February 1, 2023 

Ms. Wendy Bryce 

Vice President, US Regulatory Management Group

DWS USA Corporation 

875 Third Avenue 

New York, New York 10022 

 

Dear Ms. Bryce: 

By message dated December 23, 2022, DWS USA LLC (“DWS 

USA”), New York, New York, the U.S. intermediate holding company subsidiary 

of Deutsche Bank AG (“Deutsche Bank”), Frankfurt, Germany,1

 has requested the 

Board’s approval under the Board’s Regulation YY2

 of contractual provisions that 

must be included in a subordinated debt instruments to be issued by DWS USA to 

a foreign subsidiary of Deutsche Bank. 

The Board’s regulation regarding total loss-absorbing capacity (the 

“TLAC rule”)3

 requires the U.S. intermediate holding companies4 of foreign 

global systemically important banking organizations (“covered IHCs”) to maintain 

outstanding a minimum amount of long-term debt that meets certain eligibility 

criteria (“eligible long-term debt”).5

 With respect to debt issued by a covered IHC 

to its foreign affiliates, the eligible long-term debt must include a contractual 

1

 12 CFR 252.153. 

2

 12 CFR 252.161. 

3

 12 CFR 252.60-.65, 252.153, 252.160-.167. 

4

 The Board’s Regulation YY requires foreign banking organizations with 

$50 billion or more in total U.S. non-branch assets to form an intermediate holding 

company in the United States. 12 CFR 252.153(a).

5

 12 CFR 252.162. 
2

provision that is approved by the Board and allows the Board to order the 

conversion of the debt into common equity tier 1 capital (“conversion trigger”).6

The Deputy General Counsel, acting pursuant to authority delegated 

by the Board, has considered a number of factors in determining whether to grant 

the request by DWS USA for approval of a conversion trigger.7

 In particular, the 

Deputy General Counsel has considered:

(1) Whether the conversion trigger includes any conditions for triggering 

the conversion other than the issuance of an internal debt conversion order 

by the Board;

(2) Whether the instruments governing the long-term debt and related 

documents mitigate any impediments to the conversion of the long-term 

debt into equity capital;

(3) Whether the conversion trigger provides for the conversion of the longterm debt into common equity tier 1 capital; 

(4) Whether the conversion trigger requires the conversion of long-term 

debt in the amount specified by the Board’s internal debt conversion order; 

and

(5) Whether, upon conversion of long-term debt pursuant to the conversion 

trigger, the converted long-term debt would no longer remain outstanding 

as a liability of the Covered IHC.

DWS USA has provided information to the Board addressing each 

of the factors noted above. Based on the relevant regulatory factors and on a 

review of the instruments governing the long-term debt, related documents, and 

other facts presented, the Deputy General Counsel, acting pursuant to authority 

delegated by the Board and after consultation with the Director of the Division of 

6

 12 CFR 252.161. Under the Board’s regulations, the Board may issue an 

internal debt conversion order only after first determining that the Covered IHC is 

in “default or danger of default” and one of the following circumstances applies: 

(1) a foreign banking organization that controls the Covered IHC (or any 

subsidiary of such entity) has been placed into resolution proceedings in its home 

country; (2) the home country supervisor of the top-tier foreign banking 

organization has consented or not promptly objected to the conversion of internal 

long-term debt after notification by the Board; or (3) the Board has made a written 

recommendation to the Secretary of the Treasury to put the Covered IHC into Title 

II resolution proceedings. 12 CFR 252.163.

7

 12 CFR 265.6(j).
3

Supervision and Regulation, grants the request by DWS USA for approval of the 

conversion triggers it has presented. This decision is based on the specific facts 

and representations in your request and in communications with Board staff. Any 

change in these facts or representations should be communicated immediately to 

Board staff and could result in a different conclusion. This action is limited solely 

to granting approval of the conversion triggers presented by DWS USA.

Very truly yours,

(Signed) Ann E. Misback

Ann E. Misback

Secretary of the Board