WALL STREET LOOKS TO DONALD TRUMP'S NEXT CON
Permit me one more Donald Trump story in order to share a theory making the rounds on Wall Street about how the former conniver in chief is going to make more money now than ever before. It involves a con, of course.
It’s important to remember why the twice-impeached former president needs so much money, and fast. He owes banks and investors some $400 million in the next few years. There’s the $100 million coming due next year on Fifth Avenue’s Trump Tower. And the $125 million he borrowed on the Doral golf resort, in Florida, from Deutsche Bank, which he must repay in 2023. And the $170 million he also owes Deutsche Bank, in 2024, on his hotel in Washington near the White House. The private citizen who now lives full-time—and illegally, I might add—at his Mar-a-Lago resort in Palm Beach personally guaranteed these debts. If he doesn’t pay them—something he’s been known to quite frequently not do—his creditors can foreclose on the underlying assets and then sell them to get the money he owes them.
A typical borrower in Trump’s situation would refinance the debt. A refinancing would probably lower his borrowing costs—given how low rates have stayed—and would push out the maturities on the debt, essentially kicking the can down the road. But Trump is not your typical borrower. Wall Street has refused to do business with him for more than a decade, after he singed many of the banks that lent him money as a result of his failed forays into the casino business, the airline business, and the marquee-hotel business, among others. The one Wall Street bank that deigned to lend him money—Deutsche Bank—finally pulled the plug on him after he fomented the January 6 insurrection. One Wall Street banker told me that Deutsche Bank’s decision was both “smart” and “unavoidable” since Trump “is toxic amongst a wide swath of Deutsche Bank’s shareholders, employees, and vendors.” Essentially, for Deutsche Bank to have any prayer of providing banking services in corporate America—lending money, providing investment-management expertise, or offering M&A advice—it had to cut ties with Trump, or else face being ostracized from the club.
https://www.vanityfair.com/news/2021/01/wall-street-looks-to-donald-trumps-next-con