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(Alliance News) - Metro Bank PLC on Friday said it has agreed to a temporary adjustment of its existing GBP250 million 5.5% tier 2 notes conditional upon the establishment of a holding company.
The London-based bank's agreement is with the Bank of England's Resolution Directorate, which oversees the orderly arrangement of a bank's liabilities in the event of a bank's failure.
The adjustment allows the notes to remain eligible for Metro's minimum requirement for own funds and eligible liabilities until June 2025, while remaining at the operating company.
The MREL requirement is set by resolution authorities to ensure a bank retains sufficient instruments to enable the implementation of a resolution strategy.
The holding company needs to be established by June 2023. The company said it is "progressing well and will become the new resolution entity post-implementation".
The adjustment has been granted in line with the statement in the Bank of England's MREL policy statement that it may make temporary, time-limited adjustments to the implementation of its policy change on MREL debt eligibility with respect to individual firms.
Shares in Metro Bank were trading 2.7% higher at 102.23 pence each in London on Friday afternoon.
By Chris Dorrell, Alliance News reporter
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