Metro Bank urgent fundraise plans spark sharp sell-off

investmentweek.co.uk:

The bank said it continues to consider «how to best enhance its capital resources, with particular regard to the £350m senior non-preferred notes due in October 2025. 

CEO Daniel Frumkin and chair Robert Sharpe have both been summoned to meet with the Bank of England's Prudential Regulation Authority and Financial Conduct Authority today (5 October), according to a report by the FT.  

Metro Bank has confirmed it is „evaluating the merits of a range of options“ to refinance its debt, after Sky News revealed the bank was seeking to raise hundreds of millions of pounds in debt and equity to shore up its balance sheet, which sent its shares plummeting 30% in mid- morning trading.

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Speculation about its financial position prompted Metro Bank to release a statement to the stock exchange, which stated the bank is „evaluating the merits of a range of options“, including a combination of equity issuance, debt issuance and /or refinancing and asset sales. 

»No decision has been made on whether to proceed with any of these options," the statement said.

The bank said it continues to consider «how to best enhance its capital resources», with particular regard to the £350m senior non-preferred notes due in October 2025. 

According to the Sky News report, a share sale of up to £100m could be on the table, adding the bank has asked advisers at Morgan Stanley to work on a deal with the hopes of raising roughly £250m in MREL to service an outstanding MREL debt of £350m.

MREL is the minimum requirement for own funds and eligible liabilities.

Reuters had this morning suggested the bank could be seeking to raise as much as £600m across debt and equity,