Barclays Bank €1bn perpetual Tier One capital
Barclays Capital was mandated lead arranger
In November, Barclays Bank plc issued the first ever institutionally-targeted euro preference share transaction, a €1bn non-call perpetual, defying conventional wisdom that perpetual debt with no incentive to call was only available from the retail markets in the US and Europe.
To appeal to European institutions, the challenge was to structure the deal appropriately and to offer the correct premium over a comparable instrument with a call incentive. Barclays’ transaction proved that the bank was on the mark, with an order book 2.5 times oversubscribed.
The deal is significant. For the first time, issuers have access to efficient core Tier One capital from institutional investors in volume and with security of execution – unlike the retail market – at a time when European bank regulators are moving Tier One capital guidelines to truly perpetual instruments for core Tier One.
