Bloomberg the Company

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Follow Us

Industry Products

Barclays Plan to Issue CoCos Said to Meet Investor Resistance

Don't Miss Out —
Follow us on:

April 17 (Bloomberg) -- Barclays Plc, Britain’s second-biggest lender, is facing shareholder resistance to plans to issue contingent convertible bonds, or CoCos, that may dilute existing investors, people with knowledge of the talks said.

The Association of British Insurers, which represents companies with 1.8 trillion pounds ($2.8 trillion) of assets including Barclays' shares, issued a so-called amber top over the plan, a method of highlighting concern that the proposal may not be in investors’ interests, said the people, who asked not to be identified because the talks are private. It isn’t an instruction to vote against the resolution.

Under the plan, Barclays would seek approval to issue new stock equivalent to about 26 percent of its existing capital, according to the agenda for London-based Barclays’s annual general meeting on April 25. The new shares would only be issued if the CoCos converted into equity should the lender’s core Tier 1 capital ratio fall below 7 percent of assets weighted by risk.

Contingent convertible debt securities are a new addition to banks’ capital, introduced after the 2008 financial crisis showed that many of the debt instruments lenders counted as capital weren’t able to absorb losses. Barclays has issued $4 billion of notes that will be written down to zero if its capital ratio falls below 7 percent.

Officials at Barclays and the ABI declined to comment. The Guardian reported the alert earlier.

To contact the reporters on this story: John Glover in London at johnglover@bloomberg.net; Gavin Finch in London at gfinch@bloomberg.net

To contact the editors responsible for this story: Shelley Smith at ssmith118@bloomberg.net; Edward Evans at eevans3@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.