The notes will pay interest
quarterly in arrears for the first three years at a fixed rate of 5.75% per annum and, thereafter, at a variable rate per annum
equal to the 10-Year U.S. Dollar ICE Swap Rate (“
10-Year ICE Swap Rate
”), subject to the Minimum Interest Rate
of 0.00% per annum. Any payment on the notes is subject to the credit of the Issuer.
The notes are senior unsecured
obligations of Deutsche Bank AG and are not, either directly or indirectly, an obligation of any third party. Any payments to be
made on the notes depends on the ability of Deutsche Bank AG to satisfy its obligations as they become due and is not guaranteed
by any third party. In the event Deutsche Bank AG were to default on its obligations or become subject to a Resolution Measure
(as defined below), you might not receive any amounts owed to you under the terms of the notes.
Key Terms
Issuer:
|
Deutsche Bank AG, London Branch
|
Denominations:
|
$1,000 (the “
Principal Amount
”) and integral
multiples of $1,000 in excess thereof
|
Issue Price:
|
100% of the Principal Amount
|
Payment at Maturity:
|
At maturity, you will
receive a cash payment per $1,000 Principal Amount of notes equal to the Principal Amount plus any accrued but unpaid interest.
If the scheduled Maturity Date is not a business day, the Maturity Date will be the first following day that is a business day,
but no adjustment will be made to the interest payment made on such following business day.
The Payment at Maturity is subject
to the credit of the Issuer.
|
Interest Rate:
|
Interest
will be paid quarterly in arrears at the applicable Interest Rate set forth below on each Interest Payment Date, based on an unadjusted
30/360 day count convention.
·
For
each Interest Period commencing on or after the Settlement Date to, but excluding, April 25, 2021, the Interest Rate will be 5.75%
per annum.
·
For
each Interest Period commencing on or after April 25, 2021, the Interest Rate will be the greater of (i) the Minimum Interest
Rate and (ii) the 10-Year ICE Swap Rate for the relevant Interest Period.
The 10-Year ICE Swap Rate, at any
given time, generally indicates the fixed rate of interest paid (semi-annually) that a counterparty in the swaps market would
have to pay for a fixed-for-floating U.S. dollar interest rate swap transaction with a 10-year maturity in order to receive a
floating rate (paid quarterly) equal to three-month U.S. dollar London Interbank Offered Rate for that same maturity.
|
Minimum Interest Rate:
|
0.00% per annum
|
Interest Period:
|
The period from, and
including, a scheduled Interest Payment Date, or the Settlement Date in the case of the first Interest Period, to, but excluding,
the following Interest Payment Date
|
Interest Determination Date:
|
For each Interest
Period commencing on or after April 25, 2021, two U.S. Government Securities business days prior to the first day of such Interest
Period
|
Interest Payment Dates
1
:
|
The 25
th
of
each January, April, July and October, beginning on July 25
th
, 2018 and ending on the Maturity Date. If any scheduled
Interest Payment Date is not a business day, the interest will be paid on the first following day that is a business day, but
no adjustment will be made to the interest payment made on such following business day.
|
Trade Date
1
:
|
April 23, 2018
|
Settlement Date
1
:
|
April 25, 2018
|
Maturity Date
1
:
|
April 25, 2028
|
Listing:
|
The notes will not be listed on any securities exchange.
|
CUSIP:
|
25155MMG3
|
ISIN:
|
US25155MMG32
|
|
1
|
In the event that we make any changes to the expected
Trade Date or Settlement Date, the Interest Payment Dates and the Maturity Date may be changed so that the stated term of the
notes remains the same.
|
Investing in the notes
involves a number of risks
.
See
“
Risk Factors
”
beginning on page 13 of the accompanying prospectus
,
PS
-
5 of the accompanying prospectus supplement and
“
Selected Risk Considerations
”
beginning
on page PS
-
6 of this pricing supplement
.
The Issuer
’
s
estimated value of the notes on the Trade Date is approximately $970.00 to $990.00 per $1
,
000 Principal Amount of notes
,
which is less than the Issue Price
.
Please see
“
Issuer
’
s Estimated Value of the Notes
”
on page PS
-
2 of this pricing supplement for additional information
.
By acquiring the notes
,
you will be bound by and deemed irrevocably to consent to the imposition of any Resolution Measure by the competent resolution
authority
,
which may include the write down of all
,
or a portion
,
of any payment on the notes or the conversion
of the notes into ordinary shares or other instruments of ownership
.
In a German insolvency proceeding or in the event of
the imposition of Resolution Measures with respect to the Issuer
,
certain specifically defined senior unsecured debt instruments
,
including the notes
,
would rank junior to
,
without constituting subordinated debt
,
all other outstanding
unsecured unsubordinated obligations of the Issuer
,
including some of the other senior debt securities issued under the
prospectus
,
and would be satisfied only if all such other senior unsecured obligations of the Issuer have been paid in full
.
If any Resolution Measure becomes applicable to us
,
you may lose some or all of your investment in the notes
.
Please
see
“
Resolution Measures and Deemed Agreement
”
on page PS
-
3 of this pricing supplement for more
information
.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of the notes or passed upon the accuracy
or the adequacy of this pricing supplement or the accompanying prospectus supplement or prospectus. Any representation to the contrary
is a criminal offense.
|
Price to Public
(1)
|
Discounts and Commissions
(1)
|
Proceeds to Us
|
Per Note
|
$1,000.00
|
$990.00
|
$10.00
|
Total
|
$
|
$
|
$
|
|
(1)
|
For more detailed information about discounts and commissions,
please see “Supplemental Plan of Distribution (Conflicts of Interest)” in this pricing supplement.
|
The agent for this offering
is Deutsche Bank Securities Inc. (“
DBSI
”), an affiliate of ours. For more information, see “Supplemental
Plan of Distribution (Conflicts of Interest)” in this pricing supplement.
The notes are not deposits
or savings accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other U
.
S
.
or foreign governmental agency or instrumentality
.
April , 2018
Issuer
’
s Estimated Value
of the Notes
The Issuer’s
estimated value of the notes is equal to the sum of our valuations of the following two components of the notes: (i) a bond and
(ii) an embedded derivative(s). The value of the bond component of the notes is calculated based on the present value of the stream
of cash payments associated with a conventional bond with a principal amount equal to the Principal Amount of notes, discounted
at an internal funding rate, which is determined primarily based on our market-based yield curve, adjusted to account for our funding
needs and objectives for the period matching the term of the notes. The internal funding rate is typically lower than the rate
we would pay when we issue conventional debt securities on equivalent terms. This difference in funding rate, as well as the agent’s
commissions, if any, and the estimated cost of hedging our obligations under the notes, reduces the economic terms of the notes
to you and is expected to adversely affect the price at which you may be able to sell the notes in any secondary market. The value
of the embedded derivative(s) is calculated based on our internal pricing models using relevant parameter inputs such as expected
interest rates and mid-market levels of price and volatility of the assets underlying the notes or any futures, options or swaps
related to such underlying assets. Our internal pricing models are proprietary and rely in part on certain assumptions about future
events, which may prove to be incorrect.
The Issuer’s
estimated value of the notes on the Trade Date (as disclosed on the cover of this pricing supplement) is less than the Issue Price
of the notes. The difference between the Issue Price and the Issuer’s estimated value of the notes on the Trade Date is due
to the inclusion in the Issue Price of the agent’s commissions, if any, and the cost of hedging our obligations under the
notes through one or more of our affiliates. Such hedging cost includes our or our affiliates’ expected cost of providing
such hedge, as well as the profit we or our affiliates expect to realize in consideration for assuming the risks inherent in providing
such hedge.
The Issuer’s
estimated value of the notes on the Trade Date does not represent the price at which we or any of our affiliates would be willing
to purchase your notes in the secondary market at any time. Assuming no changes in market conditions or our creditworthiness and
other relevant factors, the price, if any, at which we or our affiliates would be willing to purchase the notes from you in secondary
market transactions, if at all, would generally be lower than both the Issue Price and the Issuer’s estimated value of the
notes on the Trade Date. Our purchase price, if any, in secondary market transactions will be based on the estimated value of the
notes determined by reference to (i) the then-prevailing internal funding rate (adjusted by a spread) or another appropriate measure
of our cost of funds and (ii) our pricing models at that time, less a bid spread determined after taking into account the size
of the repurchase, the nature of the assets underlying the notes and then-prevailing market conditions. The price we report to
financial reporting services and to distributors of our notes for use on customer account statements would generally be determined
on the same basis. However, during the period of approximately three months beginning from the Trade Date, we or our affiliates
may, in our sole discretion, increase the purchase price determined as described above by an amount equal to the declining differential
between the Issue Price and the Issuer’s estimated value of the notes on the Trade Date, prorated over such period on a straight-line
basis, for transactions that are individually and in the aggregate of the expected size for ordinary secondary market repurchases.
Resolution Measures
and Deemed Agreement
On
May 15, 2014, the European Parliament and the Council of the European Union adopted a directive establishing a framework for the
recovery and resolution of credit institutions and investment firms (commonly referred to as the “
Bank Recovery and Resolution
Directive
”). The Bank Recovery and Resolution Directive required each member state of the European Union to adopt and
publish by December 31, 2014 the laws, regulations and administrative provisions necessary to comply with the Bank Recovery and
Resolution Directive. Germany adopted the Recovery and Resolution Act (
Sanierungs
-
und Abwicklungsgesetz
, or the
“
Resolution Act
”), which became effective on January 1, 2015. The Bank Recovery and Resolution Directive and
the Resolution Act provided national resolution authorities with a set of resolution powers to intervene in the event that a bank
is failing or likely to fail and certain other conditions are met. From January 1, 2016, the power to initiate resolution measures
applicable to significant banking groups (such as Deutsche Bank Group) in the European Banking Union has been transferred to the
European Single Resolution Board which, based on the European Union regulation establishing uniform rules and a uniform procedure
for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a
Single Resolution Fund (the “
SRM Regulation
”), works in close cooperation with the European Central Bank, the
European Commission and the national resolution authorities. Pursuant to the SRM Regulation, the Resolution Act and other applicable
rules and regulations, the notes may be subject to any Resolution Measure by the competent resolution authority if we become, or
are deemed by the competent supervisory authority to have become, “non-viable” (as defined under the then applicable
law) and are unable to continue our regulated banking activities without a Resolution Measure becoming applicable to us. By acquiring
the notes, you will be bound by and deemed irrevocably to consent to the provisions set forth in the accompanying prospectus, which
we have summarized below.
Pursuant
to the German law on the mechanism for the resolution of banks of November 2, 2015 (
Abwicklungsmechanismusgesetz
, or the
“
Resolution Mechanism Act
”), in a German insolvency proceeding or in the event of the imposition of Resolution
Measures with respect to the Issuer, certain specifically defined senior unsecured debt instruments, including the notes, would
rank junior to, without constituting subordinated debt, all other outstanding unsecured unsubordinated obligations of the Issuer
and be satisfied only if all such other senior unsecured obligations of the Issuer have been paid in full.
The Resolution Mechanism
Act could lead to increased losses for the holders of the notes if insolvency proceedings were initiated or Resolution Measures
imposed upon the Issuer
. See “Selected Risk Considerations” in this pricing supplement and “Risk Factors”
in the accompanying prospectus for more information.
By
acquiring the notes, you will be bound by and deemed irrevocably to consent to the imposition of any Resolution Measure by the
competent resolution authority. Under the relevant resolution laws and regulations as applicable to us from time to time, the notes
may be subject to the powers exercised by the competent resolution authority to: (i) write down, including to zero, any payment
(or delivery obligations) on the notes; (ii) convert the notes into ordinary shares of (a) the Issuer, (b) any group entity or
(c) any bridge bank or other instruments of ownership of such entities qualifying as common equity tier 1 capital; and/or (iii)
apply any other resolution measure including, but not limited to, any transfer of the notes to another entity, the amendment, modification
or variation of the terms and conditions of the notes or the cancellation of the notes. We refer to each of these measures as a
“
Resolution Measure
.” A “group entity” refers to an entity that is included in the corporate group
subject to a Resolution Measure. A “bridge bank” refers to a newly chartered German bank that would receive some or
all of our assets, liabilities and material contracts, including those attributable to our branches and subsidiaries, in a resolution
proceeding.
Furthermore,
by acquiring the notes, you:
|
·
|
are deemed irrevocably to have agreed, and you will agree:
(i) to be bound by, to acknowledge and to accept any Resolution Measure and any amendment, modification or variation of the terms
and conditions of the notes to give effect to any Resolution Measure; (ii) that you will have no claim or other right against us
arising out of any Resolution Measure; and (iii) that the imposition of any Resolution Measure will not constitute a default or
an event of default under the notes, under the senior indenture dated November 22, 2006 among us, Law Debenture Trust Company of
New York, as trustee, and Deutsche Bank Trust Company Americas, as issuing agent, paying agent, authenticating agent and registrar,
as amended and supplemented from time to time (the “
Indenture
”), or for the purposes of, but only to the fullest
extent permitted by, the Trust Indenture Act of 1939, as amended (the “
Trust Indenture Act
”);
|
|
·
|
waive, to the fullest extent permitted by the Trust Indenture
Act and applicable law, any and all claims against the trustee and the paying agent, the issuing agent and the registrar (each,
an “
indenture agent
”) for, agree not to initiate a suit against the trustee or the indenture agents in respect
of, and agree that the trustee and the indenture agents will not be liable for, any action that the trustee or the indenture agents
take, or abstain from taking, in either case in accordance with the imposition of a Resolution Measure by the competent resolution
authority with respect to the notes; and
|
|
·
|
will be deemed irrevocably to have: (i) consented to the
imposition of any Resolution Measure as it may be imposed without any prior notice by the competent resolution authority of its
decision to exercise such power with respect to the notes; (ii) authorized, directed and requested The Depository Trust Company
(“
DTC
”) and any direct
|
participant
in DTC or other intermediary through which you hold such notes to take any and all necessary action, if required, to implement
the imposition of any Resolution Measure with respect to the notes as it may be imposed, without any further action or direction
on your part or on the part of the trustee or the indenture agents; and (iii) acknowledged and accepted that the Resolution Measure
provisions described herein and in the “Resolution Measures” section of the accompanying prospectus are exhaustive
on the matters described herein and therein to the exclusion of any other agreements, arrangements or understandings between you
and the Issuer relating to the terms and conditions of the notes.
This
is only a summary
,
for more information please see the accompanying prospectus dated April 27
,
2016
,
including
the risk factors beginning on page 13 of such prospectus
.
Additional Terms Specific to the Notes
You should read this
pricing supplement together with the prospectus supplement dated July 31, 2015 relating to our Series A global notes of which these
notes are a part and the prospectus dated April 27, 2016. Delaware Trust Company, which acquired the corporate trust business of
Law Debenture Trust Company of New York, is the successor trustee of the notes. When you read the accompanying prospectus supplement,
please note that all references in the prospectus supplement to the prospectus dated July 31, 2015, or to any sections therein,
should refer instead to the accompanying prospectus dated April 27, 2016 or to the corresponding sections of such prospectus, as
applicable, unless otherwise specified or the context otherwise requires. You may access these documents on the website of the
Securities and Exchange Commission (the “
SEC
”) at
.
www.sec.gov as follows (or
if such address has changed, by reviewing our filings for the relevant date on the SEC website):
|
·
|
Prospectus supplement dated July 31, 2015:
|
http://www.sec.gov/Archives/edgar/data/1159508/000095010315006048/crt-dp58161_424b2.pdf
|
·
|
Prospectus dated April 27, 2016:
|
https://www.sec.gov/Archives/edgar/data/1159508/000119312516559607/d181910d424b21.pdf
Our Central Index
Key, or CIK, on the SEC website is 0001159508. As used in this pricing supplement, “
we
,” “
us
”
or “
our
” refers to Deutsche Bank AG, including, as the context requires, acting through one of its branches.
This pricing supplement,
together with the documents listed above, contains the terms of the notes and supersedes all other prior or contemporaneous oral
statements as well as any other written materials including preliminary or indicative pricing terms, correspondence, trade ideas,
structures for implementation, sample structures, brochures or other educational materials of ours. You should carefully consider,
among other things, the matters set forth in this pricing supplement and in “Risk Factors” in the accompanying prospectus
supplement and prospectus. We urge you to consult your investment, legal, tax, accounting and other advisers before deciding to
invest in the notes.
You may revoke
your offer to purchase the notes at any time prior to the time at which we accept such offer by notifying the applicable agent
.
We reserve the right to change the terms of
,
or reject any offer to purchase
,
the notes prior to their issuance
.
We will notify you in the event of any changes to the terms of the notes and you will be asked to accept such changes in connection
with your purchase of any notes
.
You may also choose to reject such changes
,
in which case we may reject your offer
to purchase the notes
.
Selected Risk
Considerations
An investment in the notes involves risks.
This section describes the most significant risks relating to the notes. For a complete list of risk factors, please see the accompanying
prospectus supplement and prospectus.
|
·
|
AFTER THE FIRST THREE YEARS
,
THE INTEREST PAYMENT WILL BE DETERMINED BY REFERENCE TO
THE 10
-
YEAR ICE SWAP RATE
— For the first three years, the notes will pay interest at a fixed rate of 5.75% per
annum. After the first three years, the Interest Rate will be equal to the 10-Year CMS Rate, subject to the Minimum Interest Rate
of 0.00% per annum. Because the Interest Rate after the first three years is a floating rate, you will be exposed to risks not
associated with a conventional fixed-rate debt instrument. These risks include fluctuation of the applicable Interest Rate and
the possibility that, for any Interest Period, you may receive a lesser amount of interest as compared to the amount for one or
more prior Interest Periods. Any payment on the notes is subject to our ability to satisfy our obligations as they become due.
|
|
·
|
AN INVESTMENT IN THE NOTES MAY BE RISKIER THAN AN INVESTMENT IN NOTES WITH A SHORTER TERM
—
The notes have a term of ten years. By purchasing notes with a longer term, you will have greater exposure to the risk that the
value of the notes may decline over time due to such factors as inflation, rising interest rates and/or changes in the ICE swap
rate yield curve. If market interest rates rise during the term of the notes, the Interest Rate on the notes may in the future
be lower than the interest rates for similar debt securities then prevailing in the market. If this occurs, you will not be able
to require the Issuer to redeem the notes and will, therefore, bear the risk of holding the notes and of earning a lower return
than you could earn on other investments until the Maturity Date.
|
|
·
|
THE NOTES ARE SUBJECT TO THE CREDIT OF DEUTSCHE BANK AG
— The notes are senior unsecured
obligations of Deutsche Bank AG and are not, either directly or indirectly, an obligation of any third party. Any payment(s) to
be made on the notes depends on the ability of Deutsche Bank AG to satisfy its obligations as they become due. An actual or anticipated
downgrade in Deutsche Bank AG’s credit rating or increase in the credit spreads charged by the market for taking Deutsche
Bank AG’s credit risk will likely have an adverse effect on the value of the notes. As a result, the actual and perceived
creditworthiness of Deutsche Bank AG will affect the value of the notes and, in the event Deutsche Bank AG were to default on its
obligations or become subject to a Resolution Measure, you might not receive any amount(s) owed to you under the terms of the notes
and you could lose your entire investment.
|
|
·
|
THE NOTES
MAY BE WRITTEN DOWN
,
BE CONVERTED INTO ORDINARY SHARES OR OTHER INSTRUMENTS OF OWNERSHIP OR BECOME SUBJECT TO OTHER RESOLUTION
MEASURES IN A GERMAN INSOLVENCY PROCEEDING OR IN THE EVENT OF THE IMPOSITION OF RESOLUTION MEASURES WITH RESPECT TO THE ISSUER
,
THE NOTES WOULD BE SATISFIED ONLY IF CERTAIN OTHER UNSECURED UNSUBORDINATED OBLIGATIONS OF THE ISSUER HAVE BEEN PAID IN FULL
.
YOU MAY LOSE SOME OR ALL OF YOUR INVESTMENT IF ANY SUCH MEASURE BECOMES APPLICABLE TO US
— Pursuant to the SRM Regulation,
the Resolution Act and other applicable rules and regulations described above under “Resolution Measures and Deemed Agreement,”
the notes are subject to the powers exercised by the competent resolution authority to impose Resolution Measures on us, which
may include: writing down, including to zero, any claim for payment on the notes; converting the notes into ordinary shares of
(i) the Issuer, (ii) any group entity or (iii) any bridge bank or other instruments of ownership of such entities qualifying as
common equity tier 1 capital; or applying any other resolution measure including, but not limited to, transferring the notes to
another entity, amending, modifying or varying the terms and conditions of the notes or cancelling the notes. The competent resolution
authority may apply Resolution Measures individually or in any combination.
|
The
Resolution Mechanism Act provides that, in a German insolvency proceeding of the Issuer, certain specifically defined senior unsecured
debt instruments would rank junior to, without constituting subordinated debt, all other outstanding unsecured unsubordinated obligations
of the Issuer and be satisfied only if all such other senior unsecured obligations of the Issuer have been paid in full. This prioritization
would also be given effect if Resolution Measures are imposed on the Issuer, so that obligations under debt instruments that rank
junior in insolvency as described above would be written down or converted into common equity tier 1 instruments before any other
senior unsecured obligations of the Issuer are written down or converted. A large portion of our liabilities consist of senior
unsecured obligations that either fall outside the statutory definition of debt instruments that rank junior to other senior unsecured
obligations according to the Resolution Mechanism Act or are expressly exempted from such definition.
Among
those unsecured unsubordinated obligations that are expressly exempted are money market instruments and senior unsecured debt instruments
whose terms provide that (i) the repayment or the amount of the repayment depends on the occurrence or non-occurrence of an event
which is uncertain at the point in time when the senior unsecured debt instruments are issued or is settled in a way other than
by monetary payment, or (ii) the payment of interest or the amount of the interest payments depends on the occurrence or non-occurrence
of an event which is uncertain at the point in time when the senior unsecured debt instruments are issued unless the payment of
interest or the amount of the interest payments solely depends on a fixed or floating reference interest rate and is settled by
monetary payment. This order of priority introduced by the Resolution Mechanism Act would apply in German insolvency proceedings
instituted, or when Resolution Measures are imposed, on or after January 1, 2017 with effect for debt instruments of the Issuer
outstanding at that time. In a German insolvency proceeding or in the event of the imposition of Resolution Measures with respect
to the Issuer, the competent regulatory authority or court would determine which of our senior debt securities issued under the
prospectus have the terms described in clauses (i) or (ii) above, referred to herein as the “
Structured Debt Securities
,”
and which do not, referred to herein as the “
Non
-
Structured Debt Securities
.”
We expect the notes
offered herein to be classified as Non
-
Structured Debt Securities
. In a German insolvency proceeding or in the event
of the imposition of Resolution Measures with respect to the Issuer, the unsecured unsubordinated obligations of the Issuer that
either fall outside the statutory definition of debt instruments that rank junior to other senior unsecured obligations or are
expressly exempted from such definition, including any Structured Debt Securities, are expected to bear losses after the Non-Structured
Debt Securities (including the notes) as described above.
The Resolution Mechanism Act could lead to increased losses for the
holders of the notes if insolvency proceedings were initiated or Resolution Measures imposed upon the Issuer
. Imposition of
a Resolution Measure would likely occur if we become, or are deemed by the competent supervisory authority to have become, “non-viable”
(as defined under the then applicable law) and are unable to continue our regulated banking activities without a Resolution Measure
becoming applicable to us. The Bank Recovery and Resolution Directive and the Resolution Act are intended to eliminate the need
for public support of troubled banks, and you should be aware that public support, if any, would only potentially be used by the
competent supervisory authority as a last resort after having assessed and exploited, to the maximum extent practicable, the resolution
tools, including the bail-in tool.
You may lose some or all of your investment in the notes if a Resolution Measure becomes
applicable to us
.
By
acquiring the notes, you would have no claim or other right against us arising out of any Resolution Measure and we would have
no obligation to make payments under the notes following the imposition of a Resolution Measure. In particular, the imposition
of any Resolution Measure will not constitute a default or an event of default under the notes, under the Indenture or for the
purposes of, but only to the fullest extent permitted by, the Trust Indenture Act. Furthermore, because the notes are subject to
any Resolution Measure, secondary market trading in the notes may not follow the trading behavior associated with similar types
of securities issued by other financial institutions which may be or have been subject to a Resolution Measure. In addition, secondary
market trading in the notes may not follow the trading behavior associated either with Structured Debt Securities issued by us
or with securities issued by other financial institutions that are not subject to the Resolution Mechanism Act or similar laws.
In
addition, by your acquisition of the notes, you waive, to the fullest extent permitted by the Trust Indenture Act and applicable
law, any and all claims against the trustee and the indenture agents for, agree not to initiate a suit against the trustee or the
indenture agents in respect of, and agree that the trustee and the indenture agents will not be liable for, any action that the
trustee or the indenture agents take, or abstain from taking, in either case in accordance with the imposition of a Resolution
Measure by the competent resolution authority with respect to the notes.
Accordingly
,
you may have limited or circumscribed
rights to challenge any decision of the competent resolution authority to impose any Resolution Measure
.
|
·
|
THE ISSUER
’
S ESTIMATED VALUE OF THE NOTES ON THE TRADE DATE WILL BE LESS THAN THE
ISSUE PRICE OF THE NOTES
— The Issuer’s estimated value of the notes on the Trade Date (as disclosed on the cover
of this pricing supplement) is less than the Issue Price of the notes. The difference between the Issue Price and the Issuer’s
estimated value of the notes on the Trade Date is due to the inclusion in the Issue Price of the agent’s commissions, if
any, and the cost of hedging our obligations under the notes through one or more of our affiliates. Such hedging cost includes
our or our affiliates’ expected cost of providing such hedge, as well as the profit we or our affiliates expect to realize
in consideration for assuming the risks inherent in providing such hedge. The Issuer’s estimated value of the notes is determined
by reference to an internal funding rate and our pricing models. The internal funding rate is typically lower than the rate we
would pay when we issue conventional debt securities on equivalent terms. This difference in funding rate, as well as the agent’s
commissions, if any, and the estimated cost of hedging our obligations under the notes, reduces the economic terms of the notes
to you and is expected to adversely affect the price at which you may be able to sell the notes in any secondary market. In
|
addition, our internal pricing
models are proprietary and rely in part on certain assumptions about future events, which may prove to be incorrect. If at any
time a third party dealer were to quote a price to purchase your notes or otherwise value your notes, that price or value may differ
materially from the estimated value of the notes determined by reference to our internal funding rate and pricing models. This
difference is due to, among other things, any difference in funding rates, pricing models or assumptions used by any dealer who
may purchase the notes in the secondary market.
|
·
|
IF THE 10-YEAR ICE SWAP RATE CHANGES
,
THE VALUE OF YOUR NOTES MAY NOT CHANGE IN THE SAME
MANNER
— Your notes may trade quite differently from other instruments linked or related to the 10-Year ICE Swap Rate.
Changes in the 10-Year Ice Swap Rate may not result in a comparable change in the value of your notes.
|
|
·
|
PAST PERFORMANCE OF THE 10
-
YEAR ICE SWAP RATE IS NO GUIDE TO FUTURE PERFORMANCE
—
The actual performance of the 10-Year ICE Swap Rate over the term of the notes may bear little relation to the historical performance
of the 10-Year ICE Swap Rate. We cannot predict the future performance of the 10-Year ICE Swap Rate or whether the performance
of the 10-Year ICE Swap Rate will result in any interest payments after the first three years.
|
|
·
|
ASSUMING NO CHANGES IN MARKET CONDITIONS AND OTHER RELEVANT FACTORS, THE PRICE YOU MAY RECEIVE
FOR YOUR NOTES IN SECONDARY MARKET TRANSACTIONS WOULD GENERALLY BE LOWER THAN BOTH THE ISSUE PRICE AND THE ISSUER’S ESTIMATED
VALUE OF THE NOTES ON THE TRADE DATE
— While the payment(s) on the notes described in this pricing supplement is based
on the full Principal Amount of notes, the Issuer’s estimated value of the notes on the Trade Date (as disclosed on the cover
of this pricing supplement) is less than the Issue Price of the notes. The Issuer’s estimated value of the notes on the Trade
Date does not represent the price at which we or any of our affiliates would be willing to purchase your notes in the secondary
market at any time. Assuming no changes in market conditions or our creditworthiness and other relevant factors, the price, if
any, at which we or our affiliates would be willing to purchase the notes from you in secondary market transactions, if at all,
would generally be lower than both the Issue Price and the Issuer’s estimated value of the notes on the Trade Date. Our purchase
price, if any, in secondary market transactions would be based on the estimated value of the notes determined by reference to (i)
the then-prevailing internal funding rate (adjusted by a spread) or another appropriate measure of our cost of funds and (ii) our
pricing models at that time, less a bid spread determined after taking into account the size of the repurchase, the nature of the
assets underlying the notes and then-prevailing market conditions. The price we report to financial reporting services and to distributors
of our notes for use on customer account statements would generally be determined on the same basis. However, during the period
of approximately three months beginning from the Trade Date, we or our affiliates may, in our sole discretion, increase the purchase
price determined as described above by an amount equal to the declining differential between the Issue Price and the Issuer’s
estimated value of the notes on the Trade Date, prorated over such period on a straight-line basis, for transactions that are individually
and in the aggregate of the expected size for ordinary secondary market repurchases.
|
In addition to the factors discussed
above, the value of the notes and our purchase price in secondary market transactions after the Trade Date, if any, will vary based
on many economic and market factors, including our creditworthiness, and cannot be predicted with accuracy. These changes may adversely
affect the value of your notes, including the price you may receive in any secondary market transactions. Any sale prior to the
Maturity Date could result in a substantial loss to you. The notes are not designed to be short-term trading instruments. Accordingly,
you should be able and willing to hold your notes to maturity.
|
·
|
THE NOTES WILL NOT BE LISTED AND THERE WILL LIKELY BE LIMITED LIQUIDITY
— The notes
will not be listed on any securities exchange. There may be little or no secondary market for the notes. We or our affiliates intend
to act as market makers for the notes but are not required to do so and may cease such market making activities at any time. Even
if there is a secondary market, it may not provide enough liquidity to allow you to sell the notes when you wish to do so or at
a price advantageous to you. Because we do not expect other dealers to make a secondary market for the notes, the price at which
you may be able to sell your notes is likely to depend on the price, if any, at which we or our affiliates are willing to buy the
notes. If, at any time, we or our affiliates do not act as market makers, it is likely that there would be little or no secondary
market for the notes. If you have to sell your notes prior to maturity, you may not be able to do so or you may have to sell them
at a substantial loss, even in cases where the 10-Year ICE Swap Rate has increased since the Trade Date.
|
|
·
|
MANY ECONOMIC AND MARKET FACTORS WILL AFFECT THE VALUE OF THE NOTES
— While we expect
that, generally, the performance of the 10-Year ICE Swap Rate will affect the value of the notes more
|
than any other single factor,
the value of the notes prior to maturity will also be affected by a number of other factors that may either offset or magnify each
other, including:
|
·
|
the expected volatility of the 10-Year ICE Swap Rate;
|
|
·
|
changes in the ICE swap rate yield curve;
|
|
·
|
the time remaining to the maturity of the notes;
|
|
·
|
trends relating to inflation;
|
|
·
|
interest rates and yields in the markets generally;
|
|
·
|
geopolitical conditions and economic, financial, political, regulatory or judicial events that
affect the 10-Year ICE Swap Rate or the markets generally;
|
|
·
|
supply and demand for the notes; and
|
|
·
|
our creditworthiness, including actual or anticipated downgrades in our credit ratings.
|
|
·
|
TRADING AND OTHER TRANSACTIONS BY US
OR OUR AFFILIATES
IN THE DERIVATIVE MARKETS MAY IMPAIR THE VALUE OF THE NOTES
— We or our affiliates expect to hedge our exposure from
the notes by entering into derivative transactions, such as over-the-counter options, futures or exchange-traded instruments. We
or our affiliates may also engage in trading in instruments linked or related to the 10-Year ICE Swap Rate on a regular basis as
part of our or their general broker-dealer and other businesses, for proprietary accounts, for other accounts under management
or to facilitate transactions for customers, including block transactions. Such trading and hedging activities may adversely affect
the 10-Year ICE Swap Rate and, therefore, make it less likely that you will receive a positive return on your investment in the
notes. It is possible that we or our affiliates could receive substantial returns from these hedging and trading activities while
the value of the notes declines. We or our affiliates may also issue or underwrite other securities or financial or derivative
instruments with returns linked or related to the 10-Year ICE Swap Rate. To the extent we or our affiliates serve as issuer, agent
or underwriter for such securities or financial or derivative instruments, our or our affiliates’ interests with respect
to such products may be adverse to those of the holders of the notes. Introducing competing products into the marketplace in this
manner could adversely affect the 10-Year ICE Swap Rate and the value of the notes. Any of the foregoing activities described in
this paragraph may reflect trading strategies that differ from, or are in direct opposition to, investors’ trading and investment
strategies related to the notes.
|
|
·
|
WE
,
OUR AGENTS OR OUR AFFILIATES MAY PUBLISH RESEARCH
,
EXPRESS OPINIONS OR PROVIDE
RECOMMENDATIONS THAT ARE INCONSISTENT WITH INVESTING IN OR HOLDING THE NOTES
.
ANY SUCH RESEARCH
,
OPINIONS OR RECOMMENDATIONS
COULD ADVERSELY AFFECT THE 10
-
YEAR ICE SWAP RATE AND THE VALUE OF THE NOTES
— We, our agents or our affiliates
may publish research from time to time on financial markets and other matters that could adversely affect the 10-Year ICE Swap
Rate and the value of the notes, or express opinions or provide recommendations that are inconsistent with purchasing or holding
the notes. Any research, opinions or recommendations
expressed
by us, our agents or
our affiliates may not be consistent with each other and may be modified from time to time without notice. You should make your
own independent investigation of the merits of investing in the notes and the
Interest Rates
to which the notes are linked
.
|
|
·
|
POTENTIAL CONFLICTS OF INTEREST
— We and our affiliates play a variety of roles in
connection with the issuance of the notes, including acting as calculation agent, hedging our obligations under the notes and determining
the Issuer’s estimated value of the notes on the Trade Date and the price, if any, at which we or our affiliates would be
willing to purchase the notes from you in secondary market transactions. In performing these roles, our economic interests and
those of our affiliates are potentially adverse to your interests as an investor in the notes.
|
Deutsche Bank AG, London Branch
is the Issuer of the notes and the calculation agent for the notes. While Deutsche Bank AG, London Branch will act in good faith
and in a commercially reasonable manner in making all determinations with respect to the notes, including the amount of interest
payable on each Interest Payment Date, there can be no assurance that any determinations made by Deutsche Bank AG, London Branch
in its capacity as the calculation agent for the notes will not affect the value of the notes. Because determinations made by Deutsche
Bank AG, London Branch in such capacity may affect the interest payments due on each Interest Payment Date, potential conflicts
of interest may exist between Deutsche Bank AG, London Branch and you, as a holder of the notes.
|
·
|
TREATED AS VARIABLE RATE DEBT INSTRUMENTS
— In the opinion of our special tax counsel,
Davis Polk & Wardwell LLP, the notes should be treated for U.S. federal income tax purposes as “variable rate debt instruments”
that provide for a single fixed rate followed by a qualified floating rate (“
QFR
”).
|
It is expected that the notes
will be issued with original issue discount (“
OID
”), which will be taxed over the term of the notes according
to a constant-yield method based on a compounding of interest, regardless of your method of tax accounting. In order to determine
the amount of qualified stated interest (“
QSI
”) and OID in respect of the notes, an equivalent fixed rate debt
instrument must be constructed. The equivalent fixed rate debt instrument is constructed in the following manner: (i) first, the
initial fixed rate is converted to a QFR that would preserve the fair market value of the notes, and (ii) second, each QFR (including
the QFR determined under (i) above) is converted to a fixed rate substitute (which will generally be the value of that QFR as of
the issue date of the notes). Under applicable Treasury regulations, the notes will generally be treated as providing for QSI at
a rate equal to the lowest rate of interest in effect at any time under the equivalent fixed rate debt instrument, and any interest
in excess of that rate will generally be treated as part of the stated redemption price at maturity and, therefore, as giving rise
to OID. Whether the notes have been issued with OID, and the amount thereof, cannot be determined prior to the Settlement Date.
If the notes are issued with OID, information regarding the annual accrual of OID on the notes will be filed with the Internal
Revenue Service on a Form 8281 and will be made publicly available. Please review the section of the accompanying prospectus supplement
entitled “United States Federal Income Taxation — Tax Consequences to U.S. Holders — OID Notes” for a further
discussion of the taxation of OID.
It is expected that all interest
payments during the last seven years that the notes are outstanding will be treated as
QSI
, and that a portion of each
interest payment made during the first three years that the notes are outstanding will be QSI, with the remainder treated as OID,
which will be taxed as discussed above. QSI will be taxable to you at the time it accrues or is received, in accordance with your
method of accounting for U.S. federal income tax purposes.
If you purchase a note at a
price that is greater or less than the issue price, you will be considered to have purchased the note with “acquisition premium”
or “market discount,” respectively. See “United States Federal Income Taxation — Tax Consequences to U.S.
Holders — Market Discount” and “United States Federal Income Taxation — Tax Consequences to U.S. Holders
— Acquisition Premium and Amortizable Bond Premium,” as applicable, on page PS-40 of the accompanying prospectus supplement.
The discussions above and in
the accompanying prospectus supplement do not address the consequences to taxpayers subject to special tax accounting rules under
Section 451(b).
Withholding under legislation
commonly referred to as “FATCA” may apply to amounts treated as interest paid with respect to the notes, as well as
to payments of gross proceeds of a taxable disposition, including redemption at maturity, of a note, unless certain reporting and
due diligence requirements have been satisfied. However, under a recent IRS notice, this regime will not apply to payments of gross
proceeds (other than any amount treated as interest (including OID)) with respect to dispositions occurring before January 1, 2019.
You should consult your tax adviser regarding the potential application of FATCA to the notes.
If you are a non-U.S. holder,
you will not be subject to U.S. federal income tax (including withholding tax), provided that you fulfill certain certification
requirements and certain other conditions are met. See “United States Federal Income Taxation — Tax Consequences to
Non-U.S. Holders” on page PS-42 of the accompanying prospectus supplement.
You should review carefully
the section of the accompanying prospectus supplement entitled “United States Federal Income Taxation.” The preceding
discussion, when read in combination with that section, constitutes the full opinion of our special tax counsel regarding the material
U.S. federal income tax consequences of owning and disposing of the notes.
Under current law, the United
Kingdom will not impose withholding tax on payments made with respect to the notes.
For a discussion of certain
German tax considerations relating to the notes, you should refer to the section in the accompanying prospectus supplement entitled
“Taxation by Germany of Non-Resident Holders.”
You should consult your tax
adviser regarding the U
.
S
.
federal tax consequences of an investment in the notes
,
as well as tax consequences
arising under the laws of any state
,
local or non
-
U
.
S
.
taxing jurisdiction
.