Shares of UK's Metro Bank up 26% after securing fresh capital

cnbc.com:

LONDON — Shares of the U.K.'s Metro Bank were sharply higher Monday morning, after the lender on late Sunday announced it had secured a £325 million ($395.6 million) capital raise and £600 million in debt refinancing.

The capital raise includes £150 million of new equity and £175 million of «MREL» issuance, a form of bail-in debt. The bank said it will also undergo a debt restructuring that will extend the maturity of its borrowings. Holders of its £250 million of tier 2 bonds, due in June 2028, will take a 40% haircut.

Metro Bank shares were 25.5% higher at 10:28 a.m. London time.

The deal comes after investors were last week spooked by news that the bank was searching for a large financing package. Crunch talks took place over the weekend, with several large banks approached for potential offers, according to multiple reports.

The raise was led by Colombian banker and real estate developer Jaime Gilinski Bacal — an existing shareholder through Spaldy Investments Limited — which contributed £102 million to the initiative. Gilinski Bacal is now the bank's controlling shareholder with a 53% stakehold.

«The opportunity to become the bank's major shareholder is driven by my belief in the need for physical and digital banking underpinned by a focus on exceptional customer service,» he said in a statement.

«I believe that the package announced today enables the Bank to pursue growth and build on the foundational work undertaken over the past three years.»

Metro Bank said the raise will provide the opportunity to shift towards specialist mortgages and commercial lending, as well as continuing growth in current accounts and raising deposits.

The bank further said it is in discussions over the sale of up to £3 billion of