Danske Bank had set aside this week to talk to bond investors and persuade them to buy its debt despite its role in Europe's biggest money laundering scandal. The bank knew it was going to have to pay a bit more, but had braced itself and just wanted to get started.
But then, a string of bad news upset that agenda.
Denmark's biggest bank is at the center of a $230 billion dirty money case, with multiple criminal investigations already under way and potentially hefty fines ahead. Now, investors are facing more bad news. On Thursday, Hermitage Capital Management founder Bill Browder is planning to present "new information" on the laundering case during a briefing in the Danish parliament. That comes amid news that Danske is being sued by a U.S. pension fund over the case.
Against that backdrop, Danske has decided to delay its planned bond issuance until there is more clarity on what emerges from the Browder briefing. "With massively oversubscribed books, the responsible thing to do as an issuer was to put the bond sale on hold and wait until what comes out of the press conference," Christoffer Mollenbach, head of treasury, said in an interview Thursday. "I'm hoping we can make the decision today on whether to proceed with the bond sale or not," he added.
Shares in Danske, which slumped 47% last year, fell as much as 3.7% Thursday, putting the bank on course for its worst trading day so far in 2019. Both Deutsche Bank and RBC Capital Markets lowered their price estimates for Danske in sector reports on Nordic lenders published Thursday.