Metro Bank sees 75% support from noteholders for debt refinancing

By Marisa Wong

Los Angeles, Oct. 11 – Metro Bank Holdings plc announced the receipt of over 75% support commitments from tier 2 and senior noteholders for its previously proposed debt refinancing, according to a press release on Thursday.

Holders of over 75% by value of the £250 million fixed-rate reset callable subordinated notes due June 2028 issued by Metro Bank plc and holders of over 75% by value of the £350 million fixed-rate senior notes due October 2025 issued by Metro Bank Holdings have entered into a lock-up agreement to support the transaction set out in an announcement from Oct. 8.

Consequently, the required number of holders of both the tier 2 instruments and the senior instruments are committed to support written resolutions to approve the debt refinancing.

Support for the debt refinancing is one of the key pillars to implementation of the transaction announced Oct. 8, namely a capital package comprised of a £325 million capital raise and a £600 million debt refinancing.

Specifically, the debt refinancing involves the following:

• 40% haircut on the notional amount of the tier 2 instrument, rising to 45% if 75% (by value) of holders of the tier 2 notes do not enter into lock-up agreements supporting the debt refinancing by Oct. 13, resulting in an increase to the company’s CET1 capital of up to £100 million (assuming the 40% haircut);

• Exchange of the balance of the notional amount of the tier 2 instrument on a par-for-par basis for a new subordinated 10-year non-callable five-year tier 2 instrument to be issued by Metro Bank Holdings with a coupon of 14%, a call date of April 2029 and a maturity date of April 2034; and

• 100% (falling to 95% if 75% (by value) of holders of the senior notes do not enter into lock-up agreements supporting the debt refinancing by Oct. 13) exchange of the existing senior instruments on a par-for-par basis into new senior instruments.

Subject to completion of the transaction, all holders will be entitled to early participation incentives.

The bank has appointed Kroll Issuer Services to act as lock-up agent (attn.: David Shilson; metrobank@is.kroll.com; +44 20 7704 0880).

London-based Metro Bank is a retail and commercial bank.

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