£4.5bn fund raising

http://www.offer.barclays.com/index_main.php?task=view&section=press&language=en&cnt=bb&med=asx&type=video

Barclays share issue web site that has press release, presentation and webcast.

http://uk.reuters.com/article/businessNews/idUKL2563723720080625?feedType=nl&feedName=ukdailyinvestor
Citywire

"About half the capital will be directed at higher (capital) ratios and about half will be directed at new business opportunities," said Barclays Chief Executive John Varley.

The fundraising would have increased its core tier 1 capital ratio to 6.3 percent at the end of last year, from the 5.1 percent it reported.
That ratio will stay above its target of 5.25 percent for "the foreseeable future" but will come down from 6.3 percent as cash is used for growth, possibly on acquisitions, Varley told reporters on a conference call.

intends to keep paying dividends in cash and the annual payout would be in line with last year's 34p per share until the dividend is more than twice covered by earnings.

SMFG will get a 2 percent stake and a co-operation agreement will give it access to Barclays Capital's investment bank platform and its India and Pakistan footprint, while Barclays will be able to access a wider Japanese and Asian network for areas such as private banking.

Varley said he wouldn't rule out acquisitions, but is mainly focused on taking advantage of higher margins and problems the credit crunch has created among rivals.
Bob Diamond, head of investment bank Barclays Capital, said there was "a terrific opportunity" to grab market share on Wall Street as "six or seven" big U.S. banks have stepped back during the market turmoil.
Barclays has opened over 600 branches outside Britain this year and bought a bank in Russia and a UK credit card business, and Varley said it is taking "a substantially higher" share of UK mortgage lending.

Diamond said the bank had better-quality assets, was managing risk better than rivals, and had avoided getting involved in many of the leveraged finance deals that had caused others to take big writedowns

http://www.marketwatch.com/news/story/barclays-executives-strike-defiant-tone/story.aspx?guid=%7B2A99E6E5-A29A-4898-8064-9C5E6EA3B8FE%7D&dist=msr_1
Wall Street Journal

Varley said the U.K. lender wasn't a "slave to volumes." He pointed to the British residential mortgage business, noting Barclays has been able to gain market share at much better margins even though the market has contracted sharply as both house prices and mortgage approvals tumble.
The acquisition of Goldfish, a credit-card company that has changed hands several times, is another example of Barclays' willingness to strike deals in a tougher environment, he said

Diamond ... also defended charges it hasn't been as aggressive as rivals it marking down assets.
"Our marks shouldn't be an issue," he said, using the group's leveraged finance business as an example.
"I said last July that we weren't uncomfortable with our risk, I talked about Alltel in the U.S. and (Alliance) Boots in the U.K.," he said.
"We were offered to be the lead manager on Clear Channel, we were offered to be the lead manager on EMI, and we said no thank you to those deals. I could go through two or three other deals (that Barclays turned down,)" Diamond said.
Diamond also dismissed worries about the impact from recent credit rating downgrades of bond insurers on securities that Barclays holds, saying the lender uses its own models when it feels external ratings agencies are too optimistic.

http://www.theherald.co.uk/business/news/display.var.2364456.0.Barclays_boosted_by_4_5bn_injection.php The Herald

Panmure Gordon analyst Sandy Chen is particularly worried about its exposure to monoline insurers, which stood at £2.8bn at the end of the first quarter of 2008. Monolines guarantee debt repayments and Chen reckons these could suffer from rising loan defaults.
He said: "Amidst the hurly- burly of other banks' write-downs and capital raisings, the pace and organisation of (Barclays') £4.5bn share issue are impressive. Stepping back, though, it seems to us that little has changed in the deteriorating fundamental outlook (particularly with monoline write-downs)."

http://www.thesun.co.uk/sol/homepage/news/money/city/article244711.ece
Sun
[Varley] said: “We want to make sure we have the full tool kit available to us.”
This is likely to include opening more branches overseas — where Barclays has opened 600 so far this year and is aiming for a further 300.
But Bob Diamond, head of the bank’s investment banking arm Barclays Capital, said expansion could include taking out rivals on Wall Street — where there are some “terrific opportunities”.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/26/cnbarc126.xml
Telegraph

Shareholders also applauded Barclays' pledge to preserve the dividend at last year's level and pay it in cash - in contrast to HBOS, RBS and Bradford & Bingley

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/26/ccbarc126.xml
Telegraph

"There is no difference in how the sponsoring banks, Credit Suisse and JP Morgan Cazenove, would conduct due-diligence and how underwriters might. Why would they take any risk at all with their reputation? Believe me, they shook the tree," Mr Varley insisted, adding: "What motivation do we have in raising capital today and not disclosing?" [John Varley]

While Barclays' clever fundraising was widely lauded for avoiding the dreaded rights issue process, the bank's accompanying disclosure fell short of rivals HBOS and Royal Bank of Scotland.

The suspicion remains that official underwriters would have demanded fuller disclosure than Qatari and Japanese investors with strategic intentions

http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/06/26/cxquest126.xml

Telegraph - Questor

Forget price/earnings ratios, tangible book value, return on equity, or any other valuation measure - any company whose board stresses that the dividend is safe "in the absence of unforeseen circumstances" when yielding 10pc has to be cheap. So long as you trust the management.
At Barclays, it all seems to come down to management. Chief executive John Varley and his colleagues have staked their careers on the bank's performance.

given the level of due diligence likely to have been undertaken by the Qataris and others before they signed up, it is a reasonable assumption that there isn't anything likely to prove fatal out there.

http://www.ft.com/cms/s/0/74844fcc-4319-11dd-81d0-0000779fd2ac.html?nclick_check=1

FT

Unlike some of its rivals, Barclays has taken the decision to hold loans on its books in such a way that they do not have to be revalued to prevailing market prices. Bob Diamond, Barclays' president, yesterday pointed out that the bank had been proved right in not marking down the value of its debt in the buyout of Alltel, the US telecom group. Alltel was recently sold to Verizon, the rival US telecom group, and Barclays expects the debt to be repaid in full.

Standard & Poor's yesterday acknowledged that Barclays' approach - while legitimate - gave cause for concern. "Significant uncertainties remain about the ultimate value of structured credit and leveraged finance positions," the agency wrote as it confirmed a negative outlook on Barclays' credit rating. "Indeed, in our opinion, Barclays' markdowns would likely have been materially greater had it applied fair-value accounting to certain of these exposures in line with many peers."
Barclays' upbeat outlook may yet be proved right - and investors yesterday gave them the benefit of the doubt. But if sceptics' concerns on Barclays' balance sheet come true, the consequences for Mr Varley and Mr Diamond would be dire.