Barclays PLC Perp AT1 at 8.3% SGD

Shawn Sng  |   30 Jun 2022  |    719 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%.

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