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Bond Market News
Metro Bank’s Bonds Drop on Reports of Discussions for Debt Restructuring and Equity Injection
October 9, 2023
Metro Bank Holdings saw its sterling-denominated bonds drop 14-20 points on Friday on reports that it has reached an agreement for a £925mn financial package consisting of a £325mn capital raise, and refinancing of £600mn. Last week, it was reported that Metro Bank was in discussions with its bondholders and shareholders for a debt restructuring and new equity injection respectively. The debt restructuring proposal would extend the maturity of its outstanding senior debt and convert the subordinated debt into equity. Thus, its £250mn ($306mn) tier 2 notes would be converted into equity and the maturity of £350mn of senior bonds due 2025 would be extended. Initially, existing bond and equity holders were considering whether to inject more money into the bank given the growth challenges and a risk of wipe-out if Metro Bank’s situation deteriorates. Metro Bank at the time was considering other options including selling mortgage assets in order to free up capital.
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