Caius Capital (Caius), an alternative investment manager focused on distressed and special situations, led a group of creditors in agreeing to provide a financing package aimed at boosting the balance sheet of the UK’s Metro Bank, according to a report by Bloomberg.
According to reports, a number of hedge funds agreed to the sale of an additional £175m worth of Metro bank bonds, with Caius among those who signed up to the sale, having earlier purchased a chunk of the bank’s senior debt at a discount.
The rescue deal allows creditors to exchange outstanding debts, which were originally due in 2025 for debt due in 2028, allowing them to avoid expected losses.
Having bought the banks ones at below their face value Caius is set to score a potential profit from the deal. Not only has the price soared to 88 pence on the pound — up from roughly 57p on Friday – the bonds will be also be paid at par when they’re exchanged for the longer dated notes, adnd the coupon, which was 9.5%, will be boosted to 12%.
