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Donald Trump Owes At Least $250 Million to Banks

The Wall Street Journal. The Wall Street Journal. 20/03/2016 Anupreeta Das
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Republican presidential candidate Donald Trump owes at least $250 million to banks for various real estate projects, according to his personal finance disclosure forms.

His creditors mostly are small firms, from New Jersey-based Amboy Bank to specialized real-estate firm Ladder Capital Finance LLC. Deutsche Bank AG is the only bank with a big Wall Street presence that continues to lend to him, The Wall Street Journal reported Saturday.

Since 2012, the German bank has lent Mr. Trump more than $300 million through its private bank. Most recently, it committed to lending Mr. Trump $170 million to help with the ongoing renovation of the Old Post Office building in Washington, which the businessman is converting into a luxury hotel.

Earlier deals were done through the investment bank, but ties to that unit frayed after Mr. Trump sued Deutsche Bank over a 2005 Chicago property loan. The suit was settled five years later.

Citigroup Inc., Goldman Sachs Group Inc., J.P.Morgan Chase & Co. and Morgan Stanley are among the big Wall Street shops that do very little, if any, work with Trump-affiliated businesses. Bankers say that's partly because Mr. Trump has moved away from developing multimillion-dollar real-estate projects to managing them and licensing the Trump name, reducing his need to borrow.

He also has grown more conservative in his use of debt, his daughter Ivanka Trump said in an interview. Ms. Trump helps her father manage the family's real-estate and other assets at The Trump Organization LLC. Mr. Trump has $1 billion of his own equity in current projects, she added.

When he does look for outside funds, Mr. Trump picks banks that offer the lowest interest rates -- often as low as 2% that large investment banks cannot always offer, according to people familiar with his dealings. Private banks are usually able to offer lower rates and will accept a personal guarantee on a loan, whereas investment banks typically offer "non-recourse" loans that are secured with collateral such as property.

Things were very different in the 1980s and 1990s, when some of the biggest Wall Street firms lent regularly to Mr. Trump's casino and hotel businesses. Deutsche Bank, UBS, Lehman Brothers, Wachovia and Credit Suisse First Boston were among the firms that were active players in real-estate or gaming. Bankers Trust, a firm that Deutsche Bank bought in 1999 was another big lender to Mr. Trump, with ties going back to the New Yorker's earliest days as a real-estate developer.

When star banker Ken Moelis joined UBS AG in 2000, his hire was considered a coup in the banking industry because he brought clients such as Mr. Trump.

In the early 2000s, Mr. Trump's publicly-traded casino company struggled under a $1.8 billion debt burden. UBS and Morgan Stanley advised the company on restructuring its debt and lent it $500 million in 2004.

Scott Butera, a former UBS banker who Mr. Trump hired to help restructure the casino business, recalls the fraught situation between the company and a group of about 30 creditors including several banks. "But for better or worse, Wall Street has a short memory," said Mr. Butera, who is supporting Mr. Trump in the presidential race. "All of Donald's difficult situations were eventually resolved."

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