The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Tons weigh heavier in banks’ capital raising

Issuer: Barclays Bank plc Amount: $1 billion Launched: 18 September 2002 Bookrunner: Barclays Capital

Barclays Capital's September deal marks the first placing of the innovative Tier One Notes (Tons) structure in the US market. The AA rated perpetual yankee issue with a 30-year call option had a 6.86% coupon and was priced at 215 basis points over 30-year US treasuries. If the deal is not called after 30 years its coupon will be transformed into floating-rate Libor plus 1.73%. Any coupon repayment after the call date will have to be made via the Alternative Coupon Settlement Mechanism (ACSM). The ACSM is a method of funding coupon payments through share issuance. The trustee sells shares and distributes the cash proceeds to the securities holders. The ACSM is used to ensure that investors will be guaranteed the full amount due in perpetuity.

The unusual Tons structure used in the deal is a development of Barclays Capital's popular Reserve Capital Instrument (RCI) product that was first launched by Barclays Capital in June 2002.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of acces below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£68.33 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree