Pricing Agreement
Exhibit 1.2
April 3, 2013
Barclays Capital Inc.
As representative of the several Underwriters
named in Schedule I (the “Representative”)
Ladies and Gentlemen:
Barclays Bank PLC (the “Bank”) proposes to issue $1,000,000,000 aggregate principal amount of 7.75% Fixed to Fixed Rate Contingent Capital Notes due April 2023 Callable April 2018 (the “Notes”). Each of the Underwriters hereby undertakes to purchase at the subscription prices set forth in Schedule II hereto the amount of Notes set forth opposite the name of such Underwriter in Schedule I hereto, such payment to be made at the Time of Delivery set forth in Schedule II hereto. The obligations of the Underwriters hereunder are several but not joint.
Each of the provisions of the Underwriting Agreement—Standard Provisions, dated October 6, 2010 (the “Underwriting Agreement”), is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Agreement, except that each representation and warranty with respect to the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation and warranty as of the date of the Prospectus and also a representation and warranty as of the date of this Agreement in relation to the Prospectus as amended or supplemented relating to the Notes. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representative designated to act on behalf of each of the Underwriters of Designated Securities pursuant to Section 14 of the Underwriting Agreement and the address referred to in such Section 14 is set forth in Schedule II hereto.
In addition, the Bank represents and warrants to, and agrees with, each of the Underwriters that the listing prospectus in respect of the Designated Securities, expected to be dated on or about April 8, 2013, as of its date, will contain all material information with regard to the Bank and its subsidiaries, such information will be true and accurate in all material respects and not misleading and will not omit to state any other fact required to be stated therein or the omission of which would make any information contained therein misleading in any material respect and all reasonable enquiries will have been made to ascertain such facts and to verify the accuracy of all such information and otherwise will comply with the relevant rules made under Section 73A of the U.K. Financial Services and Markets Xxx 0000.
An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Designated Securities, in the form heretofore delivered to you, is now proposed to be filed with the Commission.
The Applicable Time for purposes of this Pricing Agreement is 1:45 p.m. New York time on April 3, 2013. Each “free writing prospectus” as defined in Rule 405 under the Securities Act for which each party hereto has received consent to use in accordance with Section 7 of the Underwriting Agreement is listed in Schedule III hereto and is attached as an Exhibit hereto.
If the foregoing is in accordance with your understanding, please sign and return to us the counterpart hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters on the one hand and the Bank on the other.
| Very truly yours, | ||
| BARCLAYS BANK PLC | ||
| /s/ X. Xxxxxxxx | ||
| Name: | X. Xxxxxxxx | |
| Title: | Managing Director, Barclays Treasury | |
Accepted as of the date hereof
at New York, New York
On behalf of itself and each of the other Underwriters
| BARCLAYS CAPITAL INC. | ||
| /s/ Xxxxx Xxxxx | ||
| Name: | Xxxxx Xxxxx | |
| Title: | Managing Director | |
SCHEDULE I
| Principal Amount of the Notes |
||||
| Underwriter |
||||
| Barclays Capital Inc. |
$ | 580,000,000 | ||
| BNP Paribas Securities Corp. |
$ | 75,000,000 | ||
| Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated |
$ | 75,000,000 | ||
| Xxxxxx Xxxxxxx & Co. LLC |
$ | 75,000,000 | ||
| Xxxxx Fargo Securities, LLC |
$ | 75,000,000 | ||
| Banco Bilbao Vizcaya Argentaria, S.A. |
$ | 10,000,000 | ||
| Capital One Southcoast, Inc. |
$ | 10,000,000 | ||
| Commerz Markets LLC |
$ | 10,000,000 | ||
| ING Bank N.V. Belgian Branch |
$ | 10,000,000 | ||
| Lloyds Securities Inc. |
$ | 10,000,000 | ||
| Mediobanca – Banca di Credito Finanziario S.p.A. |
$ | 10,000,000 | ||
| Mizuho Securities USA Inc. |
$ | 10,000,000 | ||
| RBC Capital Markets, LLC |
$ | 10,000,000 | ||
| Santander Investment Securities Inc. |
$ | 10,000,000 | ||
| Scotia Capital (USA) Inc. |
$ | 10,000,000 | ||
| SMBC Nikko Capital Markets Limited |
$ | 10,000,000 | ||
| TD Securities (USA) LLC |
$ | 10,000,000 | ||
| Total |
$ | 1,000,000,000 | ||
I-1
SCHEDULE II
Titles of Designated Securities
$1,000,000,000 7.75% Fixed to Fixed Rate Contingent Capital Notes due April 2023 Callable April 2018
Price to Public:
100% of principal amount
Subscription Price by Underwriters:
99.00% of the aggregate principal amount with respect to the Notes; in addition, with respect to $121,850,000 aggregate principal amount of such Notes, Barclays Capital Inc. will receive an additional commission of 0.50% of such aggregate principal amount for the benefit of certain dealers.
In addition, the Bank agrees to pay a structuring fee of 0.50% on the aggregate principal amount of the Notes to Barclays Capital Inc.
Form of Designated Securities:
The Notes will be represented by one or more global notes registered in the name of Cede & Co., as nominee of The Depository Trust Company issued pursuant to the Dated Subordinated Debt Securities Indenture dated October 12, 2010 between Barclays Bank PLC and The Bank of New York Mellon, as supplemented by the Second Supplemental Indenture to be dated April 10, 2013 between Barclays Bank PLC and The Bank of New York Mellon.
Securities Exchange, if any:
London Stock Exchange.
Interest Rate:
Interest will accrue on the Notes from the date of their issuance. From (and including) the date of issuance to (but excluding) the Reset Date, interest will accrue on the notes at an initial rate equal to 7.75% per annum, and thereafter at a rate equal to the sum of (1) the prevailing Mid Market Swap Rate (as defined herein) on the Reset Determination Date and (2) 6.833% per annum, from and including the Reset Date.
Interest Payment Dates:
Interest will be payable on the Notes semi-annually in arrear on April 10 and October 10 in each year, commencing on October 10, 2013.
Reset Date:
April 10, 2018.
Reset Determination Date:
The second Business Day immediately preceding the Reset Date.
II-1
Mid Market Swap Rate:
“Mid Market Swap Rate” means the mid market U.S. dollar swap rate Libor basis having a five-year maturity appearing on Bloomberg page “ISDA 01” (or such other page as may replace such page on Bloomberg, or such other page as may be nominated by the person providing or sponsoring the information appearing on such page for purposes of displaying comparable rates) at 11:00 a.m. (New York time) on the Reset Determination Date, as determined by the Calculation Agent. If such swap rate does not appear on such page (or such other page or service), the Mid Market Swap Rate shall instead be determined by the Calculation Agent on the basis of (i) quotations provided by the principal office of each of four major banks in the U.S. dollar swap rate market (which banks shall be selected by the Calculation Agent in consultation with the Issuer no less than 20 calendar days prior to the Reset Determination Date) (the “Reference Banks”) of the rates at which swaps in U.S. dollars are offered by it at approximately 11.00 a.m. (New York time) (or thereafter on such date, with the Calculation Agent acting on a best efforts basis) on the Reset Determination Date to participants in the U.S. dollar swap rate market for a five-year period and (ii) the arithmetic mean expressed as a percentage and rounded, if necessary, to the nearest 0.001% (0.0005% being rounded upwards) of such quotations. If the Mid Market Swap Rate is still not determined on the Reset Determination Date in accordance with the foregoing procedures, the Mid Market Swap Rate shall be the mid market U.S. dollar swap rate Libor basis having a five-year maturity that appeared on the most recent Bloomberg page “ISDA 01” (or such other page as may replace such page on Bloomberg, or such other page as may be nominated by the person providing or sponsoring the information appearing on such page for purposes of displaying comparable rates) that was last available prior to 11.00 a.m. (New York time) on the Reset Date, as determined by the Calculation Agent.
Calculation Agent:
The Bank of New York Mellon, acting through its London branch, or its successor appointed by the Issuer. All determinations and any calculations made by the Calculation Agent for the purposes of calculating the Mid Market Swap Rate shall be conclusive and binding on the holders of the Notes, the Issuer and the trustee, absent manifest error. The Calculation Agent shall not be responsible to the Issuer, Noteholders or any third party for any failure of the Reference Banks to provide quotations as requested of them or as a result of the Calculation Agent having acted on any quotation or other information given by any Reference Bank which subsequently may be found to be incorrect or inaccurate in any way.
Record Dates:
The 15th calendar day preceding each Interest Payment Date, whether or not such day is a Business Day.
Sinking Fund Provisions:
No sinking fund provisions.
II-2
Redemption Provisions for Notes:
Subject to certain conditions, the Notes are redeemable, at the option of the Bank, (i) on April 10, 2018, (ii) in the event of certain changes in tax law or regulation or the official application or interpretation thereof, and (iii) in the event the Bank determines that the Notes are fully excluded from Tier 2 Capital within the meaning of the capital adequacy requirements of the Prudential Regulation Authority or any other regulation, directive or other binding rules, standards or decisions adopted by the institutions of the European Union, in each case as specified in the preliminary prospectus supplement dated March 26, 2013 (as supplemented by the final term sheet dated April 3, 2013).
Time of Delivery:
April 10, 2013 by 9:30 a.m. New York time.
Specified Funds for Payment of Subscription Price of Designated Securities:
By wire transfer to a bank account specified by the Bank in same day funds.
Value Added Tax:
| (a) | If the Bank is obliged to pay any sum to the Underwriters under this Agreement, which is the consideration for a supply made by the Underwriters to the Bank for value added tax (“VAT”) purposes and any VAT is properly charged on such supply for which the Underwriters are required to account to HM Revenue & Customs, the Bank shall pay to the Underwriters an amount equal to such VAT on receipt of a valid VAT invoice; |
| (b) | If the Bank is obliged to pay a sum to the Underwriters under this Agreement to reimburse any fee, cost, charge or expense properly incurred by the Underwriters under or in connection with this Agreement (the “Relevant Cost”), the Bank shall pay to the Underwriters an amount which: |
| (i) | if for VAT purposes the Relevant Cost is consideration for a supply of goods or services made to the Underwriters, is equal to any input VAT incurred by the Underwriters on that supply of goods and services, but only if and to the extent that the Underwriters are not entitled to recover such input VAT from HM Revenue & Customs (whether by repayment or credit) provided, however, that the Underwriters shall reimburse the Bank for any amount paid by the Bank in respect of irrecoverable input VAT pursuant to this paragraph (i) if and to the extent such input VAT is subsequently recovered from HM Revenue & Customs (whether by repayment or credit); |
| (ii) | if for VAT purposes the Relevant Cost is a disbursement for VAT purposes properly incurred by the Underwriters under, or in connection with, this Agreement as agent on behalf of the Bank, is equal to any part of the Relevant Cost which represents VAT provided, however, that the Underwriters shall use best endeavors to procure that the actual supplier of the goods or services which the Underwriters received as agent issues a valid VAT invoice to the Bank. |
Closing Location: Linklaters LLP, Xxx Xxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx.
II-3
Name and address of Representative:
Designated Representative: Barclays Capital Inc.
Address for Notices:
Barclays Capital Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Syndicate Registration
Selling Restrictions:
Each Underwriter of Designated Securities represents, warrants and agrees with the Bank that, in connection with the distribution of the Designated Securities, directly or indirectly, it: (i) has only communicated or caused to be communicated, and will only communicate or cause to be communicated, any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Xxx 0000 (the “FSMA”)) received by it in connection with the issue or sale of any Designated Securities in circumstances in which Section 21(1) of the FSMA would not, if the Bank were not an “authorized person”, apply to the Bank; and (ii) has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Designated Securities in, from or otherwise involving the United Kingdom.
Other Terms and Conditions:
As set forth in the Prospectus Supplement dated April 3, 2013 relating to the Designated Securities, incorporating the Prospectus dated August 31, 2010 relating to the Designated Securities.
II-4
SCHEDULE III
Issuer Free Writing Prospectuses:
Investor Presentation dated March 26, 2013, attached hereto as Exhibit A.
Final Term Sheet, dated April 3, 2013, attached hereto as Exhibit B.
III-1
EXHIBIT A
Investor Presentation, dated March 26, 2013
 Contingent
Capital
Notes
26 March 2013
Marketing
Deck |
 Contingent Capital Notes -
Executive Summary
Following our inaugural Contingent Capital Notes (CCNs) transaction in November, we
are pleased to invite indications of interest for a similar transaction
•
The development of a stable and viable contingent capital market represents an
important step in transitioning European bank capital structures to meet
CRD IV requirements with maximum efficiency, from both a cost and
diversification perspective •
Our primary considerations in issuing a second CCN transaction at this time
include: -
Additional build out of the contingent capital market
-
Desire
to
proactively
transition
to
our
CRD
IV
“target”
capital
structure
-
100% “loss absorbing capital”
benefit from UK regulatory authorities
-
Incremental upgrade of Tier 2 (T2) capital to loss absorbing capital.
•
These CCNs will be a T2 security that includes a write-off feature should the
Group’s published Core Tier 1 (CT1) / Common Equity Tier 1
(CET1) ratio, as appropriate, fall below 7% (Trigger Event). We expect
that,
absent
a
Trigger
Event,
and
consistent
with
the
principles
of
the
draft
EU
Recovery
and
Resolution
Directive
(RRD),
the
CCNs
will
rank
and
be
treated
as
pari
passu
with
Barclays’
other
T2
securities
•
Subject to investor feedback, our preference would be for a 10NC5 security (given
the flexibility afforded by the call feature), as we transition to our
end-state capital structure •
Based on our current interpretation of CRD IV, we anticipate that investors will
benefit from the following factors before CT1/CET1 trigger is
breached: -
Capital
buffer
of
4.0%
(£15.3bn)
against
our
31
December
2012
CT1
ratio,
post
IFRS
10
1
and
warrant
exercise
2
,
of
11.0%
-
Barclays minimum CRD IV G-SIFI CET1 ratio requirements of 9.0%, below which
distribution prohibitions apply
-
Internal capital management buffer targeting a minimum 10.5% CET1 ratio,
post-CRD IV transition. 2 | Contingent Capital
Notes | 26 March 2013 1
Implementation
of
IFRS
10
on
1
January
2013
resulted
in
a
12bps
decrease
in
31
December
2012
CT1
ratio
of
10.9%
2
Warrants fully exercised in February 2013, resulting in increase in Barclays
PLC’s CT1 equity capital by £750m, equivalent to an additional 19bps on its 31 December 2012
CT1 ratio of 10.9% |
 End-State Capital Structure
Our
“target”
capital
structure
was
articulated
during
the
marketing
process
for
the
November
2012
transaction
and
anticipates
expected
CRD
IV
requirements
and
ICB
proposals
•
Common Equity Tier 1 (CET1) target:
3 | Contingent Capital Notes | 26
March 2013 9%
7%
10.5%
10.9%
£42.1bn
XX0
Xxxxxxxx X0 0000
capital structure
(Basel 2.5)
2.4%
£9.5bn
T1 (traditional)
3.8%
£14.4bn
T2
17.1% Total
Capital Ratio
17.0% Total
Capital Ratio
Barclays “Target”
CRD IV / ICB capital
structure
2%
contingent
capital
4.5%
Equity
2.5% Capital
conservation
buffer
2.0% G-SIFI
1.5%
internal buffer
1.5%
AT1
5.0%
T2 / senior
unsecured
-
Reconstitutes the G-SIFI buffer on a Trigger Event, and
-
Reduces
“moral
hazard”
for
fixed
income
investors
that an
excessive CCN layer could introduce.
-
A 2% CCN layer, assuming a 7% Trigger Event:
-
We are targeting a 2% CCN layer, with a 7% trigger event,
comprising the 1.5% AT1 requirement and a further 0.5%
T2
in
the
end-state;
though
we
will
“flex”
these
proportions in
transition
•
Contingent Capital Notes (CCN) Target:
-
While a minimum of 2% T2 capital is required under CRD IV, the
Independent Commission on Banking (ICB) proposals require
17% primary loss absorbing capacity (PLAC)
-
PLAC can be met with senior unsecured debt. Accordingly, we
anticipate that 5% T2/senior unsecured will be required to meet
the ICB 17% PLAC proposal.
•
Tier 2 (T2) target:
-
CRD
IV
incentivises
a
minimum
1.5%
of
AT1
which
has
to
be in
contingent capital form. Without this, excess equity would be
required to avoid distribution restrictions (see next slide).
•
Additional Tier 1 (AT1) target:
-
Minimum regulatory requirements of 4.5% CET1 and 4.5%
“combined
buffer
requirement”
(excluding
counter-cyclical buffer)
-
Minimum
“internal
capital
management
buffer”
of
1.5%
CET1, to
manage business as usual volatility in CET1 ratio. |
 Value
of Contingent Capital under CRD IV We
view
the
issuance
of
additional
CCNs
in
T2
form
as
the
most
efficient
way
to
deepen
the
contingent
capital
market
and
prepare
for
AT1
CCNs
that
are
key
to
our
end-state
capital
target
•
In this example, the target minimum CET1 capital ratio of
10.5% comprises:
-
Minimum regulatory requirements of 4.5% CET1 (Art. 87
of CRR)
-
4.5%
“combined
buffer
requirement”
under
Art.
122
of
CRD IV, excluding counter-cyclical buffer,
-
Minimum 1.5% CET1 “internal capital management
buffer”, to manage business as usual volatility in CET1
ratio.
•
Art. 87 of CRD IV incentivises 1.5% of AT1 to be used to make
up
the
total
T1
requirement
of
6%.
If
no
AT1
capital
is
held,
this additional 1.5% T1 minimum regulatory requirement will
have to be met with CET1, which will not then be available to
protect the “combined buffer requirement”
•
Art. 131 of CRD IV imposes restrictions on discretionary
distributions
if
the
“combined
buffer
requirement”
is
breached
•
The benefit of holding 1.5% AT1 to the bank in this example is
clear, without it:
-
1.5% CET1 internal management buffer vanishes
-
Art. 131 distribution restrictions would apply if CET1
reduced by 1bp
-
To re-instate a minimum 1.5% CET1 internal buffer against
distribution restrictions, the bank would need to operate with
12% CET1 on a business as usual basis.
•
Developing the AT1 market necessitates the development of a
deep and scalable contingent capital market. T2 CCNs
represent the most efficient means of doing so at this time.
4 | Contingent Capital Notes | 26
March 2013 4.5%
equity
Capital structure with 4.5%
CET1 and 1.5% AT1 to
meet T1 minimum
4.5% CRD IV
buffers held in
equity
1.5% internal
buffer held
in equity
6.0%
equity
1.5%
AT1 capital
4.5% CRD IV
buffers held
in equity
Capital structure with
6.0% CET1 and no AT1
to meet T1 minimum
Example Minimum Tier 1 Requirements and Regulatory
Buffers, assuming minimum CET1 target of 10.5%
4.5%
3.375%
2.25%
1.125%
0%
60%
40%
20%
0%
Minimum 6%
T1 ratio
under CRR
Art. 87
4.5% Equity
buffer
requirement
under CRD IV
Art. 122
Restrictions on
distributions are linear as
the combined buffer
requirement falls
below 4.5%
CRD IV Art. 131 restrictions
on distributions if
combined buffer
requirement < 4.5% |
 Transitional CET1 ratio projections
Despite
new
regulatory
requirements
and
assuming
no
capital
generation
through
earnings,
we
anticipate
our
transitional
CET1
ratio
to
strengthen
over
time,
as
we
seek
to
implement identified
RWA
mitigating
actions
•
Prior
to
implementation
of
CRD
IV,
the
7%
Trigger
Event
will
be
measured
by
reference
to
Barclays’
current
published
CT1
ratio
(10.9%),
calculated
in
line
with
FSA
guidance
set
out
in
a
letter
to
the
British
Bankers
Association
in
2009
1
•
Upon implementation of CRD IV, the 7% Trigger Event will be measured by reference
to the CRD IV CET1 ratio, on the basis
of
the
transition
rules
set
out
by
FSA
in
its
press
release
of
26
October
2012
2
•
Current
capital
buffer
of
4.0%
(£15.3bn)
against
our
31
December
2012
CT1
ratio,
post
IFRS10
3
and
warrant
exercise
4
,
of
11.0%
•
Key
assumptions
5
:
-
No CET1 capital generated or lost through earnings or losses
-
CET1 capital is impacted by CRD IV transitional adjustments and warrant exercise
-
RWA
projections
include
£75bn
gross
savings
through
identified
efficiencies
(resulting
in
an
estimated
200bps
transitional
CET1
ratio increase) and exclude any business growth
-
Market conditions prevailing at end of December 2012 hold through 2015.
5 | Contingent Capital Notes | 26
March 2013 4
1
FSA letter to BBA on 1 May 2009
(xxxx://xxx.xxx.xxx.xx/xxxx/xxxxx/xxx_xxxxxx.xxx) 2
FSA announcement on 26 October 2012
(xxxx://xxx.xxx.xxx.xx/xxxxx/xxxx/xxxxxxxxxxxxx/xxxxx/xxx/xxx_xxx/xxxxxxxxxxxx-xxxxxxxxxx)
3
Implementation
of
IFRS
10
on
1
January
2013
resulted
in
a
12bps
decrease
in
31
December
2012
CT1
ratio
of
10.9%
4
Warrants fully exercised in February 2013, resulting in increase in Barclays
PLC’s CT1 equity capital by £750m, equivalent to an additional 19bps on 31 December 2012 CT1 ratio of 10.9%
5
These
assumptions
are
subject
to
significant
uncertainties,
as
described
in
the
“Risk
Factors”
section
starting
on
page
72
of
our
Annual
Report
in
20-F
for
the
year
ended
December
31, 2012 and in the
preliminary prospectus supplement that will be filed with the SEC with respect to
the CCNs and a copy of which will be provided to prospective investors |
 Contingent Capital Notes: Key Terms & Conditions
6 | Contingent Capital Notes | 26
March 2013 Terms
are
similar
to
the
previous
CCN
issuance
and,
in
addition,
include
acknowledgement
Issuer
Barclays Bank PLC
Expected Issue
Ratings
BBB-/ BBB-
(S&P/Fitch)
Currency / Offering
USD / SEC Registered
Subordination
Subordinated, pari passu
with existing Lower T2, in insolvency, absent a Trigger Event. Barclays expects
that the UK
resolution
authority
would
exercise
its
“bail-in”
power
having
regard
to
the
hierarchy
of
creditor
claims.
Maturity
[10NC5
/
10
year
bullet]
[one-time
call
on
[March]
[
]
2018]
Interest
[[Fixed/Floating] / reset on call date]. No interest deferral
Capital Adequacy
Trigger Event
7%
CET1
ratio
(CT1
capital
before
CRD
IV
implementation
date
and
CET1
capital
after
CRD
IV
implementation
date -
transitioned as per FSA guidance -
divided by risk-weighted assets calculated as per FSA standards
applicable on the calculation date) measured on a quarterly basis or on any other
date on which the CET1 ratio is calculated and subsequently published as
required by the FSA Write-off by means of
Automatic
Write-down
Following a Capital Adequacy Trigger Event, an Automatic Write-down of the
Notes will occur such that Holder’s rights to principal and interest
on the Notes are permanently written off and Holders will have no further rights
against the Issuer
Contractual
Acknowledgement of
UK bail-in power
Acknowledgement
under
New
York
law
that
the
Notes
will
be
subject
to
future
UK
bank
“bail-in”
power,
which,
if
exercised
by
the
relevant
UK
resolution
authority,
may
result
in
the
cancellation
of
all,
or
a
portion
of,
the
principal amount of, or interest on, the Notes and/or the conversion of all or a
portion of the principal amount of, or interest on, the Notes into shares
or other obligations of Barclays Bank PLC or another person Tax Call
At price of 100% if required to pay Additional Amounts or interest payments no
longer deductible for UK corporation tax purposes or Issuer is
de-grouped for United Kingdom tax purposes as a result of a change in law
(including any material amendments to, or failure to enact, UK Finance Act
2013) Regulatory Call
At price of 100% if fully excluded from Tier 2 Capital
Denominations
USD 200,000, integral amounts of USD 1,000 in excess thereof
Listing
London
Governing Law
New York law, save for subordination which will be governed by English law
of
a
prospective
statutory
UK
bank
resolution
bail-in
power |
 Recovery and Resolution Directive (RRD)
•
On 6 June 2012, the European Commission
published a proposed RRD
•
The
proposal
includes
a
“bail-in”
power
that
provides resolution authorities with the power to
write-down or convert eligible liabilities into equity
in failing institutions and is applicable to all
liabilities (with certain exceptions)
•
The proposed RRD also provides resolution
authorities with the power to write-down and to
convert AT1 and T2 capital instruments, such as
the CCNs, from 1 January 2015
•
Bail-in tool for other eligible liabilities is expected
to be applicable from 1 January 2018
•
AT1 and T2 liabilities should only be written-down
and/or converted once CET1 instruments have
been exhausted
•
The proposed RRD contains a requirement for the
inclusion in the contractual provisions of
instruments which are governed by the law of
non-Member State jurisdictions a term by which
the creditor recognises that the instrument may
be subject to the statutory write-down and
conversion powers and agrees to be bound by
any write-down and/or conversion effected by the
resolution authority
Recovery and Resolution Plans
Terms of CCN clarify the expectation that investors would be treated as T2
consistently with other creditors of that class in the event a future statutory
bail-in regime is introduced in the UK 7 |
Contingent Capital Notes | 26 March 2013 Excerpt from
the Preliminary Prospectus Supplement
dated
March
26,
2013
(page
S-30)
By its acquisition of the notes, each holder of the notes acknowledges, agrees to
be bound by and consents to the exercise of any U.K. bail-in power (as
defined
below)
by
the
relevant
U.K.
resolution
authority
that
may
result
in
the
cancellation of all, or a portion, of the principal amount of, or interest on, the
notes and/or the conversion of all, or a portion, of the principal amount
of, or interest on, the notes into shares or other securities or other
obligations of the Issuer or another person, and the rights of the holders
under the notes are subject to the provisions of any U.K. bail-in power
which are expressed to implement such a cancellation or conversion.
For
these
purposes,
a
“U.K.
bail-in
power”
is
any
statutory
write-down
and/or
conversion
power
existing
from
time
to
time
under
any
laws,
regulations,
rules or
requirements relating to the resolution of credit institutions and investment firms
incorporated in the United Kingdom in effect and applicable in the United
Kingdom to the Issuer or other members of the Group, including but not
limited to any such laws, regulations, rules or requirements which are
implemented, adopted
or
enacted
within
the
context
of
a
European
Union
directive
or
regulation
of
the
European
Parliament
and
of
the
Council
establishing
a
framework
for
the
recovery
and
resolution
of
credit
institutions
and
investment
firms, pursuant to which obligations of a credit institution or investment firm or
any
of
its
affiliates
can
be
cancelled
and/or
converted
into
shares
or
other
securities or obligations of the obligor or any other person (and a reference to
the “relevant U.K. resolution authority”
is to any authority with the ability to exercise a
U.K. bail-in power).
According to the principles proposed in the draft RRD, Barclays expects that the
relevant U.K. resolution authority would exercise its U.K. bail-in
powers in respect of the notes having regard to the hierarchy of creditor
claims and that the
holders
of
the
notes
would
be
treated
pari
passu
with
all
Other
Pari
Passu
Claims at that time being subjected to the exercise of the U.K. bail-in
powers. |
 8 | Contingent Capital Notes | 26
March 2013 Disclaimer
This presentation has been produced by Barclays Bank PLC (“Barclays”) solely for use at this
investor presentation held in connection with the offering of the Barclays Contingent Capital
Notes (“CCNs”) and may not be reproduced or redistributed, in whole or in part, to any other person. Barclays has filed a registration statement (including a prospectus) and
will file a preliminary prospectus supplement with the U.S. Securities and Exchange Commission
(“SEC”) for the offering of the CCNs to which this investor presentation relates. Before
you invest, you should read the prospectus in that registration statement, the preliminary prospectus
supplement relating to the offering of the CCNs and other documents that Barclays will file with
the SEC for more complete information about Barclays and the offering of the CCNs. You may obtain these documents free of charge by visiting the SEC online
database (XXXXX®) on the SEC’s website at (xxxx://xxx.xxx.xxx). The prospectus dated August
31, 2010 is available under the following link: xxxx://xxx.xxx.xxx/Xxxxxxxx/xxxxx/xxxx/000000/000000000000000000/xx0xxx.xxx
. The preliminary prospectus supplement dated on or about March 26, 2013 when filed with the SEC,
will be available under the following link: xxxx://xxx.xxx.xxx/xxxxx.xxxxx. Alternatively, you may
obtain a copy of the prospectus and the preliminary prospectus supplement from Barclays Capital
Inc. by calling 0-000-000-0000. This presentation is only being
distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the
Financial Services and Markets Xxx 0000 (Financial Promotion) Order 2005 (the “Order”)
or (iii) high net worth entities, and other persons to whom it may lawfully be communicated,
failing within Article 49(2)(a) to (d) of the Order (all such persons together being
referred to as “relevant persons”). Any investment activity to which this communication may relate is
only available to; and any invitation, offer, or agreement to engage in such investment activity will
be engaged in only with, relevant persons. Any person who is not a relevant person should not
act or rely on this document or any of its contents. Forward-looking Statements
This presentation contains certain forward-looking statements within the meaning of Section 21E of
the U.S. Securities Exchange Act of 1934, as amended, and Section 27A of the U.S. Securities
Act of 1933, as amended, with respect to certain of the Barclays Group’s plans and its current goals and expectations relating to its future financial condition and
performance. Barclays cautions readers that no forward-looking statement is a guarantee of future
performance and that actual results could differ materially from those contained in the
forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements
sometimes use words such as “may”, “will”, “seek”, “continue”,
“aim”, “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”, “believe”, “projected”, “achieve” or other words of
similar meaning. Examples of forward-looking statements include, among others, statements
regarding Barclays future financial position, income growth, assets, impairment charges,
business strategy, capital ratios (including, in particular, its projected CT1 and CET1 ratios),
leverage, payment of dividends, projected levels of growth in the banking and financial
markets, projected costs, commitments in connection with the Transform Programme, estimates of capital
expenditures and plans and objectives for future operations and other statements that are not
historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but
not limited to, UK domestic, Eurozone and global macroeconomic and business conditions, the effects of
continued volatility in credit markets, market related risks, such as changes in interest rates
and foreign exchange rates, effects of changes in valuation of credit market exposures, changes in valuation of issued notes, the policies and actions of governmental
and regulatory authorities (including requirements regarding capital and group structures and the
potential for one or more countries exiting the Eurozone), changes in legislation, the further
development of standards and interpretations under International Financial Reporting Standards (“IFRS”) and prudential capital rules applicable to past, current and future
periods, evolving practices with regard to the interpretation and application of standards, the
outcome of current and future legal proceedings, the success of future acquisitions and other
strategic transactions, and the impact of competition – a number of such factors being beyond the Barclays Group’s control. In particular, the CRD IV rules, including with respect
to the calculation of common equity tier 1 capital and risk weighted assets, have not been finalized
and remain subject to change by European legislators, and the Financial Services Authority of
the United Kingdom (the “FSA”), may also alter its stated approach to the adoption of CRD IV in the United Kingdom, and, accordingly, the basis on which certain
calculations in this investor presentation are made may be different than the requirements under the
final CRD IV rules as they apply in the United Kingdom. As a result of these uncertain
events and circumstances, the Barclays Group’s actual future results and capital ratios may differ materially from the plans, goals, and expectations set forth in the Barclays
Group’s forward-looking statements. Any forward-looking statements made herein or in the
documents incorporated by reference herein speak only as of the date they are made. Except as
required by the FSA, the London Stock Exchange plc (“LSE”) or applicable law, Barclays expressly disclaims any obligation or undertaking to release publicly any updates
or revisions to any forward-looking statement contained in this investor presentation or the
documents incorporated by reference herein to reflect any changes in expectations with regard
thereto or any changes in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any additional disclosures that
Barclays has made or may make in documents that the Barclays Group has filed or may file with the
SEC. |
 9 | Contingent Capital Notes | 26
March 2013 Disclaimer (continued)
Certain non-IFRS measures
This investor presentation includes a calculation of transitional Common Equity Tier 1
(“CET1”) ratio as at 1 January 2013. Transitional CET1 ratio is a regulatory measurement that is
not yet required to be disclosed and, as such, represents a non-IFRS measure. Management views its
transitional CET1 ratio as a key measure in monitoring the Group’s capital position.
Transitional CET1 ratio has been calculated on the basis of our current interpretation of the new capital requirements regulation and capital requirements directive that
implement Basel 3 proposals within the EU (known as CRD IV), including transitional provisions in line
with the FSA’s statement on CRD IV transitional provisions in October 2012, assuming they
were applied as at 1 January 2013. The methodologies for calculating this measurement is not yet finalised: they are subject to further revisions ahead of their
implementation date and our interpretation of this calculations may not be consistent with other
financial institutions. For more information on the calculation of this measurement and the
impacts of Basel 3, see pages 130-134 of our Annual Report on Form 20-F for the year ended December 31, 2012 (“2012 Form 20-F”). See also pages 131-132 of our 2012 Form
20-F for information on our Core Tier 1 ratio calculated on the basis that currently applies to
the Barclays Group under applicable regulatory requirements. INVESTING forth under “Risk
Factors” of the preliminary prospectus supplement which will be filed with the SEC and “Risk Review -Risk factors” beginning on page 72 of our 2012 Form 20-F. In
particular, you should be aware that, upon the occurrence of a Capital Adequacy Trigger Event, which
will result in an Automatic Write-Down (each as defined in the preliminary prospectus
supplement to be filed with the SEC), holders of CCNs will lose their entire investment in the CCNs. Barclays urges you to consult your investment, legal, tax, accounting
and other advisors before you invest in the CCNs.
References to internet websites in this presentation are made for informational purposes only, and
information found at such websites is not incorporated by reference into this
presentation.
IN
THE
CCNs
IS
SPECULATIVE
AND
INVOLVES
RISK
OF
LOSING
YOUR
ENTIRE
INVESTMENT.
You
should
carefully
review,
among
other
things,
the
matters
set |
 Treasury
Xxxxxx Xxxxxxx
x00 (0)00 0000 0000
xxxxxx.xxxxxxx@xxxxxxxx.xxx
Investor Relations
Xxxxxxx Xxxxx
x00 (0)00 0000 0000
xxxxxxx.xxxxx@xxxxxxxx.xxx
Capital Products
Xxxxx Xxxxxxxxx
x00 (0)00 0000 0000
xxxxx.xxxxxxxxx@xxxxxxxx.xxx
Website
xxxx://xxxxx.xxxxxxxx.xxx/xxxxx-xxxxxxxx/xxxxxxxx-xxxxxxxxx#xxxx-xxxxxxxxx
Xxxxxxxx Xxxxxxxx
x00 (0)00 0000 0000
xxxxxxxx.xxxxxxxx@xxxxxxxx.xxx
Xxxxxxx Xxxxx
x00 (0)00 0000 0000
xxxxxxx.xxxxx@xxxxxxxx.xxx
Debt Capital Markets
Xxx Xxxxxxxxxx
x00 (0)00 0000 0000
xxxxxx.xxxxxxxxxx@xxxxxxxx.xxx
Contact Information
10 | Contingent Capital Notes | 26
March 2013 |
EXHIBIT B
Final Term Sheet for the Notes, dated April 3, 2013
Pricing Term Sheet
| Issuer: | Barclays Bank PLC | |
| Expected Issue Ratings: | BBB- (S&P), BBB- (Fitch)1 | |
| Status: | Dated Subordinated Debt | |
| Legal Format: | SEC Registered | |
| Principal Amount: | USD 1,000,000,000 | |
| Trade Date: | 3 April, 2013 | |
| Settlement Date: | 10 April, 2013 | |
| Maturity Date: | 10 April, 2023 | |
| Optional Call Date: | 10 April, 2018 (one time call only) | |
| Initial Interest Period: | ||
| Initial Fixed Rate: | 7.75%, from and including 10 April, 2013 to, but excluding, the Reset Date | |
| Reset Date: | 10 April, 2018 | |
| Initial Interest Payment Dates: | Semi-annually in arrear on each of 10 April and 10 October in each year up to and including the Reset Date, commencing on 10 October, 2013. | |
| Day Count: | 30/360, following, unadjusted | |
| Benchmark Treasury: | UST 0.75 3/31/18 | |
| Spread to Benchmark: | +701.9 bps | |
| Spread to Mid Market Swap Rate: | +683.3 bps | |
| Interest Period Following the Reset Date: | ||
| Fixed Rate Following the Reset Date: | The prevailing Mid Market Swap Rate on the Reset Determination Date plus 6.833%, from and including the Reset Date (see below for definition of Mid Market Swap Rate). | |
| Interest Payment Dates Following the Reset Date: | Semi-annually in arrear on each of 10 April and 10 October in each year, commencing on 10 October, 2018 and ending on the Maturity Date. | |
| Day Count: | 30/360, following, unadjusted | |
| Spread to Mid Market Swap Rate: | +683.3 bps | |
| Reset Determination Date: | “Reset Determination Date” means the second Business Day immediately preceding the Reset Date. | |
1 Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
| Mid Market Swap Rate: | “Mid Market Swap Rate” means the mid market U.S. dollar swap rate Libor basis having a five-year maturity appearing on Bloomberg page “ISDA 01” (or such other page as may replace such page on Bloomberg, or such other page as may be nominated by the person providing or sponsoring the information appearing on such page for purposes of displaying comparable rates) at 11:00 a.m. (New York time) on the Reset Determination Date, as determined by the Calculation Agent. If such swap rate does not appear on such page (or such other page or service), the Mid Market Swap Rate shall instead be determined by the Calculation Agent on the basis of (i) quotations provided by the principal office of each of four major banks in the U.S. dollar swap rate market (which banks shall be selected by the Calculation Agent in consultation with the Issuer no less than 20 calendar days prior to the Reset Determination Date) (the “Reference Banks”) of the rates at which swaps in U.S. dollars are offered by it at approximately 11.00 a.m. (New York time) (or thereafter on such date, with the Calculation Agent acting on a best efforts basis) on the Reset Determination Date to participants in the U.S. dollar swap rate market for a five-year period and (ii) the arithmetic mean expressed as a percentage and rounded, if necessary, to the nearest 0.001% (0.0005% being rounded upwards) of such quotations. If the Mid Market Swap Rate is still not determined on the Reset Determination Date in accordance with the foregoing procedures, the Mid Market Swap Rate shall be the mid market U.S. dollar swap rate Libor basis having a five-year maturity that appeared on the most recent Bloomberg page “ISDA 01” (or such other page as may replace such page on Bloomberg, or such other page as may be nominated by the person providing or sponsoring the information appearing on such page for purposes of displaying comparable rates) that was last available prior to 11.00 a.m. (New York time) on the Reset Date, as determined by the Calculation Agent.
The Fixed Rate following the Reset Date may be less than the Initial Fixed Rate. | |
| Business Days: | New York, London | |
| Reoffer Yield: | 7.75% | |
| Price to Public: | 100.000% | |
| Estimated Underwriter Compensation: | Estimated to be a maximum of approximately 2.0% of principal amount of the Notes, including a structuring fee of 0.50% payable to Barclays Capital Inc. | |
| Estimated Net Proceeds: | USD 980,000,000 | |
| Principal Redemption: | 100.000% | |
| Interest Deferral: | None. | |
| Joint Bookrunners: | Barclays Capital Inc., BNP Paribas Securities Corp., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxx Xxxxxxx & Co. LLC and Xxxxx Fargo Securities, LLC. | |
| Co-lead managers: | Banco Bilbao Vizcaya Argentaria, S.A., Capital One Southcoast, Inc., COMMERZBANK AKTIENGESELLSCHAFT, ING Bank N.V. Belgian Branch, Lloyds TSB Bank plc, Mediobanca – Banca di Credito Finanziario S.p.A., Mizuho Securities USA Inc., Royal Bank of Canada Europe Limited, Santander Investment Securities Inc., Scotia Capital (USA) Inc., SMBC Nikko Capital Markets Limited, TD Securities (USA) LLC | |
| Ranking: | Subordinated obligations. In winding up or administration of the Issuer, the Notes shall rank at least pari passu with other dated subordinated obligations and other securities of the Issuer which in each case by law rank, or by their terms are expressed to rank, pari passu with the Notes (including the Issuer’s $1.25 billion 5.14% Lower Tier 2 Notes due October 2020 and the Issuer’s $3 billion 7.625% Contingent Capital Notes due November 2022) | |
| Capital Adequacy Trigger Event: | A “Capital Adequacy Trigger Event” shall occur if the CET1 Ratio as of the last day of each fiscal quarter or as of any other business day on which the CET1 Ratio is calculated upon the instruction of the Prudential Regulation Authority (as defined in the prospectus supplement) (the “PRA”), as the case may be, is less than 7.00% on such date.
“CET1 Ratio” means, on the relevant date, the ratio of CET1 Capital to the Risk Weighted Assets (each as defined in the prospectus supplement) of Barclays PLC and its consolidated subsidiaries (the “Group”), calculated by Barclays PLC on a consolidated basis in accordance with PRA guidelines applicable to the Group, expressed as a percentage.
“CET1 Capital” means, on the relevant date, (i) before the CRD IV implementation date, “core tier 1 capital” of the Group, less applicable deductions, and (ii) after the CRD IV implementation date, the “common equity tier 1 capital” of the Group, less applicable deductions, in either case as calculated by Barclays PLC on a consolidated basis in accordance with PRA guidelines applicable to the Group (as more fully described in the prospectus supplement).
The term “core tier 1 capital” shall have the meaning assigned to such term in the capital adequacy standards and guidelines of the PRA and “common equity tier 1 capital” shall have the meaning assigned to such term in CRD IV, subject to the transitional arrangements as implemented by the PRA. | |
| Automatic Write-Down: | If a Capital Adequacy Trigger Event occurs, then an Automatic Write-Down will occur.
“Automatic Write-Down” means the automatic write-down of the full principal amount of the Notes that has not become due to zero and the cancellation of the notes upon the expiration of the Suspension Period (as defined in the prospectus supplement).
Any Automatic Write-Down will result in holders not having any rights with respect to repayment of the principal amount of the Notes that has not become due or the payment of interest on such Notes for any period from (and including) the interest payment date falling immediately prior to the occurrence of such Automatic Write-Down, except for any rights of the holders with respect to any payments under the Notes that were due and payable prior to the date of such Automatic Write-Down. As a result, the holders will lose their entire investment in the Notes. Prior to the date on which an Automatic Write-Down occurs, the Issuer will give an Automatic Write-Down Notice to the trustee and the holders via The Depository Trust Company (“DTC”). Following the receipt of the Automatic Write-Down Notice by DTC and the commencement of the Suspension Period, DTC shall suspend all clearance and settlement of the Notes. As a result, holders will not be able to settle the transfer of any Notes from the commencement of the Suspension Period, and any sale or other transfer of the Notes that a holder may have initiated prior to the commencement of the Suspension Period that is scheduled to settle during the Suspension Period will be rejected by DTC and will not be settled within DTC.
Each purchaser of the Notes by its acquisition of the Notes and as a holder of Notes:
(1) consents to the Automatic Write-Down and acknowledges that such Automatic Write-Down of its Notes following a Capital Adequacy Trigger Event may occur without any further action on such holder’s part and authorizes, directs and requests DTC and any direct participant in DTC or other intermediary through which it holds such notes to take any and all necessary action, if required, to implement the Automatic Write-Down; and
(2) (i) agrees to all the terms and conditions of the Notes, including, without limitation, those related to the occurrence of a Capital Adequacy Trigger Event and any related Automatic Write-Down, (ii) agrees that effective upon, and following, the occurrence of the Automatic Write-Down, other than with respect to payments that have become due and payable prior to such Automatic Write-Down, no amount shall be due and payable to the holders under the Notes, and the holders shall not have the right to give a direction to the trustee with respect to the Capital Adequacy Trigger Event and any related Automatic Write-Down and (iii) waives, to the extent permitted by the Trust Indenture Act, any claim against the trustee arising out of its acceptance of its trusteeship for the Notes, including, without limitation, claims related to or arising out of or in connection with a Capital Adequacy Trigger Event and/or the Automatic Write-Down. | |
| Agreement with Respect to Exercise of UK Bail-in Power: | By its acquisition of the Notes, each holder of the Notes acknowledges, agrees to be bound by and consents to the exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in the cancellation of all, or a portion, of the principal amount of, or interest on, the Notes and/or the conversion of all, or a portion, of the principal amount of, or interest on, the Notes into shares or other securities or other obligations of the Issuer or another person (other than in respect of each of the foregoing, payments of principal and interest that have become due and payable prior to the exercise of the U.K. bail-in power), and the rights of the holders under the Notes are subject to the provisions of any U.K. bail-in power which are expressed to implement such a cancellation or conversion.
For these purposes, a “U.K. bail-in power” is any statutory write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of credit institutions and investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Issuer or other members of the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive or regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms, pursuant to which obligations of a credit institution or investment firm or any of its affiliates can be cancelled and/or converted into shares or other securities or obligations of the obligor or any other person (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).
According to the principles proposed in the draft RRD, Barclays expects that the relevant U.K. resolution authority would exercise its U.K. bail-in powers in respect of the notes having regard to the hierarchy of creditor claims and that the holders of the notes would be treated pari passu with all Other Pari Passu Claims (as defined in the prospectus supplement) at that time being subjected to the exercise of the U.K. bail-in powers.
By its acquisition of the Notes, each holder of the Notes, to the extent permitted by the Trust Indenture Act, waives any and all claims against the trustee for, agrees not to initiate a suit against the trustee in respect of, and agrees that the trustee shall not be liable for, any action that the trustee takes, or abstains from taking, in either case in accordance with the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Notes.
| |
| By its acquisition of the Notes, each holder shall be deemed to have (i) consented to the exercise of any U.K. bail-in power as it may be imposed without any prior notice by the relevant U.K. resolution authority of its decision to exercise such power with respect to the notes and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such notes to take any and all necessary action, if required, to implement the exercise of any U.K. bail-in power with respect to the Notes as it may be imposed, without any further action or direction on the part of such holder. | ||
| Tax Call: | The Issuer may, at its option, redeem the Notes upon giving notice, in whole but not in part, at a redemption price equal to 100% of their principal amount, together with any accrued but unpaid interest to the date fixed for redemption, upon the occurrence of a Tax Event (subject to (i) the provisions described under “Conditions on Redemption” below, (ii) the circumstance that entitles the Issuer to exercise such right of redemption of the notes not being (in the opinion of the Issuer) reasonably foreseeable at the Settlement Date and (iii) in the case of each Tax Event, such obligation not being able to be avoided by the Issuer taking reasonable measures available to it).
A “Tax Event” shall be deemed to have occurred in the event of any change in tax law or regulation or the official application or interpretation thereof including, without limitation, (a) any failure to enact the U.K. Finance Xxx 0000 or (b) any material amendment (whether at the time of enactment or thereafter) to the draft U.K. Finance Xxx 0000 published on December 11, 2012 relating to the taxation of Tier 2 Capital) that would (1) require the Issuer (or any successor entity) to pay additional amounts to holders, (2) result in the Issuer (or any successor entity) not being entitled to claim a deduction in respect of any payments in computing its (or any successor entity’s) taxation liabilities or materially reducing the amount of such deduction or (3) result in the Issuer (or any successor entity) not, as a result of the Notes being in issue, being able to have losses or deductions set against the profits or gains, or profits or gains offset by the losses or deductions, of companies it (or any successor entity) is or would otherwise be so grouped for applicable United Kingdom tax purposes (whether under the group relief system current as at the date of issue of the notes or any similar system or systems having like effect as may from time to time exist). | |
| Regulatory Call: | The Issuer may, at its option, redeem the Notes upon giving notice, in whole but not in part, at a redemption price equal to 100% of their principal amount, together with any accrued but unpaid interest to the date fixed for redemption, upon the occurrence of a Regulatory Event (subject to (i) the provisions described under “Conditions on Redemption” below and (ii) the circumstance that entitles the Issuer to exercise such right of redemption of the notes not being (in the Issuer’s opinion) reasonably foreseeable at the Settlement Date).
A “Regulatory Event” means that the Issuer determines that for any reason the Notes are fully excluded from the Group’s Tier 2 Capital within the meaning and for the purposes of (1) the capital adequacy requirements of the PRA or (2) any other regulation, directive or other binding rules, standards or decisions adopted by the institutions of the European Union. | |
| Optional Call: | The Issuer may, at its option, redeem the Notes, in whole but not in part, on 10 April, 2018 at 100% of their principal amount, together with any accrued but unpaid interest to (but excluding) the date fixed for redemption (subject to the provisions described under “Conditions on Redemption” below). | |
| Conditions on Redemption: | Notwithstanding any other provision:
(1) the Issuer may redeem the Notes prior to their Maturity Date only if the Issuer has obtained the PRA’s prior consent (as (and to the extent) required by applicable law and regulation) for the redemption of the relevant Notes in question; and
(2) in the event of a redemption prior to the fifth anniversary of the Settlement Date, only if (i) the circumstance that entitles the Issuer to exercise that right of redemption is the result of a change in the applicable tax treatment or regulatory classification of the Notes; and (ii) if at the time of the exercise of the right of redemption (and if and to the extent required at such time), the Issuer complies with the PRA’s main Pillar 1 rules applicable to the Issuer and other BIPRU firms (within the meaning of the PRA’s General Prudential Sourcebook) and will continue to do so after the redemption of the Notes. | |
| Denominations: | USD 200,000 and integral multiples of USD 1,000 in excess thereof | |
| ISIN/CUSIP: | US06739FHK03 / 00000XXX0 | |
| Documentation: | To be documented under the Issuer’s SEC registered shelf | |
| Clearing | DTC | |
| Listing: | London | |
| Calculation Agent: | The Bank of New York Mellon, acting through its London branch, or its successor appointed by the Issuer. All determinations and any calculations made by the Calculation Agent for the purposes of calculating the Mid Market Swap Rate shall be conclusive and binding on the holders of the Notes, the Issuer and the trustee, absent manifest error. The Calculation Agent shall not be responsible to the Issuer, Noteholders or any third party for any failure of the Reference Banks to provide quotations as requested of them or as a result of the Calculation Agent having acted on any quotation or other information given by any Reference Bank which subsequently may be found to be incorrect or inaccurate in any way. | |
| Governing Law: | New York law, except for subordination provisions which will be governed by the laws of England and Wales. | |
The Issuer has filed a registration statement, including a prospectus and preliminary prospectus supplement, with the U.S. Securities and Exchange Commission (the “SEC”) for this offering. Before you invest, you should read each of these documents and the other documents the Issuer has filed with the SEC for more complete information about the Issuer and this offering. You may get these documents for free by searching the SEC online database (XXXXX®) at xxx.xxx.xxx. Alternatively, you may obtain a copy of the prospectus from Barclays Capital Inc. by calling 0-000-000-0000, BNP Paribas Securities Corp. at 0-000-000-0000, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated at 1-800-294-1322, Xxxxxx Xxxxxxx & Co. LLC at 0-000-000-0000 or Xxxxx Fargo Securities, LLC at 0-000-000-0000.
