Barclays gets holder votes to convert covered bonds into soft bullets

By Susanna Moon

Chicago, Nov. 9 – Barclays Bank plc said it secured the needed votes to amend four series of covered bonds into soft bullets at a meeting held Monday in London.

The bank sought to modify the following four series of covered bonds from hard bullets to soft bullets with an extended due date:

• €2 billion series 2009-1 4% covered bonds due 2019;

• €1.3 billion series 2010-2 4.25% covered bonds due 2022, with €1,273,500,000 outstanding;

• €1 billion series 2011-1 4% covered bonds due 2021; and

• €1.5 billion series 2011-2 3.625% covered bonds due 2016.

Quorum was met for each bond series and the measure passed as follows:

• 82.17% of 4% covered bonds due 2019 represented at the meeting, with 92.87% of votes cast in favor of the measure;

• 80.11% of 4.25% covered bonds due 2022 represented, with 93.11% voting in favor;

• 91.24% of 4% covered bonds due 2021 represented, with 97.92% voting for the measure; and

• 75.86% of 3.625% covered bonds due 2016 represented, with 92.46% voting for the measure.

The consent solicitation ended at 10 a.m. ET on Nov. 5. The solicitation began Oct. 16.

The early participation fee of 5 basis points will be paid to holders who submitted consents by 10 a.m. ET on Oct. 30, the early instruction date.

The payment date will be Nov. 12.

Those who gave their consents after the early deadline will not receive the early participation fee.

The early fee also required the proposal passing for that series and modifications to the conditions and the swap agreement of that series, but it was not conditioned on the proposal passing for the other series.

As previously announced, the bank also asked to modify the swap agreement for each series.

The amendments would align the terms of some older outstanding series with those commonly seen in the covered bond market to ensure cost efficiency, a previous press release noted.

The issuer previously said it is continually reviewing regulatory and market developments, as an active participant in the covered bond market.

The outstanding amount for the 4.25% covered bonds excludes the €26.5 million of the series 2010-2 covered bonds held by the issuer.

Barclays Bank plc (+44 203 134 8515 or eu.lm@barclays.com) is the solicitation agent. Lucid Issuer Services Ltd. (+44 20 7704 0880 or barclays@lucid-is.com) is the tabulation agent.

The bank is based in London.

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