Metro Bank Bondholders Made £600 Million Funding Offer, FT Says

A group of Metro Bank Holdings Plc’s bondholders approached the lender on Monday with a £600 million ($730 million) funding offer, according to the Financial Times.

(Bloomberg) — A group of Metro Bank Holdings Plc’s bondholders approached the lender on Monday with a £600 million ($730 million) funding offer, according to the Financial Times.

Metro Bank acknowledged the offer on Friday without accepting it, the FT said, citing two people familiar with the matter.

The UK lender has two outstanding debt instruments. One is a £350 million senior bail-in bond and the other a £250 million junior tier 2 note. The bail-in bond, which reversed most of its earlier losses on the report, matures in 2025 and the tier 2 note in 2028.

Metro Bank said Thursday it was weighing several options as it looks to shore up its balance sheet, including a securitization as well as asset and loan sales. The announcement sent its shares plunging as much as 25% before rebounding.

Its capital needs have been increasingly in focus since it announced in September that the Prudential Regulation Authority informed the lender it had to do more work before it was allowed to use internal risk models for its mortgage business. The bank said at the time it was looking at “how best to optimize its capital resources.”

The company, which has hired Morgan Stanley to advise it on its options, had £22 billion of total assets at the end of June. It currently has a market value of about £75 million, compared with £3.2 billion at the end of 2017. Its total short and long-term debt amounted to £4.9 billion at the end of 2022, based on data compiled by Bloomberg.

A spokesperson for Metro Bank declined to comment.

Willett Advisors LLC, the investment arm for the personal and philanthropic assets of Michael Bloomberg, founder and majority owner of Bloomberg News parent Bloomberg LP, held shares in Metro Bank as of November 2021, according to a regulatory filing.

–With assistance from Tasos Vossos.

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