This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: Barclays Announces $8.9B Share Sale

LONDON (The Deal) -- The U.K.'s Barclays (BCS) on Tuesday, July 30, said it would raise £5.8 billion ($8.9 billion) through a share sale to meet a new Bank of England leverage target.

Barclays will offer its investors one new share for every four they own at a price of 185 pence, more than 40% less than Barclays' Monday closing price . The London institution said the measure, along with other actions, will allow it to meet a 3% leverage target by June 2014. The Bank of England's Prudential Regulation Authority last month sprung the goal on lenders as part of a wider review of bank capital and revealed that both Barclays and mutually owned Nationwide Building Society had fallen short of the target. After lobbing by Nationwide, which argued that the "blunt" target made no allowances for the fact most of its loans were low-risk mortgages, the PRA gave the mutual until the end of 2015 to hit the 3% ratio.

Barclays also Tuesday said it would raise up to £2 billion through the issue of other qualifying Tier One securities; reduce leverage by £65 billion to £80 billion though "risk management actions"; and retain earnings to boost capital. It decided against accelerating asset sales because of the damage it would do to its business, it said.

"We believe this represents the right combination to meet the PRA's leverage target. It also enables us to maintain our planned lending growth and broader support of our customers and clients," said Barclays Chairman David Walker in a statement. "The Board and I are aware of the implications of a rights issue for shareholders. We hope to balance this with reduced uncertainty in the outlook for Barclays and with enhancement of our dividend payout from 2014."

Barclays released the announcement along with first-half results which showed net profit fell 22% to £2.47 billion because of restructuring charges. During the period Barclays took £2 billion in charges to meet the cost of compensation to consumers and small businesses who were "missold" insurance and interest-rate hedging products, respectively. Total first-half income slipped 3% to £15.1 billion.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,079.57 -42.44 -0.25%
S&P 500 1,996.74 -3.38 -0.17%
NASDAQ 4,557.6950 -11.9260 -0.26%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs