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Barclays Investors Bought 94.6% of Rights Offered Stock

Barclays Headquarters
A logo hangs outside the headquarters of Barclays Plc in the Canary Wharf business district of London. Photographer: Simon Dawson/Bloomberg

Barclays Plc, the U.K.’s second-largest bank by assets, said investors bought 94.6 percent of the shares in its rights offering, as Chief Executive Officer Antony Jenkins bolsters the lender’s capital.

The company sold some 3.05 billion shares, raising about 5.6 billion pounds ($9 billion) at 185 pence apiece. The banks managing the offering sold the remaining 172.9 million shares at 268 pence each, the London-based bank said in a statement today.

“That’s a pretty good take up, and I think it leaves Barclays shares well placed to enjoy a good run,” said Simon Willis, a banking analyst at Daniel Stewart Securities Plc in London.

Jenkins in July said the London-based bank planned to raise 5.8 billion pounds in the stock sale to meet stricter capital rules. The U.K.’s Prudential Regulation Authority is imposing a 3 percent leverage ratio, forcing banks to hold 3 pounds of equity for every 100 pounds of assets to make the financial system safer.

Barclays fell 1.7 pence, or 0.6 percent, to 271.4 pence in London, valuing the lender at 43.7 billion pounds. The shares are up about 12 percent this year.

Barclays was one of only two British lenders to miss the regulator’s leverage target in June, with 2.5 percent. Nationwide Building Society, which at 2 percent also failed, was given until the end of 2015 to make up the shortfall.

Shrinking Assets

Investors were invited to buy one new share for every four they already owned at 40 percent less than the closing price the day before the offer. Barclays is also shrinking assets by as much as 80 billion pounds to 1.5 trillion pounds and selling 2 billion pounds of loss-absorbing securities.

The offering is the biggest for a U.K. lender since Lloyds Banking Group Plc raised 13.5 billion pounds in 2009. Today’s transaction was underwritten by banks led by Credit Suisse Group AG, Deutsche Bank AG, Bank of America Corp., and Citigroup Inc. Those lenders were also book runners with Barclays, which acted as co-ordinator.

Jenkins, 52, expects to spend about 1.4 billion pounds by 2015 in an overhaul of the consumer bank, about half the total cost of his revamp, the lender said last month.

The bank will spend about 600 million pounds on “rightsizing, industrialization and innovation” in its investment bank, about 400 million pounds in its wealth unit and more than 300 million pounds at the corporate bank, Barclays said at the time.

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