2nd Oct 2019 14:21
(Alliance News) - Shares in Metro Bank PLC rose sharply on Wednesday after the lender launched a GBP350 million senior non-preferred transaction at a price of 9.5%.
The firm's stock was trading 26% higher at 227.00 pence each in London on Wednesday afternoon.
Metro Bank explained: "The transaction will include an option for Metro Bank to substitute the issuer upon the occurrence of a Newco scheme".
Metro Bank said it "appreciates the strong support shown by investors in today's transaction" as books for MREL issuance are now in excess of GBP550 million from more than 55 accounts.
Earlier on Wednesday, the company said it launched a GBP300 million senior non-preferred transaction transaction with books totalling GBP475 million.
In September, the challenger bank postponed an MREL issuance citing market conditions, despite a "broad number" of investors showing an interest.
MREL stands for minimum requirement for own funds and eligible liabilities and relates to EU solvency legislation.
The Financial Times news had previously reported that Metro Bank had been forced to withdraw a GBP200 million to GBP250 million bond offering, after only received orders for GBP175 million.
The news on Wednesday came just hours after the bank, which was recently demoted from the FTSE 250 index, confirmed that its founder Vernon Hill will step down as chair before the end of December.
Hill - who founded the firm in the UK in 2010, having found success with the Metro Bank formula in the US - explained that the lender would be better served by having an independent chair.
By Eric Cunha; [email protected]
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