A European trader said, "One person broke ranks and everybody else fell in line." Karstadt's loan is led by Bayerische Landesbank and ABN Amro. Fourteen other lenders originally participated in the credit that closed last November when prior bilateral lenders were rolled into a syndicated credit.
An LBBW spokeswoman responded, "The gentleman's agreement means that the right of first refusal enjoyed by the pool banks is respected. LBBW consulted the leading bank (BayerischeLandesbank) before selling its claims, and as such has behaved correctly." She did not confirm or deny that LBBW had been the initial seller.
Karstadt is facing financial difficulties amid a challenging environment for German retailers. "It's not a problem that just happened overnight," the dealer noted. The German consumer has not been spending as much as expected and there's been overcapacity in the industry, he said. Karstadt plans to sell assets, including stores and reduce it workforce by 5,500 workers over the next three years to return to profit. Detlef Neveling, director of investor relations at Karstadt, did not return calls.