Trump’s business wants to delay loan payments to Deutsche Bank
The family business of US President Donald Trump is in informal discussions with Deutsche Bank about delaying some loan payments as the coronavirus forces widespread disruptions to the economy, according to a person familiar with the matter.
The Trump Organization representatives approached the Deutsche Bank’s private banking unit in New York late last month and the talks are ongoing, according to The New York Times, which reported the negotiations earlier.
Deutsche Bank is having similar discussions with other commercial real estate companies in the US, said another person, also asking not to be identified discussing private matters.
A Deutsche Bank spokesperson declined to comment. A spokesperson for The Trump Organization did not immediately respond to a request for comment.
The global Covid-19 pandemic has forced borrowers and lenders to discuss ways to honour debts while acknowledging the enormous pressure on company bottom lines.
ARM’S LENGTH
But the request from The Trump Organization is especially delicate after Deutsche Bank decided to keep Trump’s business dealings at arms length when he took office.
Deutsche Bank’s loans to Trump have included money for a Florida golf resort, a Washington DC hotel and a Chicago tower. Two of the properties are being hit by the pandemic, The New York Times said. The Doral golf resort near Miami has stopped all operations, while the Washington hotel closed its restaurant and bar, according to the newspaper.
A process to sell the hotel lease has been halted amid a collapse in the commercial real estate market, the Washington Post reported on Tuesday.
Analysts have flagged commercial real estate as a particularly vulnerable part of the economy as malls and hotels across the country have had to close. But while other firms hit by the crisis may be able to tap into a $500bn rescue fund, the president and his family are barred from accessing that money, The New York Times said.
For Deutsche Bank, the issue is further complicated because the loans, which were negotiated between 2012 and 2015, include a personal guarantee from Trump. That would put the German lender in the position of potentially having to collect from a sitting president in case of a default, Bloomberg reports.
The Trump Organization has also spoken to Palm Beach County in Florida about lease payments for a golf course the company runs, The New York Times said.
The Wall Street Journal reported that the outbreak is costing The Trump Organization properties more than $1m a day in revenue.
The relationship between Germany’s largest lender and Trump has been under scrutiny since the former real estate tycoon emerged as a frontrunner for the US presidency four years ago.
Democrats in Congress have been seeking to subpoena documents on his dealings with the bank to shine a light on his business performance and practices before his election.
In late 2016, Deutsche Bank’s leaders were so concerned about the potential public relations effect if The Trump Organization were to default that they discussed extending repayment dates until after the end of a potential second term in 2025, Bloomberg has reported.
They ultimately decided against the idea and just chose not to engage in any new business with Trump while he is in office.