October 31st, 2008 Posted in SWF
Details below from MarketWatch, of an announcement by Barclays (UK: BARC) (NYSE: BCS) of an US$11.9B capital raising effort via convertible notes from Qatar Holdings, Sheikh Mansour Bin Zayed Al Nahyan, a member of the Abu Dhabi royal family, and among other existing shareholders. It’s reported that pending conversion rates, Al Nahyan is poised to become Barclay’s top shareholder with a 16.3% stake, followed by Qatar at 12.7%. Those convertibles have coupons ranging from 9.75% to 14%.
Assuming Barclays doesn’t fail, it appears to be quite a deal for Middle East players — in fact, a win-win really, since Barclays gets the capital it so badly needs to boost its Tier One, and avoids heavy FSA hands sans a government injection.
| LONDON (MarketWatch) — Barclays on Friday struck a deal to raise up to 7.3 billion pounds ($11.9 billion) in fresh capital as the U.K. lender signaled its preference for cash from Middle Eastern royal families to the British government. |
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Barclays said it’s issuing 3 billion pounds of notes that carry a 14% coupon to Qatar Holding, a state-backed investment vehicle, and Sheikh Mansour Bin Zayed Al Nahyan, a member of the Abu Dhabi royal family. The notes will carry options for the issue of up to 3 billion pounds at a price of 197.775 pence a share.
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Barclays also said it’s issuing 2.8 billion pounds of mandatorily convertible notes to Qatar, Qatar Holding’s Chairman Sheikh Hamad Bin Jassim Bin Jabr Al-Thani, and Al Nahyan, as well as up to 1.5 billion pounds to existing institutional shareholders. The convertibles will have a coupon of 9.75% and will convert into equity at a price of 153.276 pence.
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