RNS Number : 1189H
Barclays PLC
31 October 2008
This announcement, including the Appendices, is not being issued and may not be distributed directly or indirectly in or into the United
States, Canada, Australia, Japan or South Africa or any jurisdiction into which the same would be unlawful. This announcement is for
information only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell or
issue, or subscribe for any securities, nor shall there be any sale of securities in the United States or in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
The securities referred to herein have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended, and may not
be offered, sold or transferred in the United States absent registration or an applicable exemption from registration requirements. The
Mandatorily Convertible Notes and Warrants referred to below must not at any time be converted or exercised in the United States. No public offering of securities will be made in the United
Kingdom, the United States or elsewhere.
31st October 2008
Barclays announces Capital Raising
The Board of Directors of Barclays today announces a proposal to raise up to �7.3 billion of additional capital from existing and new
strategic and institutional investors.
The Capital Raising, which is subject to approval by Barclays shareholders, will be effected through an issue of �3 billion of Reserve
Capital Instruments, with an associated issue of warrants, and an issue of up to �4.3 billion of Mandatorily Convertible Notes.
As a result of the Capital Raising, Barclays expects to fully satisfy its commitment, as announced to the market on 13th October 2008,
to raise new external capital as part of its overall plan to achieve the new higher capital targets set by the UK Financial Services
Authority for all UK banks.
The Capital Raising will:
* enable Barclays simultaneously to achieve its tier one and equity capital issuance commitments to the FSA with certainty and ahead
of the previously announced timetable;
* strengthen links with existing large shareholders and introduce a substantial new investor to Barclays; and
* provide the opportunity for existing institutional shareholders to participate in the Capital Raising by subscribing for
Mandatorily Convertible Notes.
The Board estimates that, taking into account the proceeds of the Capital Raising, on a pro forma basis (assuming issue and conversion
of �4.3 billion of Mandatorily Convertible Notes) Barclays would have reported a tier one ratio of 11.3% and an equity tier one ratio of
7.6% as at 30th June 2008. This excludes the impact of any future exercise of the Warrants.
Barclays has also today released its Interim Management Statement stating that Group profit before tax for the nine months ended 30th
September 2008 was slightly ahead of 2007. Income growth was strong, and costs grew broadly in line with the rate of income growth.
Impairment charges grew at a similar rate to the first half of the year. Third quarter 2008 results included a preliminary estimate of the
net benefits arising on the acquisition of Lehman Brothers North American investment banking and capital markets businesses; and net losses
from credit market writedowns of �129 million, comprising writedowns of �1.2 billion offset by �1.1 billion gains on the fair valuation of
issued notes. In October, credit spreads narrowed substantially leading to a reversal of �1 billion gains on the fair valuation of issued
notes.
Highlights of the Capital Raising
Key highlights of the Capital Raising include:
* An issue of �3 billion of Reserve Capital Instruments ('RCIs') to Qatar Holding and entities representing the beneficial interests
of HH Sheikh Mansour Bin Zayed Al Nahyan, a member of the Royal Family of Abu Dhabi ('HH Sheikh Mansour Bin Zayed Al Nahyan'). The RCIs
will pay an annual coupon of 14% until June 2019. In conjunction with this issue, Qatar Holding and HH Sheikh Mansour Bin Zayed Al Nahyan
have also subscribed (for a nominal consideration) for warrants ('Warrants') to subscribe at their option for up to 1,516,875,236 new
ordinary shares of Barclays PLC ('Ordinary Shares') with an exercise price of 197.775 pence per share (equal to the Average Barclays Closing
Price) or �3 billion in aggregate, representing 18.1% of Barclays existing issued ordinary share capital. The Warrants are exercisable at
any time for a five year term from the date of issue.
* An issue of �2.8 billion of Mandatorily Convertible Notes ('MCNs') to Qatar Holding, Challenger Universal Limited ('Challenger')
and HH Sheikh Mansour Bin Zayed Al Nahyan, and a further issue of up to �1.5 billion of MCNs to existing institutional shareholders and
other institutional investors by way of an accelerated non-underwritten bookbuild placing. The MCNs all carry the same terms and conditions.
The MCNs will pay an annual coupon of 9.75% until conversion into Ordinary Shares, which will occur on or before 30th June 2009.
Conversion will result in the issue of 2,805,396,799 new Ordinary Shares, representing 33.5% of Barclays existing issued ordinary share
capital. The conversion price is 153.276 pence, a discount of 22.5% to the Average Barclays Closing Price.
* Ordinary Shares to be issued upon conversion of the MCNs, and, as the case may be, the exercise of Warrants, will increase
Barclays equity tier one ratio, while the RCIs will qualify as innovative tier one capital to the extent they are within the innovative tier
one allowance as defined by the FSA.
Investors
Qatar Holding has agreed to invest �500 million in MCNs and �1.5 billion in RCIs, and has subscribed for Warrants to purchase up to �1.5
billion of Ordinary Shares. Challenger has agreed to invest �300 million in MCNs. Assuming the conversion of their MCNs and full exercise of
their Warrants, and taking into account their existing holdings of Barclays shares, Qatar Holding would hold 1,607,402,170 Ordinary Shares,
representing 12.7% of the fully diluted share capital (assuming the issue and conversion of �4.3 billion of MCNs and full exercise of
Warrants) (the 'Fully Diluted Share Capital') and Challenger would hold 353,704,737 Ordinary Shares, representing 2.8% of the Fully Diluted
Share Capital.
HH Sheikh Mansour Bin Zayed Al Nahyan has agreed to invest �2 billion in MCNs and �1.5 billion in RCIs, and subscribed for Warrants to
purchase up to �1.5 billion of Ordinary Shares. Assuming the conversion of their MCNs and full exercise of their Warrants, HH Sheikh Mansour
Bin Zayed Al Nahyan would be beneficially entitled to 2,063,273,339 Ordinary Shares, representing 16.3% of the Fully Diluted Share Capital.
Barclays has appointed Barclays Capital, Credit Suisse and JPMorgan Cazenove as joint bookrunners to undertake an accelerated
non-underwritten bookbuild placing of up to a further �1.5 billion of MCNs with existing institutional shareholders and other institutional
investors (the 'Institutional Placing').
John Varley, Group Chief Executive of Barclays, said:
"The capital raising announced today enables Barclays to meet the capital issuance plan agreed with the UK authorities following the
decision by the FSA to increase the capital ratio requirements for all UK banks. We are pleased to have the continuing support of Qatar
Holding and Challenger, and to welcome HH Sheikh Mansour Bin Zayed Al Nahyan as a substantial new investor, as well as enabling broad
participation by existing institutional shareholders. Today's capital raising provides certainty and speed of execution, and combined with
the strong third-quarter performance in a volatile operating environment enables us to continue to implement our strategy and build our
business by serving clients and customers around the world."
Marcus Agius, Chairman of Barclays, said:
"Given the continuing uncertainties in world capital markets, the Board of Barclays resolved to satisfy the capital raising requirements
agreed with the UK authorities without delay. This we have done. The Board believes that this maintains Barclays as a strong, independent
and well capitalised bank."
Details of the Capital Raising
Introduction
The Board of Directors of Barclays today announces a Capital Raising to raise up to �7.3 billion of new capital through the issue of
MCNs, RCIs and Warrants.
Capitalised terms used in this announcement have the meanings given in Appendix 1.
Reasons for the Capital Raising
On 13th October 2008, Barclays announced that, following the decision of the FSA to set stronger capital ratio requirements for all UK
banks, the Board had agreed a plan to increase the capital of Barclays through measures including the raising of over �6.5 billion of tier
one capital, of which �3 billion would be in the form of preference shares and the remainder would be in the form of Ordinary Shares.
In common with other large UK-headquartered banks, Barclays has had detailed discussions with the FSA regarding its balance sheet and
capital position. Target capital levels have been agreed with the FSA which include consideration of a number of possible stress scenarios.
The Capital Raising, together with other measures management is taking in the business to improve Barclays capital position, are in
accordance with the plans agreed with the FSA.
The Board has completed a thorough exploration of possible capital raising structures and arrangements to meet its commitment to the
FSA. A fully pre-emptive offer to all Shareholders would require a period of market risk exposure of up to some two months which the Board
believes represents a risk that is unacceptable to shareholders at this time. The Board has concluded that the Capital Raising provides the
best combination of financial terms, certainty and speed for Barclays, which are important given current market conditions. The Board
attaches a high degree of importance to pre-emption rights generally and has sought to recognise these to the extent possible in the context
of the Capital Raising by giving institutional investors the ability to participate in the issue of MCNs.
The objective of the plan to raise tier one capital via the issue of preference shares will be met through the issuance of the RCIs.
Coupons on the RCIs should be tax deductible for Barclays and the RCIs qualify as tier one capital, within the innovative tier one allowance
as defined by the FSA. The issuance of MCNs rather than Ordinary Shares enables certainty of commitment of the required ordinary equity
within a short period of time and permits the immediate economic participation of certain significant investors, prior to the receipt of any
required regulatory approvals.
Barclays remains committed to mobilise an additional �1.5 billion in equity resources from balance sheet and operational efficiencies
referred to in the announcement of 13th October 2008. Barclays also announced on 13th October 2008 that, in the light of the new capital
ratios agreed with the FSA and in recognition of the need to maximise capital resources in the current economic climate, the Board has
concluded that it would not be appropriate to recommend the payment of a final dividend for 2008.
The Board estimates that, taking into account the proceeds of the Capital Raising, on a pro forma basis (assuming the issue and full
conversion of �4.3 billion of MCNs) Barclays would have reported a tier one ratio of 11.3% and an equity tier one ratio of 7.6% as at 30th
June 2008. This excludes the impact of any future exercise of the Warrants.
Details of the Mandatorily Convertible Notes
The MCNs will carry an annual coupon of 9.75%, payable quarterly in arrears, until conversion into Ordinary Shares. The MCNs will have a
mandatory conversion date of 30th June 2009. Conversion of any outstanding MCNs will occur on the mandatory conversion date and will be at
the holder's option up until the fifth business day prior to such date. The conversion price is fixed at 153.276 pence, a discount of 22.5%
to the Average Barclays Closing Price (subject to certain limited adjustment events summarised in Appendix 2).
Qatar Holding has agreed to subscribe for �500 million of MCNs and Challenger has agreed to subscribe for �300 million of MCNs. HH
Sheikh Mansour Bin Zayed Al Nahyan has agreed to subscribe for �2 billion of MCNs.
Barclays Capital, Credit Suisse and JPMorgan Cazenove, who are acting as joint bookrunners, will undertake an accelerated
non-underwritten bookbuild placing of up to an additional �1.5 billion of MCNs to existing institutional shareholders and other
institutional investors. Books are open with immediate effect and are expected to close at 5:00pm today but may be closed earlier or later
at the discretion of the joint bookrunners and without further notice. Further details of the MCNs and the bookbuild placing are set out in
Appendices 2 and 3.
The issue of the MCNs is conditional upon receipt of necessary shareholder approvals. Subject to obtaining the required shareholder
consents, the MCNs are expected to be issued on the third business day following the General Meeting.
The MCNs will not qualify as capital until conversion into Ordinary Shares. Applications will be made for the MCNs to be admitted to the
Official List of the UKLA and to trading on the London Stock Exchange's regulated market. Barclays has undertaken to apply for the Ordinary
Shares to be issued upon conversion of the MCNs to be admitted to listing on the Official List of the UKLA and admitted to trading on the
London Stock Exchange's regulated market.
Details of the Reserve Capital Instruments and Warrants
The RCIs are perpetual securities, redeemable in whole (but not in part) at the option of Barclays Bank PLC from June 2019. The RCIs
will pay an annual coupon of 14% until June 2019 and 3-month LIBOR plus 13.4% thereafter. The initial coupon represents a cost to Barclays
of approximately 10% on an after-tax basis. The RCIs will qualify as innovative tier one capital to the extent they are within the
innovative tier one allowance as defined by the FSA.
Qatar Holding and HH Sheikh Mansour Bin Zayed Al Nahyan have each agreed to subscribe for �1.5 billion of RCIs. In conjunction with
this subscription, Qatar Holding and HH Sheikh Mansour Bin Zayed Al Nahyan have each subscribed (for a nominal consideration) for Warrants
to subscribe for up to �1.5 billion of new Ordinary Shares. The exercise price of the Warrants will be 197.775 pence , equal to the Average
Barclays Closing Price, subject to certain anti-dilutive provisions. The Warrants are exercisable at any time for a five year period
following issue.
The issue of the RCIs is conditional upon receipt of necessary shareholder approvals. Subject to obtaining the required shareholder
consents, the RCIs are expected to be issued on the third business day following the General Meeting. The Warrants were subscribed for
unconditionally today but exercise is conditional upon obtaining necessary shareholder approvals and issuance of the RCIs. The original
subscribers for the Warrants are entitled to a reduction in the warrant exercise price in the event that Barclays issues further Ordinary
Shares by way of a rights issue between 1 July 2009 and 30 June 2011 and the share price at the time of the rights issue is less than
197.775 pence.
Applications will be made for the RCIs and the Warrants to be admitted to the Official List of the UKLA and to trading on the London
Stock Exchange's regulated market (or, in the case of the Warrants, an alternative recognised investment exchange or regulated market). The
Warrants may be traded separately from the RCIs.
Enlarged share capital
Conversion of the MCNs would result in the issue of 2,805,396,799 new Ordinary Shares, equivalent to 33.5% of Barclays existing ordinary
share capital (assuming issue and conversion of �4.3 billion of MCNs). Full exercise of the Warrants would result in the issue of a further
1,516,875,236 new Ordinary Shares, equivalent to 18.1% of Barclays existing ordinary share capital. The resultant shareholdings of Qatar
Holding, Challenger and HH Sheikh Mansour Bin Zayed Al Nahyan are set out below:
Investor MCNs RCIs/Warrants Holding of current Holding of issued
issued ordinary ordinary share
share capital3 capital after
conversion and
exercise4
�m Number of Ordinary �m Number of Ordinary
Shares1 Shares2
Qatar Holding 500 326,208,930 1,500 758,437,618 6.2% 12.7%
Challenger 300 195,725,358 - - 1.9% 2.8%
HH Sheikh Mansour Bin Zayed Al 2,000 1,304,835,721 1,500 758,437,618 - 16.3%
Nahyan
Institutional investors5 1,500 978,626,790 - - NA NA
Total 4,300 2,805,396,799 3,000 1,516,875,236 NA NA
1 On conversion of the MCNs
2 On exercise of the Warrants
3 Based on 8,370,447,337 Ordinary Shares in issue as at 30th October 2008
4 Pro-forma assuming issue and full conversion of �4.3 billion of MCNs and exercise in full of the Warrants
5 Assuming �1.5 billion of MCNs issued pursuant to the Institutional Placing
Commissions and fees
Net proceeds of the Capital Raising are expected to be up to �7.0 billion, after commissions, fees and expenses of �0.3 billion.
Qatar Holding, Challenger and HH Sheikh Mansour Bin Zayed Al Nahyan will each receive a commission of 4 per cent. of the principal
amount of the MCNs for which they have respectively agreed to subscribe.
Qatar Holding and HH Sheikh Mansour Bin Zayed Al Nahyan will each receive a commission of 2 per cent. of the principal amount of the
RCIs for which they have respectively agreed to subscribe.
In addition, Qatar Holding will receive a fee of �66 million for having arranged certain of the subscriptions in the Capital Raising.
Credit Suisse and JPMorgan Cazenove will each receive a fee of 0.75 per cent. of the principal amount of the MCNs placed in the
Institutional Placing.
Credit Suisse and JPMorgan Cazenove will each receive a fee of �900,000 (�1.8 million in total) in respect of their roles assisting
Barclays in relation to the RCIs.
Barclays will pay the commissions on the due date for issue of the MCNs and RCIs. The commissions are payable even if the proposed
resolutions are not passed at the General Meeting.
Current trading and prospects
Barclays has also today released its Interim Management Statement stating that Group profit before tax for the nine months ended 30th
September 2008 was slightly ahead of 2007. Income growth was strong, and costs grew broadly in line with the rate of income growth.
Impairment charges grew at a similar rate to the first half of the year. Third quarter 2008 results included a preliminary estimate of the
net benefits arising on the acquisition of Lehman Brothers North American investment banking and capital markets businesses; and net losses
from credit market writedowns of �129 million, comprising writedowns of �1.2 billion offset by �1.1 billion gains on the fair valuation of
issued notes. In October, credit spreads narrowed substantially leading to a reversal of �1 billion gains on the fair valuation of issued
notes.
Dividend policy
As announced on 13th October 2008, in the light of the new capital ratios agreed with the FSA and in recognition of the need to maximise
capital resources in the current economic climate, the Board has concluded that it would not be appropriate to recommend the payment of a
final dividend for 2008. The Board intends to resume dividend payments in the second half of 2009, at which time it is intended to pay
dividends quarterly.
Approvals
The issue of the RCIs and the MCNs, and exercise of the Warrants, are conditional upon receipt of the requisite shareholder approvals.
The Board has resolved to convene a General Meeting on or around 24th November 2008 to approve, amongst other matters, an increase in the
Company's authorised ordinary share capital sufficient to permit completion of the Capital Raising, and to grant authorities for the issue
of new Ordinary Shares in accordance with the terms of the MCNs and the Warrants.
A circular convening the General Meeting will be sent to Shareholders on or around 8th November. Copies of the circular will be
forwarded to the FSA and will be available for inspection at the UKLA's Document Viewing Facility, which is situated at: The Financial
Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS.
The Board will unanimously recommend that shareholders vote in favour of all the resolutions to be proposed at the General Meeting, as
the Directors intend to do in respect of their own beneficial holdings.
The acquisition by Qatar Holding, Challenger and HH Sheikh Mansour Bin Zayed Al Nahyan of the full amount of the shareholdings resulting
from the conversion of their MCNs and the exercise of their Warrants will require certain approvals to be obtained from, and filings to be
made with, regulators and other governmental authorities in a number of countries in which Barclays operates. Qatar Holding, Challenger and
HH Sheikh Mansour Bin Zayed Al Nahyan have undertaken to Barclays not to deliver a conversion notice under the MCNs or exercise their rights
under the Warrants to the extent that certain relevant approvals and filings have not been obtained and made. In addition, the terms of the
MCNs envisage that where a holder of MCNs does not deliver a conversion notice prior to the mandatory conversion of the MCNs, the Ordinary
Shares in Barclays that would otherwise have been issued to that holder on such conversion will be issued to the trustee of the MCNs and
sold for that holder's benefit.
Expected timetable of principal events
The expected timetable of the principal events is set out below:
Placing of MCNs to institutional investors 31st October 2008
Posting of Barclays shareholder circular 8th November 2008
General Meeting 24th November 2008
Issuance of MCNs and RCIs 27th November 2008
Mandatory conversion date of MCNs 30th June 2009
Last date for exercise of the Warrants 31st October 2013
Advisers
Barclays Capital is acting as Sole Global Coordinator, and Barclays Capital, Credit Suisse and JPMorgan Cazenove are acting as Joint
Bookrunners in respect of the placing of MCNs to existing shareholders and other institutional investors.
Barclays Capital is acting as Sole Financial Adviser in respect of the Capital Raising, and Sole Placing Agent in respect of the
investment by Qatar Holding, Challenger and HH Sheikh Mansour Bin Zayed Al Nahyan
ANALYST AND INVESTOR INFORMATION
A conference call for analysts and institutional investors will be hosted by John Varley, Barclays Group Chief Executive. The call will
commence at 09.30 (GMT) 31st October 2008.
The telephone number is 0845 401 9092 (UK callers) or +44 (0) 20 3023 4419 (all other locations), with the access code 'Barclays
Announcement'. The briefing will also be available as a live audio webcast and accompanying slide presentation on the Investor Relations
website at: www.barclays.com/investorrelations and a recording will be posted on the website.
ENQUIRIES
ANALYSTS AND INVESTORS
Mark Merson +44 (0) 20 7116 5752
John McIvor +44 (0) 20 7116 2929
MEDIA
Howell James +44 (0) 20 7116 6060
Alistair Smith +44 (0) 20 7116 6132
About Barclays
Barclays is a major global financial services provider engaged in retail and commercial banking, credit cards, investment banking,
wealth management and investment management services with an extensive international presence in Europe, the United States, Africa and Asia.
With over 300 years of history and expertise in banking, Barclays operates in over 50 countries and employs approximately 150,000 people.
Barclays moves, lends, invests and protects money for over 42 million customers and clients worldwide. For further information about
Barclays, please visit our website www.barclays.com.
About Qatar Holding
Qatar Holding LLC is a wholly owned subsidiary of Qatar Investment Authority which was founded by the State of Qatar in 2005 to
strengthen the country's economy by diversifying into new asset classes. Building upon the heritage of investments dating back more than
three decades, its growing portfolio of long-term strategic investments complement the State of Qatar's wealth in natural resources. Qatar
Holding was incorporated in April 2006 within the jurisdiction of Qatar Financial Centre as the prime vehicle for strategic and direct
investments by the State of Qatar. Headquartered in the Qatar Financial Centre, Qatar Holding is structured to operate at the very highest
levels of global investing, with a planned presence in all major capital markets.
About Challenger
Challenger Universal Limited was incorporated in June 2008 in the British Virgin Islands as a special purpose vehicle to hold shares in
Barclays. Challenger is indirectly and beneficially owned by His Excellency Sheikh Hamad Bin Jassim Bin Jabr Al-Thani (the chairman of Qatar
Holding) and his family.
About HH Sheikh Mansour Bin Zayed Al Nahyan
The investment by HH Sheikh Mansour Bin Zayed Al Nahyan is being made through PCP Gulf Invest 1 Limited, PCP Gulf Invest 2 Limited and
PCP Gulf Invest 3 Limited. These companies were incorporated in Jersey in October 2008 as special purpose vehicles to hold respectively
MCNs, RCIs and Warrants. The companies represent beneficial interests of HH Sheikh Mansour Bin Zayed Al Nahyan. Amongst other business
interests HH Sheikh Mansour Bin Zayed Al Nahyan is Minister of Presidential Affairs of the UAE and Chairman of International Petroleum
Investment Company.
Forward Looking Statements
This announcement contains certain forward-looking statements with respect to certain of the Group's plans and its current goals and
expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. Barclays
cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from
those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate
only to historical or current facts. Forward-looking statements sometimes use words such as " may", "will", "seek", "continue", "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe" or other words of similar meaning. Examples of
forward-looking statements include, among others, statements regarding the Group's future financial position, income growth, impairment
charges, business strategy, projected levels of growth in the banking and financial markets, projected costs, estimates of capital expenditures, and plans and objectives for future operations and other
statements that are not historical fact.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances,
including, but not limited to, UK domestic and global economic and business conditions, the effects of continued volatility in credit
markets, liquidity conditions in the market, market related risks such as changes in interest rates and exchange rates, effects of changes
in valuation of credit market exposures, change in valuation of issued notes, the policies and actions of governmental and regulatory
authorities, changes in legislation, the further development of standards and interpretations under IFRS applicable to past, current and
future periods, evolving practices with regard to the interpretation and application of standards under IFRS, progress in the integration of
the North American investment banking and capital markets operations of Lehman Brothers into the Group's business and the quantification of
the benefits resulting from such acquisition, the outcome of pending and future litigation, the success of future acquisitions and other strategic transactions and the impact of competition - a number of
which factors are beyond the Group's control. As a result, the Group's actual future results may differ materially from the plans, goals,
and expectations set forth in the Group's forward-looking statements. Any forward-looking statements made herein speak only as of the date
they are made. Except as required by the FSA, the London Stock Exchange or applicable law, Barclays expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any
change in Barclays expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is
based.
Nothing in this announcement is intended, or is to be construed, as a profit forecast or to be interpreted to mean that earnings per
Barclays Ordinary Share for the current or future financial years will necessarily match or exceed the historical published earnings per
Barclays Ordinary Share.
This announcement is not a prospectus but an advertisement. A prospectus relating to the admission for trading of RCIs (the "RCI
Prospectus") is expected to be published on or around the issue date of the RCIs and a prospectus relating to the admission for trading of
MCNs (the "MCN Prospectus") is expected to be published on or around the issue date of the MCNs. This announcement may not be passed on in
the United Kingdom except to persons in circumstances in which Section 21(1) of the Financial Services and Markets Act 2000 does not apply.
This announcement has been issued by and is the sole responsibility of Barclays. No representation or warranty, express or implied, is
or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Credit Suisse Securities (Europe)
Limited or JPMorgan Cazenove Limited or by any of their respective affiliates or agents as to or in relation to, the accuracy or
completeness of this announcement or any other written or oral information made available to or publicly available to any interested party
or its advisers, and any liability therefore is expressly disclaimed.
When published, copies of the RCI Prospectus and the MCN Prospectus will be available from the website of the London Stock Exchange.
This announcement, including the Appendices, is not being issued and may not be distributed directly or indirectly in or into the United
States, Canada, Australia, Japan and South Africa or any jurisdiction into which the same would be unlawful. This announcement is for
information only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell or
issue, or subscribe for any securities, nor shall there be any sale of securities in the United States or in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The
securities referred to herein have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended, and may not be
offered, sold, exercised or transferred in the United States absent registration or an applicable exemption from registration requirements.
No public offering of securities will be made in the United Kingdom, the United States or elsewhere.
The MCNs may not be offered or sold directly or indirectly within the borders of the People's Republic of China (which, for such
purposes, does not include the Hong Kong or Macau Special Administrative Regions or Taiwan) (the "PRC"). This announcement or the
information contained herein has not been approved by or registered with any relevant governmental authorities in the PRC and may not be
offered for sale in the PRC. Investors with registered addresses in, or who are resident or ordinarily resident in, or a citizen of, the PRC
are responsible for obtaining all relevant government regulatory approvals/licences (if any) themselves, including, but not limited to, any
which may be required from the State Administration of Foreign Exchange and other competent regulatory authorities and complying with all
relevant PRC regulations (if applicable), including, but not limited to, any relevant foreign exchange regulations and/or overseas
investment regulations.
This announcement has not been registered as a prospectus with the Monetary Authority of Singapore, and the offer of securities in
Barclays is made in reliance on the offering exemption under Section 273(1)(cd) of the Securities and Futures Act, Chapter 289 of Singapore
(the "SFA"). Accordingly, this announcement and any other document or material in connection with the offer or sale of securities may not be
circulated or distributed, nor may the securities be offered or sold, whether directly or indirectly, to any person in Singapore other than:
(i) to a shareholder of Barclays pursuant to Section 273(1)(cd) of the SFA; or otherwise (ii) pursuant to, and in accordance with the
conditions of, any other applicable provision of the SFA.
The recipient of this announcement understands, acknowledges and agrees that this announcement has not been approved by the UAE Central
Bank, the Emirates Securities or Commodities Authority ("ESCA") or any other authorities in the UAE, nor has the placement agent, if any,
received authorisation or licensing from the UAE Central Bank, ESCA or any other authorities in the United Arab Emirates to market or sell
securities or other investments within the United Arab Emirates. No marketing of any securities or services has been or will be made from
within the United Arab Emirates and no subscription to any securities or other investments may or will be consummated within the United Arab
Emirates. It should not be assumed that the placement agent, if any, is a licensed broker, dealer or investment advisor under the laws
applicable in the United Arab Emirates, or that it advises individuals resident in the United Arab Emirates as to the appropriateness of
investing in or purchasing or selling securities or other securities. The securities referred to herein are not to be offered or sold directly or indirectly to the public in the United Arab
Emirates. This announcement does not constitute a public offer of securities or units in funds in the United Arab Emirates in accordance
with the Commercial Companies Law, Federal Law No. 8 of 1984 (as amended) or otherwise.
The recipient of this announcement understands, acknowledges and agrees that the securities referred to herein have not been and will
not be offered, sold or publicly promoted or advertised in the Dubai International Financial Centre other than in compliance with laws
applicable in the Dubai International Financial Centre, governing the issue, offering or sale of securities. The Dubai Financial Services
Authority has not approved this announcement nor taken steps to verify the information set out in it, and has no responsibility for it.
This announcement has not been filed with, reviewed or approved by the Qatar Central Bank, the Qatar Financial Centre Regulatory
Authority or any other relevant Qatar governmental body or securities exchange, nor any foreign governmental body or securities exchange.
The placing is not and will not be made, directly or indirectly, in the United States, Canada, Australia, Japan or South Africa or any
other jurisdiction in which the same would be prohibited (the "Restricted Jurisdictions") unless by means of lawful prior registration or
qualification under the applicable laws of the Restricted Jurisdiction, or under an exemption from such requirements. Accordingly, copies of
this announcement, including the appendices, are not being, and must not be, mailed or otherwise distributed or sent in, into or from any
Restricted Jurisdiction into which the same would be unlawful. Persons receiving this announcement (including, without limitation,
custodians, nominees and trustees) must inform themselves about, and observe, any relevant restrictions and must not distribute, mail or
send it in, into or from any Restricted Jurisdiction, and so doing may render any purported acceptance of the placing invalid. Persons
(including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this announcement should seek appropriate advice before taking any action.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE CAPITAL RAISING. THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS
AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT (A) PERSONS IN MEMBER STATES OF THE EUROPEAN
ECONOMIC AREA WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF DIRECTIVE 2003/71/EC; (B) IN THE UNITED KINGDOM,
QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5)
(INVESTMENT PROFESSIONALS) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); OR (II) ARE
PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC OF THE ORDER; OR (III) ARE PERSONS
TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS". THIS ANNOUNCEMENT
(INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT
(INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN
ONLY WITH RELEVANT PERSONS. NEITHER THE APPENDICES NOR THE ANNOUNCEMENT OF WHICH THEY FORM A PART CONSTITUTE AN OFFER FOR SALE OR
SUBSCRIPTION OF ANY SECURITIES IN BARCLAYS.
Barclays Capital, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Barclays and Barclays
Bank PLC and for no-one else in connection with the Capital Raising, and will not be responsible to anyone other than Barclays and Barclays
Bank PLC for providing the protections afforded to customers of Barclays Capital nor for providing advice to any other person in relation to
the Capital Raising or any other matter referred to herein.
Credit Suisse Securities (Europe) Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting for Barclays
and Barclays Bank PLC and for no-one else joint bookrunner in relation to the placing of MCNs to existing shareholders and other
institutional investors, and will not be responsible to any other person for providing the protections afforded to customers of Credit
Suisse Securities (Europe) Limited nor for providing advice to any other person in relation to the offering of MCNs to existing
shareholders and other institutional investors or contents of this announcement or any other matter referred to herein.
JPMorgan Cazenove Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting for Barclays and Barclays Bank
PLC and for no-one else in connection with the Capital Raising, and will not be responsible to anyone other than Barclays and Barclays Bank
PLC for providing the protections afforded to customers of J.P.Morgan Cazenove Limited nor for providing advice to any other person in
relation to the Capital Raising or any other matter referred to herein.
Barclays Capital, Credit Suisse Securities (Europe) Limited and JPMorgan Cazenove Limited are not underwriting the placing of MCNs to
existing shareholders and other institutional investors.
Neither the content of Barclays website nor any website accessible by hyperlinks on Barclays website is incorporated in, or forms part
of, this announcement.
APPENDIX 1
DEFINITIONS
"�" means the lawful currency of the United Kingdom;
"Average Barclays Closing means the average of the closing middle market quotations of a
Price" Barclays Ordinary Share as derived from the Daily Official List on
29th and 30th of October 2008, being 197.775 pence;
"Barclays" or the "Company" means Barclays PLC;
"Board" or "Board of means the board of directors of Barclays;
Directors"
"Capital Raising" means the proposed transactions described in this announcement;
"Challenger" means Challenger Universal Limited, a company representing the
beneficial interests of His Excellency Sheikh Hamad Bin Jassim Bin
Jabr Al-Thani, the chairman of Qatar Holding, and his family;
"Credit Suisse" means Credit Suisse Securities (Europe) Limited;
"Daily Official List" means the daily record setting out the prices of all trades in
shares and other securities conducted on the London Stock
Exchange;
"FSA" means the UK Financial Services Authority;
"Fully Diluted Share Capital" means the fully diluted share capital of Barclays PLC assuming
maximum issue and conversion of MCNs and full exercise of
Warrants, being 12,692,719,372 ordinary shares;
"General Meeting" means the general meeting of Barclays to be convened as soon as
reasonably practicable to seek approvals relating to the Capital
Raising;
"Group" means Barclays and its subsidiary undertakings;
"HH Sheikh Mansour Bin Zayed means PCP Gulf Invest 1 Limited, PCP Gulf Invest 2 Limited and PCP
Al Nahyan" Gulf Invest 3 Limited, entities representing the beneficial
interests of HH Sheikh Mansour Bin Zayed Al Nahyan
"IFRS" means International Financial Reporting Standards;
"JPMorgan Cazenove" means JPMorgan Cazenove Limited;
"London Stock Exchange" means London Stock Exchange PLC;
"Official List" means the official list of the UKLA;
"Ordinary Shares" means Ordinary Shares of 25 pence each in the capital of Barclays;
"Qatar Holding" means Qatar Holding LLC;
"Shareholder" means a holder of Ordinary Shares;
"UK" or "United Kingdom" means the United Kingdom of Great Britain and Northern Ireland;
and
"UKLA" or the "UK Listing means the FSA in its capacity as the competent authority for
Authority" listing under Part VI of the UK Financial and Markets Act 2000.
APPENDIX 2
SUMMARY OF TERMS AND CONDITIONS
Barclays Bank PLC �4.3 billion Mandatorily Convertible Notes (the MCNs)
Issuer: Barclays Bank PLC
Securities Offered: Up to �4.3 billion 9.75 per cent. Mandatorily
Convertible Notes due 2009 convertible into Ordinary
Shares
Issue Size: Up to �4.3 billion
Currency: Pounds Sterling
Form and Denomination: Bearer form in denominations of �50,000
Status: Senior Unsecured
Issue Price: 100%
Mandatory Conversion Date: 30 June 2009
Maturity Date: 30 September 2009
Annual Coupon: 9.75%, payable quarterly in arrears
Mandatory Conversion: Unless previously purchased and cancelled or
converted, each MCN will be mandatorily and
automatically converted on the Mandatory Conversion
Date for such number of Ordinary Shares as results
from dividing the principal amount of the MCN by the
Conversion Price in effect on the Mandatory
Conversion Date (rounded down to the nearest whole
number of Ordinary Shares). Holders of MCNs shall not
be entitled to receive fractions of an Ordinary Share
and shall not be entitled to receive a cash payment
in lieu thereof
Optional Conversion: Each holder of an MCN shall have the right at any
time from the business day following the Closing Date
until the close of business on the fifth business day
prior to the Mandatory Conversion Date to convert
each MCN for such number of Ordinary Shares as
results from dividing the principal amount of the MCN
by the Conversion Price in effect on the conversion
date (rounded down to the nearest whole number of
Ordinary Shares). Holders of MCNs shall not be
entitled to receive fractions of an Ordinary Share
and shall not be entitled to receive a cash payment
in lieu thereof
Conversion Price: 153.276 pence, representing a 22.5% discount to the
Average Barclays Closing Price, subject to adjustment
as described below
Adjustment to the Conversion The issue of new shares or certain other securities
Price: and rights of Barclays PLC, at any time commencing on
the Issue Date and ending on the Optional Conversion
Date or on the Mandatory Conversion Date, at a price
(the Future Placing Price) lower than the then
current Conversion Price will (subject to exceptions
for Ordinary Shares issued pursuant to employee share
schemes, under the Warrants or as a result of certain
corporate events) result in a downward adjustment to
the Conversion Price (subject to a minimum Conversion
Price of the then par value per Ordinary share
(currently 25 pence) so that it equals the Future
Placing Price. The Conversion Price will also be
subject to adjustment if Barclays PLC distributes an
extraordinary dividend or certain dilutive events
occur, including, bonus issues, rights issues or an
adjustment to the nominal value or redenomination of
the Ordinary Shares
Fees and commissions: Arrangement fee of �66 million payable to Qatar
Holding. Commitment fee of 4% of the amount of MCNs
agreed to be subscribed, payable to Qatar Holding and
HH Sheikh Mansour Bin Zayed Al Nahyan, such that
Qatar Holding will receive �20 million and HH Sheikh
Mansour Bin Zayed Al Nahyan will receive �80 million
Closing & Settlement Date: The third business day after the date on which the
requisite shareholder approvals are received
Failure by a holder of MCNs on In the event that a holder of MCNs does not deliver a
Mandatory Conversion: conversion notice and confirm its instructions to
transfer its interest in the MCNs to the paying and
conversion agent and pay the conversion expenses to
the Issuer on or prior to 4 business days prior to
the Mandatory Conversion Date, the Ordinary Shares to
which such holder is entitled will be issued to the
trustee of the MCNs (or one or more other duly
appointed nominees) or as the trustee may direct on
the Mandatory Conversion Date and sold by or on
behalf of the trustee (or such nominees) as soon as
practicable. Subject to the deduction of costs and
expenses, the net proceeds of sale shall be
distributed rateably to the relevant holders
Taxation: Payments in respect of MCNs will be made subject to
any withholding or deduction for or on account of
taxes or as required by law. There is no requirement
to pay any additional or further amounts to holders
in respect of such withholding or deduction
Governing Law: English Law
Listing of the MCNs: Applications to be made for admission to listing on
the Official List of the UK Listing Authority and to
trading on the London Stock Exchange.
APPENDIX 3
FURTHER DETAILS OF THE PLACING
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES, CANADA,
AUSTRALIA OR JAPAN OR ANY JURISDICTION INTO WHICH THE SAME WOULD BE UNLAWFUL.
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THE ANNOUNCEMENT AND THIS APPENDIX (WHICH FORMS PART OF THE
ANNOUNCEMENT) AND THE TERMS AND CONDITIONS SET OUT IN THE ANNOUNCEMENT AND THIS APPENDIX ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED
ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF
DIRECTIVE 2003/71/EC; (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS
RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) (INVESTMENT PROFESSIONALS) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL
PROMOTION) ORDER 2005 (THE "ORDER"); OR (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED
ASSOCIATIONS, ETC OF THE ORDER); OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING
REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY
TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY
WITH RELEVANT PERSONS. NEITHER THIS APPENDIX NOR THE ANNOUNCEMENT OF WHICH IT FORMS PART CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY
SECURITIES IN THE ISSUER.
In particular, the MCNs referred to in this announcement have not been and will not be registered under the US Securities Act of 1933,
as amended (the "Securities Act") and may not be offered, sold, exercised or transferred within the United States (as required in Regulation
S under the Securities Act) except pursuant to an exemption from, or as part of a transaction not subject to, the registration requirements
of the Securities Act. The MCNs are being offered and sold outside the United States only and in accordance with Regulation S under the
Securities Act.
The MCNs have not been approved or disapproved by the U.S. Securities and Exchange Commission, any State securities commission or other
regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or
the accuracy or adequacy of this announcement. Any representation to the contrary is unlawful.
The relevant clearances have not been, and nor will they be, obtained from the securities commission of any province or territory of
Canada; no prospectus has been lodged with or registered by, the Australian Securities and Investments Commission or the Japanese Ministry
of Finance; and the MCNs have not been, and nor will they be, registered under or offered in compliance with the securities laws of any
state, province or territory of Canada, Australia or Japan. Accordingly, the MCNs may not (unless an exemption under the relevant securities
laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia or Japan
or any other jurisdiction outside the United Kingdom where it would be unlawful to do so.
Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of
this Appendix or this announcement should seek appropriate advice before taking any action.
The MCNs to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock
Exchange.
Neither the content of Barclays' website nor any website accessible by hyperlinks on Barclays' website is incorporated in, or forms part
of, this announcement.
If you have been invited and choose to participate in the placing of the �1.5 billion in aggregate principal amount of 9.75 per cent.
Mandatorily Convertible Notes due 2009 (the "MCNs") proposed to be issued by Barclays Bank PLC (the "Issuer") and which will carry the right
to be converted into fully paid ordinary shares ("Ordinary Shares") currently of 25 pence each in the capital of Barclays PLC ("Barclays")
(the "Placing"), by making an oral or written offer to subscribe for MCNs (the "Placees"), you will be deemed to have read and understood
this Announcement, including this Appendix, the Interim Management Statement and the Terms and Conditions (as defined below) in their
entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements and
undertakings contained in this Appendix to the Issuer, Barclays and the Bookrunners (defined below). In particular, each such Placee
represents, warrants and acknowledges that:
(a) it is a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any MCNs that are
allocated to it for the purposes of its business; and
(b) it is outside the United States and/or it is subscribing for the MCNs in an "offshore transaction" (within the meaning of
Regulation S under the Securities Act).
See "Representations, Warranties and Undertakings" below for further representations and warranties that Placees (and any person acting
on a Placee's behalf) will be deemed to make by participating in the Placing.
Details of issue and of the MCNs
Of the �4.3 billion in aggregate principal amount of the MCNs which may be issued pursuant to the Capital Raising, �2.8 billion in
aggregate principal amount of MCNs has been subscribed by Qatar Holding, Challenger and HH Sheikh Mansour Bin Zayed Al Nahyan (the
"Strategic Investors"). Barclays Capital, Credit Suisse Securities (Europe) Limited ("CS") and JPMorgan Cazenove Limited ("JPMC", and
together with Barclays Capital and CS, the "Bookrunners"), as agents of the Company, are offering up to �1.5 billion in aggregate principal
amount of MCNs to existing institutional shareholders and other potential institutional investors via the Placing. The aggregate principal
amount of MCNs which the Issuer will issue to Placees shall not exceed �1.5 billion (or such greater amount as may be agreed between the
Issuer and the Bookrunners).
No element of the Placing is underwritten. The MCNs issued to the Strategic Investors and to existing institutional shareholders and
other potential institutional investors will carry the same terms and conditions and will rank pari passu among themselves.
The MCNs will pay an annual coupon of 9.75%, payable quarterly in arrears, until conversion into Ordinary Shares. The MCNs have a
mandatory conversion date of 30 June 2009. Conversion of any outstanding MCNs will occur automatically on the mandatory conversion date and
will be at the holder's option up until the fifth business day prior to such date. Assuming no adjustment to the Conversion Price,
Conversion will result in the issue of 2,805,396,799 new Ordinary Shares, representing 33.5% of Barclays' existing issued Ordinary Share
capital. The issue price of the MCNs will be 100 per cent. of their principal amount (the "Issue Price"). The MCNs will be issued in
denominations of �50,000 and integral multiples thereof and will carry the right to convert into Ordinary Shares. Timing of conversion is at
noteholders' option but it must occur by 30 June 2009. The initial conversion price is 153.276 pence, a discount of 22.5% to the average of
the closing middle market quotations of an Ordinary Share as derived from the daily record setting out the prices of all trades in shares and other securities conducted on the London Stock Exchange on the
29th and 30th of October 2008, being 197.775 pence, subject to certain adjustments to be contained in the terms and conditions of the MCNs
(the "Terms and Conditions").
The issue of the MCNs is dependent upon Barclays receiving the necessary corporate approval from its Shareholders at the general meeting
of Shareholders to be held on or around 24 November 2008 (or, if such meeting is adjourned, at any such adjourned meeting) in relation to,
amongst other things: (i) an increase in the authorised Ordinary Share capital of Barclays sufficient to allow the conversion of the MCNs;
(ii) granting the directors of Barclays authority pursuant to section 80 of the Companies Act 1985 to allot a sufficient number of Ordinary
Shares to enable each holder to convert its MCNs in full; and (iii) the disapplication of pre-emption rights pursuant to Section 95 of the
Companies Act 1985 in order to allow Warrants in respect of 1,516,875,236 Ordinary Shares in Barclays to be exercised in full and (iv)
approval of the issue, upon conversion of the MCNs, of new Ordinary Shares at a price representing a discount of more than 10 per cent
(collectively, the "Resolutions").
A Placee's obligation to take up the MCNs is subject only to the passing of the relevant Resolutions at the general meeting of the
Shareholders. The Ordinary Shares will, when issued following conversion of an MCN, be credited as fully paid and will rank pari passu in
all respects with the existing Ordinary Shares including the right to receive all dividends and other distributions declared, made or paid
in respect of such Ordinary Shares after the date of conversion of the MCNs.
In this Appendix, unless the context otherwise requires, "Placee" means a person (including individuals, funds or others) by whom, or on
whose behalf, a commitment to subscribe for MCNs has been given to the Bookrunners.
Application for listing and admission to trading
Application will be made to the Financial Services Authority (the "FSA") for admission of the MCNs to the Official List of the FSA (the
"Official List") and to London Stock Exchange plc for admission to trading of the MCNs on the Regulated Market (together, "Admission"). It
is expected that the issue of the MCNs will become effective on or around 28 November 2008 and that unconditional dealings in the MCNs will
commence shortly thereafter.
Bookbuild
The Bookrunners will today commence the bookbuilding process in respect to the Placing (the "Bookbuild") to determine demand for
participation in the Placing by Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in,
the Placing. No commissions will be paid to Placees or by Placees in respect of any MCNs.
The Bookrunners and the Issuer shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their
sole discretion, determine.
Participation in, and principal terms of, the Placing
1. The Bookrunners are arranging the Placing as the bookrunners and agents of the Issuer.
2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the
Bookrunners. The Bookrunners and their respective affiliates are entitled to enter bids in the Bookbuild as principal.
3. The aggregate principal amount of MCNs to be sold through the Placing will be determined by the Bookrunners and will be announced
on a Regulatory Information Service following the completion of the Bookbuild (the "Pricing Announcement").
4. To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at the Bookrunners. Each
bid should state the aggregate principal amount of MCNs for which the prospective Placee wishes to subscribe. Bids may be scaled down by the
Bookrunners on the basis referred to in paragraph 8 below.
5. The Bookbuild is expected to close at 5:00 p.m. (GMT) on 31 October 2008 but may be closed earlier or later at the discretion of
the Bookrunners and without further notice. The Bookrunners may, in agreement with the Issuer, accept bids that are received after the
Bookbuild has closed.
6. Each Placee's allocation will be determined by the Issuer in its sole discretion and will be confirmed to Placees orally by either
of the Bookrunners as agent of the Issuer following the close of the Placing, and a trade confirmation will be dispatched as soon as
possible thereafter. The terms of this Appendix will be deemed incorporated by reference therein. The Bookrunners' oral confirmation to such
Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of the
Bookrunners and the Issuer, under which the Placee agrees to subscribe for the aggregate principal amount of MCNs allocated to it at the
Issue Price on the terms and conditions set out in this Appendix.
7. Each prospective Placee's allocation and commitment will be evidenced by a contract note issued to such Placee by one of the
Bookrunners. The terms of this Appendix will be deemed incorporated by reference therein.
8. The Bookrunners may choose to accept bids, either in whole or in part, on the basis of allocations determined at their discretion
(in agreement with the Issuer) and may scale down any bids for this purpose on such basis as it may determine. The Bookrunners may also,
notwithstanding paragraphs 4 and 5 above, subject to the prior consent of the Issuer (i) allocate MCNs after the time of any initial
allocation to any person, and (ii) allocate MCNs after the Bookbuild has closed to any person submitting a bid after that time.
9. A bid in the Bookbuild will be made on the terms and subject to the conditions in this Announcement (including this Appendix) and
will be legally binding on the Placee on behalf of which it is made and except with the Bookrunners' consent will not be capable of
variation or revocation after the time at which it is submitted. Each Placee will also have an immediate, separate, irrevocable and binding
obligation, owed to the Bookrunners, to pay the Bookrunners (or as the Bookrunners may direct) in cleared funds an amount equal to the
aggregate principal amount of the MCNs such Placee has agreed to subscribe. Each Placee's obligations will be owed to the Issuer and to the
Bookrunners.
10. Except as required by law or regulation, no press release or other announcement will be made by the Bookrunners or the Issuer
using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.
11. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all MCNs to be
acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and
Settlement".
12. All obligations under the Bookbuild and Placing will be unconditional save for the passing of the Resolutions.
13. By participating in the Bookbuild, each Placee will agree that its rights and obligations in respect of the Placing will not be
capable of rescission or termination by the Placee.
14. To the fullest extent permissible by law, none of the Bookrunners nor any of its affiliates shall have any liability to Placees
(or to any other person whether acting on behalf of a Placee or otherwise). In particular, none of the Bookrunners, the Issuer nor any of
its or their affiliates shall have any liability (including to the extent permissible by law, any fiduciary duties) in respect of the
Bookrunners' conduct of the Bookbuild or of such alternative method of effecting the Placing as the Bookrunners and the Issuer may agree.
Prospectus
A prospectus will be submitted to be approved by the FSA in relation to the Issuer's application for Admission in due course but
Placees' commitments will be made solely on the basis of the information contained in this Announcement (including this Appendix), the
Interim Management Statement and the Terms and Conditions released by Barclays and the Issuer today, and subject to the further terms set
forth in the contract note to be provided to individual prospective Placees. Each Placee, by accepting a participation in the Placing,
agrees that the content of this Announcement (including this Appendix), the Interim Management Statement and the Terms and Conditions is
exclusively the responsibility of the Issuer and Barclays and confirms that it has neither received nor relied on any other information,
representation, warranty, or statement made by or on behalf of the Issuer or Barclays or Barclays Capital, CS or JPMC or any other person
and none of Barclays Capital, CS and JPMC nor the Issuer nor Barclays nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation,
warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own
investigation of the business, financial or other position of the Issuer and Barclays in accepting a participation in the Placing and the
risks associated with investing in the Issuer's or Barclays' securities. Nothing in this paragraph shall exclude the liability of any person
for fraudulent misrepresentation.
Registration and Settlement
Settlement of transactions in the MCNs will take place within the facilities of Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream
Banking, soci? anonyme ("Clearstream").
Each Placee allocated MCNs in the Placing will be sent a trade confirmation stating the aggregate principal amount of MCNs allocated to
it, the aggregate amount owed by such Placee and settlement instructions in accordance with standing arrangements between the Placee and the
relevant Bookrunner. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance
with the standing Euroclear or Clearstream settlement instructions that it has in place with the relevant Bookrunner.
It is expected that settlement will occur on or about 27 November 2008.
Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at
the rate of two percentage points above LIBOR as determined by the Bookrunners.
Each Placee is deemed to agree that, if it does not comply with these obligations, the Bookrunners may sell the MCNs allocated to that
Placee on such Placee's behalf and retain from the proceeds, for the Issuer's account and benefit, an amount equal to the aggregate amount
owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed
by it.
If the MCNs are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and
delivered immediately to the relevant person within that organisation.
Representations, Warranties and Undertakings
By participating in the Placing each Placee (and any person acting on such Placee's behalf):
1 represents and warrants that it has read this Announcement, including this Appendix, the Interim Management Statement and the Terms
and Conditions in their entirety;
2 acknowledges that the MCNs are being purchased for investment purposes, and not with a view to distribution within the meaning of
United States securities laws;
3 acknowledges that no offering document or prospectus currently exists in connection with the placing of the MCNs and represents and
warrants that it has not received a prospectus or other offering document in connection therewith;
4 acknowledges that (a) application will be made for the MCNs to be admitted to the Official List and traded on the Regulated Market
of the London Stock Exchange and the Issuer and Barclays are therefore required to publish certain business and financial information in
accordance with the FSA's Listing Rules, the Prospectus Rules and the Disclosure Rules and Transparency Rules and the rules and practices of
the London Stock Exchange (collectively, the "Exchange Information "), which includes a description of the nature of the Issuer's and
Barclays' business and the Issuer's and Barclays' most recent balance sheet and profit and loss account, and similar statements for
preceding financial years, and that it is able to obtain or access the Exchange Information without undue difficulty; (b) it may not rely,
and has not relied, on any investigation that the Bookrunners, any of their affiliates or any person acting on its or their behalf may have
conducted with respect to the MCNs or the Issuer and/or Barclays and/or the Barclays Group, and none of such persons has made any representation to the Placee, express or implied, with respect to the
Issuer and/or Barclays and/or the Barclays Group, the MCNs or the accuracy, completeness or adequacy of Exchange Information or any other
publicly available information; (c) it has conducted its own investigation with respect to the Issuer and Barclays and the MCNs; (d) it has
received all information that it believes is necessary or appropriate in connection with its purchase of the MCNs; (e) it has made its own
assessment and has satisfied itself concerning the relevant tax, legal, currency and other economic consideration relevant to its investment
in the MCNs; and (f) it has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and
risks of any prospective investment in the MCNs. It also acknowledges and agrees that it will not hold the Bookrunners or any of its
affiliates responsible for any misstatements in or omissions from any publicly available information, including the Exchange Information, concerning the Issuer, Barclays and/or the Barclays
Group;
5 acknowledges that none of the Bookrunners nor the Issuer nor Barclays nor any of their affiliates nor any person acting on its
behalf has provided, and will not provide it, with any material regarding the MCNs or the Issuer or Barclays or the Barclays Group other
than this Announcement, the Interim Management Statement and the Terms and Conditions; nor has it requested any of the Bookrunners, the
Issuer or Barclays, any of their affiliates or any person acting on behalf of any of them to provide it with any such information;
6 acknowledges that the content of this Announcement, the Interim Management Statement and the Terms and Conditions is exclusively
the responsibility of the Issuer and Barclays and that none of the Bookrunners, nor any person acting on its behalf has or shall have any
liability for any information, representation or statement contained in this Announcement, the Interim Management Statement and the Terms
and Conditions or any information previously published by or on behalf of the Issuer or Barclays or the Barclays Group and will not be
liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this
Announcement, the Interim Management Statement and the Terms and Conditions or otherwise. Each Placee further represents, warrants and
agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the
MCNs is contained in this Announcement, the Interim Management Statement and the Terms and Conditions and any information previously published by the Issuer or Barclays or the Barclays Group by notification
to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the
MCNs and that it has neither received nor relied on any other information given or representations, warranties or statements made by any of
the Bookrunners or the Issuer or Barclays and none of the Bookrunners nor the Issuer nor Barclays will be liable for any Placee's decision
to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee
further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Issuer and
Barclays and the Barclays Group in deciding to participate in the Placing;
7 acknowledges that none of the Bookrunners nor any person acting on its behalf nor any of its affiliates has or shall have any
liability for any publicly available or filed information or any representation relating to the Issuer, Barclays or the Barclays Group,
provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;
8 acknowledges that it satisfies all standards for investors in investment of the type of acquired herein imposed by its jurisdiction
of residence or otherwise;
9 acknowledges that it is authorised and qualified to purchase the MCNs and the person signing has been duly authorised to do so;
10 acknowledges that it is not, and at the time the MCNs are acquired will not be a resident of Australia, Canada or Japan, and that
the MCNs and the Ordinary Shares for which the MCNs are convertible have not been and will not be registered under the securities
legislation of Australia, Canada or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or
transferred, directly or indirectly, within those jurisdictions;
11 acknowledges and agrees that none of the MCNs nor the Ordinary Shares for which the MCNs are convertible have been nor will be
registered under the Securities Act.
12 understands that the offer and sale of the MCNs and the Ordinary Shares for which the MCNs are convertible is being made in
reliance on an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and acknowledges and
agrees that, for so long as the MCNs are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, none of the
MCNs nor such Ordinary Shares may be offered, sold or pledged or otherwise transferred except in an offshore transaction in accordance with
the applicable requirements of Regulation S under the Securities Act or pursuant to another applicable exemption from registration under the
Securities Act, and in each case in accordance with any applicable securities laws of any state of the United States and the laws of other
jurisdictions. Each Placee understands that no representation has been made as to the availability of any exemption under the Securities Act
for the reoffer, resale, pledge or transfer of the MCNs or the Ordinary Shares for which the MCNs are convertible, which may be further subject to the applicable restrictions on transfer
of the MCNs and the Ordinary Shares set forth in the Terms and Conditions.
13 represents and warrant that it is not in the United States (within the meaning of Regulation S under the Securities Act) and/or it
is subscribing for the MCNs in an "offshore transaction" (within the meaning of Regulation S under the Securities Act).
14 represents, warrants and agrees that it is subscribing for the MCNs for its own account (or for the account of its affiliates or
funds managed by it or its affiliates with respect to which it either have investment discretion or which are outside the United States (as
defined above)), in each case, not with a view to, or for resale in connection with, the distribution thereof or the distribution of the
Ordinary Shares for which the MCNs are convertible, into the United States.
15 agrees not to deposit the MCNs or the Ordinary Shares for which the MCNs are convertible into any unrestricted depositary facility
maintained by any depositary bank (including, without limitation, Barclays' existing American Depositary Shares facility with JPMorgan Chase
Bank, N.A.) unless and until such time as the Ordinary Shares are no longer "restricted securities" within the meaning of Rule 144(a)(3)
under the Securities Act.
16 represents and warrants that neither it, nor any of its affiliates, is a "bank holding company" within the meaning of the Bank
Holding Company Act of 1956 ("BHCA"), or is subject to the International Banking Act of 1978. Neither it, nor any of its affiliates own or
control (within the meaning of the BHCA and the rules and interpretations of the U.S. Federal Reserve thereunder) (a) any bank or other
financial institution located in the United States or having operations in the United States or (b) any non-U.S. financial institution that
owns or controls any Bank or other financial institution located in the United States or having operations in the United States.
17 understands that a holder converting MCNs shall be required to represent and agree in a in an exchange notice that at the time of
execution and deposit of such exchange notice it or the person who has the beneficial interest in that MCN is not in the United States
(within the meaning of Regulation S) and it, or such person, purchased such MCN, or the beneficial interest therein, in a transaction made
in accordance with Rule 903 or Rule 904 of Regulation S. No Ordinary Shares will be issued to a noteholder unless the noteholder satisfies
the foregoing conditions;
18 unless otherwise specifically agreed with the Bookrunners, represents and warrants that it is, or at the time the MCNs are
acquired that it will be, the beneficial owner of such MCNs, or that the beneficial owner of such MCNs is not a resident of Australia,
Canada or Japan;
19 represents and warrants that the issue to it of MCNs will not give rise to a liability under any of sections 67, 70, 93 or 96 of
the Finance Act 1986 (depositary receipts and clearance services);
20 represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing
under the Proceeds of Crime Act 2002, the Terrorism Act 2003 and the Money Laundering Regulations 2003 (the "Regulations") and, if making
payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third
party as required by the Regulations;
21 if a financial intermediary, as that term is used in Article 3(2) of the EU Prospectus Directive (which means Directive 2003/71/EC
and includes any relevant implementing measure in any member state) (the "Prospectus Directive"), represents and warrants that the MCNs
acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their
offer or resale to, persons in a Member State of the European Economic Area which has implemented the Prospectus Directive other than
qualified investors (as defined in Article 2(1)(e) of the Prospectus Directive), or in circumstances in which the prior consent of the
Bookrunners has been given to the offer or resale;
22 represents and warrants that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will
not offer or sell any MCNs to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not
resulted and which will not result in a breach of section 19 of the Financial Services and Markets Act 2000 ("FSMA");
23 represents and warrants that it has not offered or sold and will not offer or sell any MCNs to persons in the European Economic
Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments
(as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not
result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive;
24 represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to the
MCNs in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person;
25 represents and warrants that it has complied and will comply with all applicable provisions of the FSMA with respect to anything
done by it in relation to the MCNs in, from or otherwise involving, the United Kingdom;
26 represents and warrants that it is a "qualified investor" (as defined in Article 2(1)(e) of the Prospectus Directive);
27 represents and warrants that it and any person acting on its behalf is entitled to acquire the MCNs under the laws of all relevant
jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to this
participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on
whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) and
will honour such obligations;
28 undertakes that it (and any person acting on its behalf) will make payment for the MCNs allocated to it in accordance with this
Announcement on the due time and date set out herein, failing which the relevant MCNs may be placed with other subscribers or sold (for and
on behalf of the Issuer) as the Bookrunners may in their sole discretion determine and without liability to such Placee;
29 acknowledges that none of the Bookrunners, nor any of its affiliates, nor any person acting on behalf of any of them, is making
any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placees and
that participation in the Placing is on the basis that it is not and will not be a client of the Bookrunners and that none of the
Bookrunners has any duties or responsibilities to it for providing the protections afforded to its clients or customers or for providing
advice in relation to the Placing;
30 undertakes that the person who acquires the MCNs will be (i) itself or (ii) its nominee, as the case may be. None of the
Bookrunners nor the Issuer nor Barclays will be responsible for any liability to stamp duty, stamp duty reserve tax or any other stamp,
issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating
thereto) payable in the UK or elsewhere resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of
such Placee agrees to participate in the Placing and it agrees to indemnify the Issuer, Barclays and the Bookrunners in respect of the
same;
31 acknowledges that any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations
arising out of or in relation to these terms and conditions shall be governed by and construed in accordance with the laws of England and
Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the
English courts as regards any claim, dispute or matter arising out of any such contract or any such non-contractual obligation, except that
enforcement proceedings in respect of the obligation to make payment for the MCNs (together with any interest chargeable thereon) may be
taken by the Issuer, Barclays or the Bookrunners in any jurisdiction in which the relevant Placee is incorporated or in which any of its
securities have a quotation on a recognised stock exchange;
32 agrees that the Issuer, Barclays, the Bookrunners and their respective affiliates and others will rely upon the truth and accuracy
of the foregoing representations, warranties, acknowledgements and undertakings which are given to the Bookrunners on its own behalf and on
behalf of the Issuer and/or Barclays and are irrevocable;
33 agrees to indemnify and hold the Issuer, Barclays, the Bookrunners and their respective affiliates harmless from any and all
costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach by the Placee of
the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of
this Appendix shall survive after completion of the Placing;
34 understands that if it subscribes for MCNs in the Placing, it will be deemed to have made for the benefit of the Bookrunners all
such representations, warranties, acknowledgements, agreements and undertakings contained herein;
35 acknowledges that its commitment to subscribe MCNs on the terms set out herein and in the contract note will continue
notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or
require that their consent be obtained with respect to the Issuer's and/or Barclays' conduct of the Placing; and
36 understands that the foregoing representations, warranties, agreements, acknowledgements and undertakings are required in
connection with United States and other securities laws and that the Bookrunners and their affiliates and others will rely upon the truth
and accuracy of the representations, warranties, agreements, acknowledgements and undertakings. It irrevocably authorises the Bookrunners to
produce this letter to any interested party in any administrative or legal proceeding or official enquiry with respect to the matter set
forth therein.
The Issuer has agreed to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as
agent) free of stamp duty, stamp duty reserve tax and any other stamp, issue, securities, transfer, registration, documentary or other
duties or taxes (including any interest, fines or penalties relating thereto) payable in the UK or elsewhere, subject to the settlement
relating only to a subscription by it and/or such person direct from the Issuer and/or from Barclays for the MCNs in question (and, if there
is any such duty or tax payable in the UK or elsewhere, it will be paid by the Issuer but not, for the avoidance of doubt, the
Bookrunners).
Each Placee, and any person acting on behalf of the Placee, acknowledges that the Bookrunners do not owe any fiduciary or other duties
to any Placee in respect of any representations, warranties, undertakings or indemnities in the Subscription Agreement.
Each Placee and any person acting on behalf of the Placee acknowledges and agrees that the Bookrunners or any of their respective
affiliates may, at its absolute discretion, agree to become a Placee in respect of some or all of the MCNs.
When a Placee or person acting on behalf of the Placee is dealing with the Bookrunners, any money held in an account with the
Bookrunners on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning
of the rules and regulations of the FSA made under the FSMA. The Placee acknowledges that the money will not be subject to the protections
conferred by the client money rules; as a consequence, this money will not be segregated from the Bookrunners' money in accordance with the
client money rules and will be used by the Bookrunners in the course of their own business and the Placee will rank only as a general
creditor of the Bookrunners.
All times and dates in this Announcement may be subject to amendment. The Bookrunners shall notify the Placees and any person acting on
behalf of the Placees of any changes.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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