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It'll get nodded through because the alternative is the risk of total wipeout. The media will pounce to drive a few more clicks. The BoE/PRA will be watching so they can say we didn't get a bank failure on our watch and we stepped in long before and then all get knighted and sponge off that status.
It’s simpler than that. Metro approached investors about a potential raise apparently and they used that to short this and flood the news with rumours.
Don’t get me wrong, I hope the rest of them duplicitous clowns get it as well. This has all been BS.
Are going to have a hard time closing. Existing shareholders are underwater and have hope for the future, so they might not want to sell.
This means shorters either push to close, pushing up the price, or hold and pay to keep the position open.
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.
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.