Barclays plans 13% callable reverse convertibles tied to Chesapeake Energy

By Angela McDaniels

Tacoma, Wash., Dec. 21 - Barclays Bank plc plans to price callable reverse convertible notes due June 28, 2010 linked to the common stock of Chesapeake Energy Corp., according to an FWP filing with the Securities and Exchange Commission.

The six-month notes will pay 6.5% for an annualized coupon of 13%. Interest will be payable monthly.

If the closing price of Chesapeake Energy stock on March 23, 2010 is greater than or equal to the initial share price, the notes will be automatically called at par.

If the notes are not called, the payout at maturity will be par unless Chesapeake Energy stock falls below the protection level - 75% of the initial share price - during the life of the notes and finishes below the initial price. In that case, the payout will be a number of Chesapeake Energy shares equal to $1,000 divided by the initial share price.

The notes are expected to price Dec. 23 and settle Dec. 29.

Barclays Capital Inc. is the agent.

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