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The next thing to look out for is signs of instability, as in large withdrawals, as then the BoE/PRA will need to step in to restore confidence and we’re taking a 100% haircut.

I read it as do other loans until they get AIRB accreditation, at which point they can operate with lower regulatory capital.

The biggest plus is we’re all saved from a total wipeout that the PRA was planning for. But buggered all the same, just less so.

Can we all agree to give the board hell at the next AGM?

The bit that should help pull this up is the 40% haircut in some of the bonds. Plus the £1bn reduced RWA, although they’ll then get pricier loans. They need the AIRB accreditation.

The 14 and 12 percent coupons on the new debt will pull this down.

Equity is priced too low at 30p, retail investors are unlikely to see this.

Best for retail investors to get an offer from a rival now we have a floor.

Hard to call opening.

Good news - we have a floor on valuation

Bad news - we’re diluted like crazy

It’ll still be ugly.

.

https://twitter.com/MrMBrown/status/1711092420073406700

PRA are getting an idea on potential offers. So, not quite the fire sale some people hope it’ll be. If Metro agree an offer with the bondholders then PRA will have a hard time trying to force a sale for £1. Forget the retail investors, the larger debt and equity investors will take issue. The PRA is sort of undermining a UK Bank here, this is uncharted territory, before anyone claims SVB or something, remember this is a solvent bank which has been profitable for 3 quarters.

I saw somewhere earlier Shawbrook bank submitted another bid, a sort of merger between this and Co-Op.

Here’s to hoping the bondholders decide to work with the board to keep it independent.

SVB didn’t have a big branch presence in the UK.

It’s not a good look. Metro Bank is still solvent and is profitable at the moment. Of course if depends on a lot of things but it screams don’t invest in the UK. Especially not in the financial services.

Having any position in this is uncomfortable. Short, long, debt, equity, being an employee, a customer. Heck even being a dog walking past the branch would be uncomfortable, no more doggy biscuits.

Technically it’s the firm he works for but hey ho

https://news.sky.com/story/santander-uk-drafts-in-osborne-to-advise-on-metro-bank-offer-12980239

They’ll be signalling UK financial sector is not worth the risk if they did that to a solvent bank. With that in that table Metro might as well take the Bondholders offer.

This is better because the PRA won’t want to annoy bondholders and shareholders by forcing the sale of a bank. It’ll be catastrophic for investment in the UK banking sector.

PRA has hired EY to gauge offers according to The Guardian (https://www.theguardian.com/business/2023/oct/08/bank-of-england-sounds-out-buyers-for-metro-bank-including-natwest)

The buyer will demand total ownership. There’s no doubt about it.

JP Morgan said no

According to Bloomberg everything’s still on the table, including the Bondholders deal and Asset sales. This may not end tomorrow. We might just get a plan on what the future looks like.

Also depends on what concessions the BoE/PRA give the acquirer. The BoE/PRA might not want the optics of a failed bank, so there might be a floor higher than £1.