Barclays begins 30-day rescission offer for $17.6 billion securities

By Marisa Wong

Los Angeles, Aug. 1 – Barclays Bank plc has begun its rescission offer to eligible purchasers of about $17.6 billion of securities issued in excess of amounts registered under its U.S. shelf registration statements, according to Monday press releases.

Those securities include about $14.8 billion of structured notes and $2.8 billion of exchange-traded notes.

The 30-business-day offer will expire at 5 p.m. ET on Sept. 12.

Investors who wish to revoke their previous acceptance of the rescission offer may do so before the expiration time.

Barclays said it will try to publish results of the offer as soon as practicable after the expiration date.

The offer is open to eligible current investors and eligible former investors.

The rescission offer prospectus supplement can be accessed on the Securities and Exchange Commission’s website at https://www.sec.gov/Archives/edgar/data/312070/000119312522207620/d386666d424b5.htm.

The terms of the rescission offer, including a description of the relevant affected securities, the eligibility requirements for investors to accept the rescission offer and the rescission offer proceeds that are expected to be paid to eligible investors, are set forth in that prospectus supplement, Barclays noted.

Subject securities

As specified in Appendix A to the prospectus supplement, the structured notes covered by the rescission offer are from 3,015 series issued between July 2, 2019 and March 10, 2022.

The ETNs covered by the rescission offer are from 11 series issued between July 23, 2019 and March 3, 2022.

Barclays intends to resume selling and issuing six of those ETN series once the rescission offer has settled, as previously announced.

Eligible investors

As previously announced, eligible current investors are investors who had purchased their subject security from Barclays through an underwriter or other distributor during the relevant period.

To be eligible, the investor must still hold the security and continue to hold the security through the end of the rescission period, free and clear of any liens, charges, claims, etc.

If the security is redeemable or maturing before the end of the offer, the noteholder is not an eligible current investor.

The offer makes a point to define “initial investors in structured notes” as those who purchased a subject security that is a structured note on its initial trade date.

Eligible former investors are investors who had also purchased their subject security from Barclays through an underwriter or other distributor during the relevant period.

Then, the rescission offer specifically applies to securities where a loss has been incurred or will be incurred.

So, if the security has already been redeemed or matured at a loss or sold at a loss and the investor held the security to the redemption, maturity date or sale, then they qualify for the offer.

Alternatively, if the security has terms that will make it redeemable before the end of the offer or the note matures before the end of the offer, and the payout would result in a loss, the securityholder is eligible.

There are exceptions to eligibility. They are as follows:

• Investors who borrowed securities to cover short positions;

• Investors who purchased securities from affiliates during the relevant period pursuant to a repurchase agreement by which Barclays assumed an obligation to repurchase such subject securities at a later date;

• Dealers, underwriters or other distributors who purchased the securities with a view to resell the securities to the public, either in the open market or in privately negotiated transactions, including in market-making transactions; and

• Holders of call options, put options or other types of options to purchase, sell or otherwise indirectly acquire or dispose of the subject securities or an indirect interest therein.

In terms of evidence, if Barclays’ records indicate that an investor had purchased the securities on the initial trade date, there should be sufficient evidence that the investor is eligible.

For investors that are not initial investors, account statements reflecting the purchase and the continued holding of the security will serve as evidence or a receipt, transaction or trade confirmation will work.

For former investors, the following proofs will serve as evidence:

• An account statement reflecting the purchase and purchase price information and then the subsequent sale, redemption or maturity of the security before the date of the prospectus supplement and the continued holding the security until the time of sale, redemption or maturity;

• A receipt, transaction or trade confirmation statement reflecting Barclays, or an underwriter or other distributor who purchased the security in a distribution from Barclays, as a principal seller of the security and the security was acquired during the relevant period;

• Confirmation of the security being sold, redeemed or matured, on the investor’s broker’s or account manager’s official letterhead, detailing the sale, redemption or maturity price;

• Tax documents, such as IRS form 1099-B, showing the losses incurred on the subsequent sale, redemption or maturity of the security before the date of the prospectus supplement; and/or

• Daily trade logs reflection the history of the purchase and sale of the relevant security.

Tendering eligible current investors will receive the amount they paid plus interest from the first day of the month following the date of purchase to the last day of the month preceding the date that payment is made, minus any interest, coupon payments, principal or other income already received on the security.

Eligible former investors will receive an amount in excess, if any, of the amount they paid for the security over the proceeds from the subsequent sale, redemption or maturity of the security plus interest on both the amount they paid and on the loss realized from the sale, redemption or maturity of the security. The amount will, similar to the tender amount above, subtract any interest, coupon payments, principal or other income received on the security.

The indicative rescission offer proceeds that are expected to be paid to initial investors in structured notes are included in Appendix A to the prospectus supplement.

Barclays is a London-based multinational investment bank and financial services company.

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