Barclays announces launch of new Global Contingent Capital index

By Tali Rackner

Norfolk, Va., June 9 – Barclays Bank plc announced the launch of a new Global Contingent Capital index, a multi-currency benchmark measuring the performance of investment-grade and high-yield contingent capital securities, according to a press release.

This standalone benchmark tracks the market of hybrid capital securities that do not qualify for other flagship Barclays aggregate, high-yield, capital securities or convertibles indexes.

The Barclays Global Contingent Capital index includes hybrid capital securities with explicit equity conversion or write-down loss-absorption mechanisms that are based on an issuer’s regulatory capital ratio or other explicit solvency-based triggers. Subindexes by currency, country, credit quality and capital security type are available as part of this family.

The inception date of this index is May 1, and the index universe contains 65 contingent capital issues with a market value of $98 billion as of May 31.

“[Contingent capital] issuance has steadily grown in recent years, and we anticipate further expansion of this market as financial institutions issue these bonds to help achieve required regulatory capital ratios,” Barclays head of benchmark index research Brian Upbin said in the release. “Though [contingent capital securities] are not eligible for broad-based bond indices such as the global aggregate, there are debt investors who hold these securities as out-of-index investments and need a benchmark of asset class risk and returns.”

Barclays is a financial services provider based in London.

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