LONDON Trading volume in Deutsche Bank's debt has more than doubled this week and soared 15-fold in a month as investors rush to offload the embattled German lender's bonds.
Deutsche's shares and 'Co-Co' bonds slumped to all-time lows on Friday. Doubts over its viability mushroomed following a $14 billion fine earlier this month from the U.S. authorities for misselling mortgage-backed securities.
All markets have been affected because Deutsche has significant trading relationships with the world's largest finance houses. The International Monetary Fund identified it earlier this year as a bigger potential risk to the wider financial system than any other global bank.
Figures from Trax, a subsidiary of MarketAxess, showed that some 1.82 billion euros worth of Deutsche senior and subordinated debt had changed hands in the four days up to and including September 29, more than double the previous week's total of 761.5 million euros.
That represents a 15-fold increase on the 121 million euros traded in the last week of August, underlining the extent to which sentiment towards Germany's biggest bank has soured.
Trading in the bank's lower rated subordinate debt has been more frenetic because holders of these bonds would be hit first in the event of any restructuring.
Some 550.8 million euros of these bonds have changed hands so far this week, more than 18 times the 30.5 million euros traded in the last full trading week of August, Trax said.
Trax provides post-trade services for around two thirds of all fixed income transactions in Europe.
Earlier on Friday Deutsche Bank's shares (DBKGn.DE) fell below 10 euros for the first time, bringing the stock's losses up to 25 percent over the last three weeks and 55 percent since the start of the year.
The bank's 6 percent coupon contingent convertible 'CoCo' bond, which is converted into equity when the bank's capital level falls below a certain threshold, traded below 70 cents on the euro for the first time ever.
(Reporting by Jamie McGeever; Editing by Anna Willard)