Barclays (NYSE: BCS) plans to repay $1.75 billion of senior notes at par

What happened

Barclays PLC (NYSE: BCS) will redeem its $1.75 billion of 2.279% Fixed Rate Resetting Senior Callable Notes due 2027 on Nov. 24.

Holders will receive 100% of principal plus accrued but unpaid interest, counted from May 24 up to, but not including, the redemption date. Barclays dated its notice Nov. 2.

The notes were issued under a senior debt indenture dated Jan. 17, 2018, with The Bank of New York Mellon, London Branch as trustee. Holders can surrender the notes and collect payment at The Bank of New York Mellon in London.

On or before the redemption date, Barclays will irrevocably deposit enough money with the trustee or a paying agent to cover the full price. Once it does, holders keep only their right to the redemption price, without interest.

Interest stops accruing once the price falls due. The New York Stock Exchange listing of the notes will be cancelled on or shortly after that day.

Key numbers

Metric Latest Change Source
Principal amount of the notes $1.75 billion SEC 6-K, Exhibit 99.1
Fixed rate on the notes 2.279% SEC 6-K, Exhibit 99.1
Redemption price 100% of principal plus accrued but unpaid interest SEC 6-K, Exhibit 99.1
Redemption date Nov. 24, 2026 SEC 6-K, Exhibit 99.1

Read more: Barclays (BCS) company research

Why it matters

The payout is fixed at par, so holders do not depend on a market price for their exit. For Barclays, one senior note issue disappears from its outstanding debt and from the exchange.

OptimistFi has argued that Barclays can compound value if its regulated balance sheet keeps attracting funding and management turns cyclical bank earnings into per-share value. Repaying a note issue at par fits that kind of balance-sheet discipline without proving it, so the redemption leaves the case unchanged.

The caveat is scale and routine. This is the repayment of a single note issue at face value, which says little by itself about earnings power or capital strength.

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What's next

The next test is Nov. 24, when the redemption price becomes due and payable. Payment on schedule would complete the retirement of the issue.

Holders with questions can contact Barclays Debt Investor Relations in London.

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Sources

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Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.