Barclays 2012 Annual Report Download - page 289

The strategic report Governance Risk review Financial review Financial statements Risk management Shareholder information
31 Subordinated liabilities continued
Undated loan capital
Undated loan capital is issued by the Bank and its subsidiaries for the development and expansion of their business and to strengthen their capital
bases. The principal terms of the undated loan capital are described below:
Subordination
All undated loan capital ranks behind the claims against the bank of depositors and other unsecured unsubordinated creditors and holders of
dated loan capital in the following order: Junior Undated Floating Rate Notes; other issues of Undated Notes, Bonds and Loans-ranking pari passu
with each other; followed by TONs and RCIs-ranking pari passu with each other.
Interest
All undated loan capital bears a fixed rate of interest until the initial call date, with the exception of the 9% Bonds which are fixed for the life of the
issue, and the Junior and Series 3 Undated Notes which are floating rate.
After the initial call date, in the event that they are not redeemed, the 6.875%, 6.375%, 7.125%, 6.125% Undated Notes, the 9.25% Bonds and the
6.140% Perpetual Notes will bear interest at rates fixed periodically in advance for five year periods based on market rates. All other undated loan
capital except the two floating rate Undated Notes will bear interest, and the two floating rate Undated Notes currently bear interest, at rates fixed
periodically in advance based on London interbank rates.
Payment of interest
Barclays Bank PLC is not obliged to make a payment of interest on its Undated Notes, Bonds and Loans excluding the 7.7% Undated Notes, 8.25%
Undated Notes, 9.25% Bonds and 6.140% Perpetual Notes if, in the preceding six months, a dividend has not been declared or paid on any class of
shares of Barclays PLC or, in certain cases, any class of preference shares of the Bank. The Bank is not obliged to make a payment of interest on its
9.25% Perpetual Subordinated Bonds if, in the immediately preceding 12 months’ interest period, a dividend has not been paid on any class of its
share capital. Interest not so paid becomes payable in each case if such a dividend is subsequently paid or in certain other circumstances. During
the year, the Bank declared and paid dividends on its ordinary shares and on all classes of preference shares.
No payment of principal or any interest may be made unless the Bank satisfies a specified solvency test.
The Bank may elect to defer any payment of interest on the 7.7% Undated Notes and 8.25% Undated Notes. Until such time as any deferred
interest has been paid in full, neither the Bank nor Barclays PLC may declare or pay a dividend, subject to certain exceptions, on any of its ordinary
shares, preference shares, or other share capital or satisfy any payments of interest or coupons on certain other junior obligations.
The Issuer and the Bank may elect to defer any payment of interest on the 6.140% Perpetual Notes. However, any deferred interest will
automatically become immediately due and payable on the earlier of: (i) the date on which any dividend or other distribution or interest or other
payment is made in respect of any pari passu or any junior obligations or on which any pari passu or any junior obligations are purchased, (ii) the
date of redemption or purchase of the 6.140% Perpetual Notes, or (iii) certain other events including bankruptcy, liquidation or winding up of the
Issuer or the Bank.
The Bank may elect to defer any payment of interest on the RCIs. Any such deferred payment of interest must be paid on the earlier of: (i) the date
of redemption of the RCIs, (ii) the coupon payment date falling on or nearest to the tenth anniversary of the date of deferral of such payment, and
(iii) in respect of the 14% RCIs only, substitution. Whilst such deferral is continuing, neither the Bank nor Barclays PLC may declare or pay a
dividend, subject to certain exceptions, on any of its ordinary shares or preference shares.
The Bank may elect to defer any payment of interest on the TONs if it determines that it is, or such payment would result in it being, in non-
compliance with capital adequacy requirements and policies of the FSA. Any such deferred payment of interest will only be payable on a
redemption of the TONs. Until such time as the Bank next makes a payment of interest on the TONs, neither the Bank nor Barclays PLC may (i)
declare or pay a dividend, subject to certain exceptions, on any of their respective ordinary shares or Preference Shares, or make payments of
interest in respect of the Bank’s Reserve Capital Instruments and (ii) certain restrictions on the redemption, purchase or reduction of their
respective share capital and certain other securities also apply.
Repayment
All undated loan capital is repayable, at the option of the Bank generally in whole at the initial call date and on any subsequent coupon or interest
payment date or in the case of the 6.875%, 6.375%, 7.125%, 6.125% Undated Notes, the 9.25% Bonds and the 6.140% Perpetual Notes on any
fifth anniversary after the initial call date. In addition, each issue of undated loan capital is repayable, at the option of the Bank, in whole for certain
tax reasons, either at any time, or on an interest payment date. There are no events of default except non-payment of principal or mandatory
interest. Any repayments require prior notification to the FSA.
Other
All issues of undated loan capital have been made in the Euro currency market and/or under Rule 144A, and no issues have been registered under
the US Securities Act of 1933.
All issues of undated subordinated liabilities are non-convertible.
barclays.com/annualreport Barclays PLC Annual Report 2012 I 287