched higher in the last few months. However, the sell-off may be overdone and now junk bonds show attractive valuations, according to BlackRock. In a recent fixed-income strategy report, BlackRock is arguing for a shift away from bank loan securities toward high-yield, junk bonds instead, reports Michael Aneiro for Barron's. "Our argument, despite the 'floating rate' in the name of the loan asset class, however, was never predicated on the outlook for rising interest rates where it matters for loans: at the 3-month maturity," Jeffrey Rosenberg, BlackRock's chief fixed-income investment strategist, said in a report. "Loans provide protection from rising interest rates not of the recent sort (where longer maturity yields rise) but rather only once a tightening cycle gets underway. That still appears over a year and a half away." Rosenberg points out that loans outperformed bonds in the previous two months because investors held onto the loans, even as credit risk and duration risk in bonds fueled price declines and pushed investors away while loans continued to attract investors. "But that disconnect now reverses our original rationale for favoring loans over bonds: relative value. High yield bond yields now stand 200 basis points (2%) higher than just two months ago while loan yields are virtually unchanged. Loans can provide protection from rising interest rates but that is not what you are getting in the short run. Today you get a lot of credit risk for less reward than can be found in bonds." Nevertheless, BlackRock warned investors about overreaching for yield as the Federal Reserve considers winding down its monthly bond purchasing program. PowerShares Senior Loan Portfolio (BKLN) has been one of the best selling ETFs so far this year, gathering $3.1 billion in assets year-to-date. BKLN is up 1.4% this year. The ETF h as a 4.36% 30-day SEC yield. In comparison, the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) has lost $1.8 billion in assets this year. HYG is down 0.7% year-to-date and has a 5.69% 30-day SEC yield. Max Chen contributed to this article. Full disclosure: Tom Lydon's clients own HYG. Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. (More...)

Alvarion says Silicon Valley Bank seeks receiver for loan - Reuters UK Jul 11th 2013, 19:22 JERUSALEM (Reuters) - Israeli wireless broadband technology firm Alvarion Ltd said Silicon Valley Bank had requested a Tel Aviv court to enforce liens and appoint a receiver to collect a loan issued to the company. US-listed shares of the company fell 54 percent to 48 cents. Trading in the company's Tel Aviv-listed shares were halted earlier after Israeli newspapers reported that the bank had sought a receiver for Alvarion over a $3 million debt that the bank says the company cannot repay. "The court has prohibited any disposition of Alvarion's assets, whether direct or indirect, until and unless the court decides otherwise," Alvarion said in a statement late on Thursday. Further court hearings are scheduled for July 15. Alvarion has struggled to gain a foothold in the long-range wireless internet sector with its WiMax products and earlier this year sold its broadband wireless access business to Telrad Networks for $6 million. Alvarion posted a 45 percent drop in first-quarter revenue to $8.5 million and posted a loss of 51 cents per share excluding one-off items.

US Army sergeant used dead GI's identity in bank loan scam, feds ... - New York Daily News Jul 11th 2013, 14:25 wsmv.com U.S. Army Sgt. 1st Class James Robert Jones, an assistant inspector general at Fort Campbell, Ky., is accused of stealing the identities of Army officers, some of whom were in Afghanistan and one of whom was killed there, to get fraudulent bank loans. Meet James Robert Jones, sergeant no class. The U.S. Army base inspector who investigated misconduct stole the identities of other officers — including a soldier killed in combat — in a scheme to obtain phony bank loans, his indictment says. The Washington Post/Getty Images Fort Campbell, Ky., is where U.S. Army Sgt. 1st Class James Robert Jones allegedly stole the identities of soldiers in order to apply for loans, authorities contend. Jones, whose rank is sergeant first class, was charged Wednesday with using his position as an assistant inspector general at Fort Campbell, Ky., to acquire the personal information of active-duty Army officers, including some soldiers deployed in Afghanistan. The 42-year-old from Tennessee applied for loans under the officers' names, the federal indictment said. wsmv.com Federal prosecutor David Rivera says Sgt. 1st Class James Robert Jones stole the identities of Army officers, some of whom were in Afghanistan and one of whom was killed there, to fraudulently obtain bank loans. Jones said he'd plead not guilty. "There's a lot more to the story than what meets the eye," the accused bottom feeder told The Associated Press in a phone interview Wednesday night. Josh Anderson/AP Soldiers wait to board a plane to Afghanistan during a deployment at the Fort Campbell, Ky. While they put themselves in harm's way, Sgt. 1st Class James Robert Jones allegedly stole some of their identities to get phony bank loans, according to prosecutors. The alleged scam took place from February to May. "This defendant abused a position of trust and used his position to specifically target those who serve our country," federal prosecutor David Rivera said. Rogelio V. Solis/AP A U.S. Army soldier killed in combat was allegedly victimized by a base inspector who, ironically, was supposed to probe misconduct. James Robert Jones purportedly swiped the identities of the dead soldier and others in order to fraudulently acquire bank loans, according to prosecutors. With News Wire Services

Deutsche Bank Opaque Loans From Brazil to Italy Hide Risk - Bloomberg Jul 11th 2013, 11:29 Deutsche Bank AG (DBK), perennially among the top three in global credit markets, made billions of dollars of loans to banks worldwide since 2008 and accounted for them in a way that obscured their continuing risk to investors. Germany's largest bank managed to lend to firms from Brazil to Italy while making the transactions disappear from its balance sheet, even though it still is owed the money, according to four people with knowledge of the practice and internal documents provided to Bloomberg News. Deals totaling 2.5 billion euros ($3.3 billion) involving Italy's Banca Monte dei Paschi di Siena SpA and Banco do Brasil SA reveal a technique that obscured Deutsche Bank's lending reach when it sent cash to the banks, the documents show. The company had talks about a similar loan to Dexia SA (DEXB) weeks before that firm was rescued, according to the documents, and it used the same accounting for other deals through 2011, two of the people with knowledge of the transactions said. "We should be very concerned about the opacity and complexity of these transactions," said Joshua Rosner, an analyst at research firm Graham Fisher & Co. in New York who warned in early 2007 that securities linked to subprime loans posed risks to the economy. The loans are among 395.5 billion euros in assets that Deutsche Bank excludes from its balance sheet by offsetting them with equivalent liabilities, according to a person with direct knowledge of the practice. Deutsche Bank disclosed the amount for the first time in April under new international financial reporting standards. The total represents 19 percent of the company's reported assets of 2.03 trillion euros. 'Intended Spirit' Kathryn Hanes, a spokeswoman for Deutsche Bank, said the Frankfurt-based lender follows accounting rules "meticulously, conservatively and taking into account their intended spirit" and started reporting "these positions on a gross basis for even greater transparency." She said the amount of any offset loans is "immaterial to our balance sheet and key ratios." Thomas Blees, a spokesman in Berlin for KPMG, which has audited the lender since 1990, declined to comment. Deutsche Bank's accounting for the loans, described in documents for some deals as "enhanced" repos, reduces reported lending as co-Chief Executive Officers Anshu Jain and Juergen Fitschen seek to convince investors the company has enough capital compared with assets to cushion against losses. 'Market Risk' The bank profited from arranging side trades around the loans, including selling credit-default protection on government bonds later battered by Europe's sovereign-debt crisis, according to documents describing the Monte Paschi and Banco do Brasil deals and three people with knowledge of the transactions who asked not to be identified because the loans are private. The loan documents and other published information don't show how the lender's bets fared or whether regulators were aware of the accounting. "They're running a market risk," said Theodore Krintas, managing director of Athens-based Attica Wealth Management, which oversees 100 million euros, including Deutsche Bank stock. "From an investor point of view, I'd like very much to know." Documents about the Monte Paschi and Banco do Brasil loans describing completed deals show they were structured to allow for the offsetting, or netting, of assets against liabilities. Deutsche Bank sought to use similar accounting for a 2009 loan to Verona, Italy-based Banco Popolare SC (BP), which like Monte Paschi was later bailed out, according to an internal Deutsche Bank e-mail and a person with knowledge of the deal. Increased Netting Deutsche Bank also had long-term repo deals with three other lenders -- National Bank of Greece SA (ETE), Athens-based Hellenic Postbank SA (TT) and Qatar's Al Khaliji -- according to four people with direct knowledge of the financings. The transactions involved netting, according to one of the people, who was briefed on how Deutsche Bank accounted for them. No documents about the three loans were made available to Bloomberg News. By the third quarter of 2009, the amount of netting was expanding at a pace that led at least two senior executives to express concern that the bank's assets would increase if they could no longer offset the loans, the person said. Deutsche Bank's Hanes said in a written response to questions about all six deals that "the information is inaccurate" and "includes references to purported transactions that never occurred, and in respect of companies for which we have never structured enhanced repurchase transactions." She wouldn't specify what information might be in error or dispute specific deals. "We do not comment on client transactions," Hanes said. 'Skewed' View Every billion euros Deutsche Bank kept off its balance sheet inflated measures of its financial health, including capital ratios, which otherwise might have compelled it to raise more money from investors, according to Thomas Selling, an emeritus accounting professor at the Thunderbird School of Global Management in Glendale, Arizona, and a former academic fellow at the U.S. Securities and Exchange Commission. "Investors are relying on the financial statements for an unbiased view of the risk of the bank, and that view has been skewed," said Selling, one of three accountants who examined deal documents at the request of Bloomberg News. "It makes their balance sheet look less risky than it really is." Deutsche Bank ranks last among global banks by at least one risk measure -- the proportion of tangible capital to total assets, known as the leverage ratio -- according to data as of Dec. 31 compiled by Thomas Hoenig, vice chairman of the U.S. Federal Deposit Insurance Corp., which handles bank failures and sets capital levels along with other bank regulators. Capital Shortfall Kian Abouhossein, a JPMorgan Chase & Co. analyst in London, estimated in a July 4 note to clients that Deutsche Bank may face a capital shortfall of 12.3 billion euros under a proposal by the Basel Committee on Banking Supervision to include assets that are off banks' books in leverage calculations. Hanes said the company is "among the best-capitalized banks in the world in our global peer group" after improvements in its capital ratio and the sale of stock and subordinated debt this year. Chief Financial Officer Stefan Krause said in an interview with Boersen-Zeitung published July 6 that the firm would reduce its balance sheet and set aside profit as regulators implement stricter leverage rules. Deutsche Bank has ranked among the top three underwriters of international bonds, excluding self-led deals, since at least 2002 and is first this year, data compiled by Bloomberg show. It also improved its standing among loan arrangers to third place this year in Europe, Middle East and Africa, up from eighth in 2008, the data show. Short Position Deutsche Bank relied on what it called "no-balance-sheet usage" to keep loans off its books, documents for the Monte Paschi and Banco do Brasil deals show. In a typical secured borrowing, a bank lends cash it already has, recording the outlay as an asset on its balance sheet. In exchange, it gets collateral that it holds until the loan is repaid. In the no-balance-sheet transactions, Deutsche Bank received the collateral, sold it and used the cash to make the loan. By selling the collateral -- government bonds, in the deals reviewed by Bloomberg News -- Deutsche Bank created an obligation to return the securities, allowing it to net to essentially zero its assets and liabilities, the documents show. The lender in effect created a short position on the bonds, according to deal memos and internal e-mails about the transactions. In a short sale, traders sell borrowed securities and expect to buy them back at a lower price before returning them to the owner. Selling Collateral Deutsche Bank was able to sell the collateral because it didn't have to return the bonds under the terms of the agreement. Instead, the borrower agreed that Deutsche Bank could return the "cheapest-to-deliver" equivalent in the event of default, the documents show. The German lender sold insurance against possible defaults of securities linked to the collateral, in effect moving the risk that the loan wouldn't be repaid onto its trading book and away from public scrutiny, according to accountants who reviewed the documents for Bloomberg News. Deutsche Bank is shielded from the deterioration of a government's creditworthiness because its client would have to post additional collateral. It was on the hook if the country defaulted on its bonds, the accountants said. "It goes against the spirit of any regulation," said Arturo Bris, a finance professor at the IMD business school in Lausanne, Switzerland, who examined the Deutsche Bank documents. "Risks, like energy, get transformed but don't disappear." IFRS Rules The deals resembled repurchase agreements, or repos, in which a borrower sells securities to a lender, promising to buy them back at a future date at an agreed-upon price. Unlike typical repos, which are reported as loans and mature in as short a period as hours, the Deutsche Bank trades lasted five years or longer and weren't recorded as assets, documents show. To keep loans off the balance sheet, Deutsche Bank executives invoked International Financial Reporting Standards rule IAS 32, which requires certain financial instruments to cancel each other if obligations are settled simultaneously or net throughout the life of the deal, the documents show. "Reporting on a net basis is an obligation, not an optional accounting treatment," Deutsche Bank's Hanes said. Default Insurance By agreeing to accept the cheapest asset in the event of default, Monte Paschi and Banco do Brasil effectively insured the bonds they gave Deutsche Bank as collateral. They paid interest on the borrowed cash and kept earning the coupons on the bonds, which they accounted for as still owning because they were, in effect, due to receive them back, the documents show. Deutsche Bank in turn earned a premium by acting as a broker on the default insurance by selling credit-default protection to investors, allowing the bank to record a profit at the outset. It reaped about 60 million euros that way at the start of the Monte Paschi deal, profit that was booked by the bank's rates unit, the documents show. The deal is described in internal Deutsche Bank memos as a "structured term" repo. In public filings, Monte Paschi labels the financing both as a long-term repo and as "total return swaps" in which the Italian lender receives cash for bonds. Investors wouldn't have known the netted-out deals existed because Deutsche Bank's regulatory filings describe accounting practices that indicate it probably was showing the full loan amounts, two accountants who reviewed the deals said. Followed Rules Since 2010, the company's annual reports have included repos among the types of transactions it says it normally records in gross amounts, rather than net. "Repurchase and reverse repurchase agreements are also presented gross, as they also do not settle net in the ordinary course of business," Deutsche Bank said in the filings. Still, the company continued to use netting to account for new long-term repos through at least 2011, according to two people with knowledge of the treatment. The pace of loans slowed as the European Central Bank stepped in with its own crisis lending, one person said. "They cleverly found a way to exploit the law and followed the rules to the letter," said Barry Epstein, a principal of forensic accounting and litigation consulting at Chicago-based Cendrowski Corporate Advisors, who reviewed deal documents. The transactions were designed by the company's investment bank, whose co-head at the time, Jain, helped build the lender into one of the world's biggest securities firms. Jain, 50, was appointed co-CEO of Deutsche Bank last year. Monte Paschi The bank's 2 billion-euro loan to Monte Paschi in 2008, first disclosed by Bloomberg News in January, is being investigated by Siena prosecutors because the Italian firm used the transaction to hide losses. Deutsche Bank hasn't been accused of wrongdoing in the matter. The deal "was subject to our rigorous internal approval processes and also received the requisite approvals of the client," the firm has said. Jain declined to comment about the loans to banks. The documents outlining Deutsche Bank's design and bookkeeping of loans to Monte Paschi and Banco do Brasil provide a glimpse of the other side of such transactions and reveal their deployment beyond Italy. When credit markets seized up in 2008, executives at Deutsche Bank's global rates group in London, led at the time by Michele Faissola, along with bankers at other units, worked on long-term repo deals to help quench financial firms' thirst for cash. Faissola, now the company's global head of asset and wealth management, declined to comment. Dexia Deal The deals discussed in documents and cited by people with knowledge of the transactions involved some of the world's most-troubled banks and economies at a perilous moment. They included the 2009 loan of 200 million euros to Banco Popolare, which like Monte Paschi took state aid from Italy. Deutsche Bank executives approved a similar transaction with Dexia, the Franco-Belgian lender that was later bailed out, documents show. In a four-page memo that concludes with the words "Approved 8 August 2008," the bank's Accounting Technical Forum described the cash outlay as a loan. "DB in effect has a financing transaction and books a loan to reflect this," the accounting group said. A one-page annex explained that Deutsche Bank would offset the loan with its obligation to return the value of the bonds to Brussels-based Dexia. "No such trade was executed between Deutsche Bank and Dexia," Hanes said. Still, the planned financing provided a blueprint bankers proposed using for future deals, the documents show. A February 2009 memo from the accounting group explained that approval for an enhanced repo with Banco do Brasil was restricted because of a "limitation of Euro 5bn on the repo netting determined under the initial Dexia trade approval from 2008." Greek Loans Banco do Brasil, controlled by the Brazilian government, participated in a five-year deal with Deutsche Bank in 2009, in which it borrowed about $500 million, according to two people with knowledge of the financing. Al Khaliji borrowed $42 million from Deutsche Bank in 2009 in a long-term repo backed by Qatari government bonds, according to an executive at the Doha-based lender who asked not to be named in line with company policy. In Greece, which sparked Europe's debt crisis by revealing in October 2009 that its budget deficit was more than double previous estimates, Hellenic Postbank borrowed at least 100 million euros from Deutsche Bank, according to two people with knowledge of the deal. National Bank of Greece, the country's biggest lender, received 220 million euros, one person said. "We cannot give any disclosure or information on that deal because it was a bilateral transaction between banks," said Petros Christodoulou, deputy CEO of National Bank of Greece. Harris Siganos, CEO of state-controlled Hellenic Postbank, declined to comment, as did spokesmen for Banco Popolare, Brasilia-based Banco do Brasil and Dexia. Bafin, Bundesbank The documents reviewed by Bloomberg don't indicate whether regulators in Germany or elsewhere knew about the deals. Sven Gebauer, a spokesman for German financial watchdog Bafin, said confidentiality prohibits the regulator from commenting on specific companies or transactions. Ute Bremers, a spokeswoman for Frankfurt-based Bundesbank, Germany's central bank, declined to comment, as did John Nester at the SEC in Washington. A spokesman for the London-based International Accounting Standards Board, which sets rules, said the group doesn't comment on how they are applied. Project Santorini "The figures should be disclosed," said Edgar Loew, an honorary professor at WHU-Otto Beisheim School of Management in Vallendar, Germany, who examined the Deutsche Bank documents for Bloomberg News. "This type of accounting was not intended by the rules." Loew, who previously held positions at KPMG and Deutsche Bank, said he wasn't involved in preparing the bank's public filings that would have addressed such deals. By the end of 2009, the European debt crisis had set in, pummeling the bonds underlying some of the agreements and eroding the capital of banks, including Monte Paschi, which used a cash-for-bonds repurchase agreement with Deutsche Bank to conceal about 429 million euros of losses. Siena prosecutors are scrutinizing the deal, dubbed Project Santorini, as part of probes into fraud, false bookkeeping and obstruction of regulatory supervision at the world's oldest bank, court papers show. The Italian lender restated accounts and, as of March 31, had to post 939.1 million euros of margin, or guarantees on the Deutsche Bank transaction, which includes an interest-rate swap, Monte Paschi said on April 24. 'Grave Concerns' By this year, even the off-balance-sheet lending couldn't spare Deutsche Bank from the need to raise more money. It sold almost $3.9 billion of shares in April and about $1.5 billion of subordinated debt in anticipation of stricter capital rules. Shareholders can be certain of a lender's health only if they understand the activities a bank engages in, said Christopher Wheeler, an analyst at Mediobanca SpA in London. "There's been a lot of noise around the tools used by the bank to boost capital and reduce leverage since the crisis," Wheeler said. "If this particular kind of mechanism were found to have been used, there would be grave concerns about whether its current capital and leverage ratios are a true reflection of the bank's financial position." To contact the reporters on this story: Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net; Vernon Silver in Rome at vtsilver@bloomberg.net To contact the editors responsible for this story: Edward Evans at eevans3@bloomberg.net; Melissa Pozsgay at mpozsgay@bloomberg.net Enlarge image Deutsche Bank Opaque Loans From Brazil to Italy Obscure Risk Traffic passes the illuminated headquarters of Deutsche Bank AG in Frankfurt. Deutsche Bank has ranked among the top three underwriters of international bonds, excluding self-led deals, since at least 2002 and is first this year, data compiled by Bloomberg show. Traffic passes the illuminated headquarters of Deutsche Bank AG in Frankfurt. Deutsche Bank has ranked among the top three underwriters of international bonds, excluding self-led deals, since at least 2002 and is first this year, data compiled by Bloomberg show. Photographer: Ralph Orlowski/Bloomberg 3:37 July 11 (Bloomberg) -- Deutsche Bank AG, perennially among the top three in global credit markets, made billions of dollars of loans to banks worldwide since 2008 and accounted for them in a way that obscured their continuing risk to investors. Bloomberg's Elisa Martinuzzi reports from Milan on Bloomberg Television's "Countdown." (Source: Bloomberg) Enlarge image Deutsche Bank Opaque Loans From Brazil to Italy Obscure Risk Krisztian Bocsi/Bloomberg Deutsche Bank has ranked among the top three underwriters of international bonds, excluding self-led deals, since at least 2002 and is first this year, data compiled by Bloomberg show. Deutsche Bank has ranked among the top three underwriters of international bonds, excluding self-led deals, since at least 2002 and is first this year, data compiled by Bloomberg show. Photographer: Krisztian Bocsi/Bloomberg