Deutsche Bank set for $1bn windfall on trader’s shipping bet
Deutsche Bank is set to make up to $1bn on a long-shot bet on Israeli shipping firm Zim after its value surged following record-high global freight rates, according to a Bloomberg report.
The bank’s distressed debt trader Mark Spehn had wagered less than $100m over the past five years on building a position in the firm through bond and bank loans as shipping rates fell.
Zim recovered to float on the stock market in January this year and has almost tripled in value since.
The company has yielded hefty gains for its backers and made it one of the most successful recent initial public offerings.
Deutsche Bank is the firm’s second largest shareholder with a 13.68 per cent stake, worth $923m.
Zim said earlier this month that Deutsche Bank had been among those to sell shares in the company in a secondary offering worth $279m.
These numbers would make the Zim trade one of the bank’s most profitable since before the 2008 financial crisis.
During that period, its asset-backed securities division made bets against the US subprime sector, raking in almost $2bn.