Barclays Share Price: Seeking Backing for ₤5.8 Billion Rights Issue

on Aug 12, 2013
Listen Monday, August 12th: According to media reports, Barclays (LON:BARC) is planning to hold informal meetings with major institutional investors to secure backing for its ₤5.8 billion rights issue scheduled for mid-September.

The UK bank is due to release its prospectus for the deal this week and hopes to cement support from its key investors. The ₤5.8 billion rights issue will be the largest amount a UK financial institution has tried to raise since the financial crisis. The new shares will be offered to existing investors on a one-for-four basis, at 185.00p apiece – a 40 percent discount to Barclays’ share price prior to the rights issue announcement. A total of 13 banks will be acting as underwriters for the deal with Barclays’ investment banking unit assuming the role of a global coordinator (Thirteen Banks to Work on ₤5.8 Billion Rights Issue ).

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In order to meet the three percent leverage ratio required by the Bank of England (BOE), Barclays was told in June by the Prudential Regulation Authority that it needed an extra ₤12.8 billion of capital. In addition to the rights issue, the UK bank intends to sell ₤2 billion of special high-interest paying bonds. The issue will be scrapped if the bank hits trouble.

**Barclays Needs ₤10.3 Billion More to Meet Basel III Requirements**
Barclays will need to raise about €12.0 billion (₤10.3 billion) more to meet the new European banking regulations, according to a report published by Royal Bank of Scotland (Eurozone Banks Need To Unload €3.2 Trillion in Assets, RBS Says ).
The report has concluded that European banks will have to shed €3.2 trillion (₤2.75 trillion) of assets by 2018 with 80 percent of the burden to fall on small lenders. “[Eurozone banks] are still too large, at €32tn, over three times the size of the economy. They need to be leaner and to raise more capital,” RBS analysts have said.

**Barclays Extends Deadline for Bangladeshi Banks**
!m[UK Lender Needs ₤10.3 Billion More to Meet Basel III Criteria](/uploads/story/4741/thumbs/pic-1_inline.jpg)
Barclays has extended the deadline for closing the retail accounts of several Bangladeshi banks with it on their request. The UK bank announced in June that it would stop servicing all retail accounts of banks in the country because they didn’t match its new eligibility criteria.

Officials of the Bangladeshi banks concerned have sought an extension to the August 10 deadline to have more time to reach agreements with other financial institutions for receiving services offered by Barclays.
**“Barclays had given us an Aug 10 deadline to close accounts, but now after a fresh appeal to extend**
**the deadline, they have stretched it to Sept 12,” said Pubali Bank Managing Director Helal Ahmed Chowdhury. **
**Barclays’ share price was 285.25p as of 12.08.2013, 11.44 BST.**


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