Nov 8 - Fitch Ratings has assigned Barclays Bank PLC's potential issue of
contingent capital notes an expected rating of 'BBB-(EXP)'.
RATING DRIVERS AND SENSITIVITIES
The notes are Tier 2 instruments without a coupon deferral feature that include
a 7% capital adequacy trigger. On breach of the trigger, the notes will be
automatically transferred to Barclays PLC, the bank holding company,
for nil consideration, resulting in a loss of principal and future interest for
the 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
The notes are rated four notches below Barclays Bank's 'a' Viability Rating
(VR), in accordance with Fitch's criteria for "Rating Bank Regulatory Capital
and Similar Securities" (published 15 December 2011). Under these criteria,
Basel III compliant Tier 2 notes with going-concern write-down or conversion
triggers are notched twice from the VR for loss severity and once or twice for
non-performance risk. The notes are notched 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 the VR of Barclays Bank.
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Additional information is available at 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, 'Rating Bank Regulatory Capital and Similar Securities',
dated 15 December 2011, and 'Global Financial Institutions Rating Criteria'
dated 15 August 2012, are available at www.fitchratings.com.
Applicable Criteria and Related Research:
Rating Bank Regulatory Capital and Similar Securities
Global Financial Institutions Rating Criteria
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