Barclays PLC Perp AT1 at 8.3% SGD

Phillip Bond Desk  |   30 Jun 2022  |    175 views

Barclays PLC have issued a NC5.5 perpetual subordinated contingent convertible bonds at a final price guidance of 8.3%. Barclays PLC (the issuer) is rated Baa2 (positive)/ BBB (positive)/ A (positive) by Moody’s/S&P/Fitch. These bonds issuance will also be expected to have a rating of Ba2/ BBB- by Moody’s and Fitch. The bonds are callable from 15 September 2027 and each fifth anniversary date thereafter with the first reset date on 27 December 2027. If not called on 15 December 2027, these bonds will be reset at the prevailing 5 years SORA-OIS plus the initial margin of 5.641%. The coupon payment will be made quarterly in arrears on 15 March, 15 June, 15 September and 15 December each year with the first payment commencing on the 15 December 2022. Do note that this bonds come with a capital adequacy trigger if in the event where Barclay’s CET 1 ratio falls below 7%, these note may be converted into common shares of the bank  at a conversion price of SGD 2.78 a share.

 

Barclays is a British universal bank who support individuals and small businesses through consumer banking services, and larger businesses and institutions through corporate and investment banking services. It is primarily listed on the London Stock Exchange (ticker: BARC) and is a constituent of the FSTE 100 Index. It also has a secondary listing on the New York Stock Exchange (ticker: BCS). Barclays operates in 2 divisions namely Barclays UK (mainly provides consumer banking services), Barclays International (provides corporate/investment banking services) and they are supported by their service company Barclays Execution Services. Barclays UK has a market cap of £26.4bn as at 30 June 2022 with its main source of revenue generated from its Global Markets sector (29%), followed by its personal banking sector (17.9%), Investment banking sector (16.8%) and consumer, cards and payments sector (15%).

 

In terms of some financial overview on the bank, as of 1Q2022 (31st March 2022), Barclays PLC had reported an income increased by 10% YoY (from £5.9bn in 1Q2021 to £6.5bn in 1Q2022) and its total cost has increased by 14.8% YoY (from £3.5bn in 1Q2022 to £4.1bn in 1Q2022). The increase was mainly driven up by the litigation and conduct charges of £523mn which resulted in the cost/income ratio to increase by 2% YoY (from 61% in 1Q2021 to 63% in 1Q2022). Currently Barclays Bank’s CET1 ratio stood at 13.8% which is within their target range of 13-14%.

Related Articles

MAS announced first sovereign green bond at 3.04%.

For the first time, MAS have announced its first sovereign green bond issuance at an Final Price Guidance of 3.04%

Shawn Sng  |   04 Aug 2022

What are SGS bonds and T-bills?

A relatively safer investment option for newer investor who are looking to explore in the fixed income market.

Shawn Sng  |   26 Jul 2022

Societe Generale 8.25% Perp AT1 SGD

Societe Generale have just announced the issuance of AT1 subordinated notes at an final price guidance of 8.25%.

Phillip Bond Desk  |   07 Jul 2022

Disclaimers


These commentaries are intended for general circulation. It does not have regard to the specific investment objectives, financial situation and particular needs of any person who may receive this document. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of the units and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. Investors may wish to seek advice from a financial adviser before investing. In the event that investors choose not to seek advice from a financial adviser, they should consider whether the investment is suitable for them.

The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the "Research") contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries.

Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned.

?>