Fitch Assigns Barclays' Contingent Capital Notes 'BBB-(EXP)' Expected Rating

Wed Mar 27, 2013 10:23am EDT

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(The following statement was released by the rating agency) MILAN/LONDON, March 27 (Fitch) Fitch Ratings has assigned Barclays Bank PLC's ('A'/'F1'/'a'/Stable) potential issue of contingent capital notes (CCNs) due 2023 (with a potential call feature in year 5) an expected rating of 'BBB-(EXP).' KEY RATING DRIVERS AND SENSITIVITIES The CCNs are Tier 2 instruments without a coupon deferral feature and subject to a 7% capital adequacy trigger. On breach of the trigger, the CCNs will be automatically written down to zero and the notes cancelled, resulting in loss of principal and future interest for investors. The capital adequacy trigger is based on Barclays PLC's consolidated core Tier 1 ratio until the implementation of CRD IV, and on its consolidated transitional common equity Tier 1 (CET1) ratio after the implementation date. The notes are rated four notches below Barclays Bank's 'a' Viability Rating (VR), in accordance with Fitch's criteria for "Assessing and Rating Bank Subordinated and Hybrid Securities" (dated 5 December 2012). The CCNs are notched twice for loss severity to reflect the principal write-down feature, and twice for non-performance risk, to reflect the high incremental risk due to the 7% CET1 ratio trigger compared with the risk reflected in the bank's VR. As the notes are notched from Barclays Bank's VR, their rating is primarily sensitive to any change in this rating. Contact: Primary Analyst Christian Scarafia Senior Director +39 02 87 90 87 212 Fitch Italia S.p.A. V.lo S. Maria alla Porta 1 20123 Milan Secondary Analyst James Longsdon Managing Director +44 20 3530 1076 Committee Chairperson Gordon Scott Managing Director +44 20 3530 1075 Media Relations: Hannah Huntly, London, Tel: +44 20 3530 1153, Email: hannah.huntly@fitchratings.com. Additional information is available on www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings. Applicable criteria, "Assessing and Rating Bank Subordinated and Hybrid Securities", dated 5 December 2012, and "Global Financial Institutions Rating Criteria," dated 15 August 2012, are available at www.fitchratings.com. Applicable Criteria and Related Research Assessing and Rating Bank Subordinated and Hybrid Securities here Global Financial Institutions Rating Criteria here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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