Barclays Sells Largest Structured Note Tied to Facebook Shares

Barclays Plc (BARC) sold $25.2 million of one-year notes tied to shares of Facebook Inc. (FB), the largest such offering since the stock started trading publicly 13 months ago.

The securities, issued June 13, yield three times the gains of the stock with a maximum of 32.75 percent, and all capital at risk, Barclays said in a prospectus filed with the Securities and Exchange Commission. Bank of America Corp. distributed the notes for a 1.75 percent commission.

Facebook, the social networking company started by Mark Zuckerberg in his Harvard University dorm room, has fallen 9.1 percent this year to $24.21.

“Average user growth in developed markets such as North America continues to decelerate,” Carlos Kirjner, an analyst at Sanford C. Bernstein & Co. in New York said in a telephone interview.

Sanford Bernstein lowered its 12-month target price for the stock to $27 on Feb. 12 from $33.

The security is one of eight offerings since Aug. 28 linked to the Menlo Park, California-based company, according to data compiled by Bloomberg.

Brandon Ashcraft, a spokesman for Barclays in New York, declined to comment on the note.

Banks create structured notes by packaging debt with derivatives to offer customized bets to retail investors while earning fees and raising money. Derivatives are contracts whose value is derived from stocks, bonds, commodities and currencies, or events such as changes in interest rates or the weather.

To contact the reporter on this story: Kevin Dugan in New York at kdugan4@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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