Barclays raises £5.8 million to boost reserves; Boardwalk receives $490 million; Response closes deal

By Kenneth Lim

Oct. 31 - Barclays plc plans to boost its capital ratios with a £5.8 billion placement of reserve capital instruments and convertibles.

Boardwalk Pipeline Partners, LP said its parent company will take just $490 million worth of units to fund its expansion projects, less than the $1 billion that was initially guided for.

Response Biomedical Corp. completed the second part of a downsized unit placement, raising C$5.1 million altogether.

Barclays in £5.8 billion deal

Barclays is placing £5.8 billion of reserve capital instruments and convertibles notes with a number of investors to boost its capital ratios.

The company will sell £3 billion of reserve capital instruments to Qatar Holding and entities representing the beneficial interests of HH Sheikh Mansour Bin Zayed Al Nahyan, a member of Abu Dhabi's royal family.

It also will sell £2.8 billion of 9.75% eight-month mandatorily convertible notes to Qatar Holding, Challenger Universal Ltd. and Al Nahyan.

The reserve capital instruments carry a 14% coupon until June 2019 and 3-month Libor plus 13.4% thereafter.

In conjunction with this issue, Qatar Holding and Al Nahyan also will receive warrants for up to about 1.52 billion ordinary shares, exercisable at 197.775p for five years.

The mandatorily convertible notes have an initial conversion price of 153.276p, a 22.5% discount to Barclays' average stock levels at the time of pricing. Barclays common stock (LSE: BARC) closed at 178.9p on Friday, lower by 12.84% or 26.35p.

Qatar Holding has agreed to invest £500 million in mandatorily convertible notes and £1.5 billion in reserve capital instruments and will receive warrants for up to £1.5 billion in shares.

Challenger has agreed to invest £300 million in mandatorily convertible notes.

Al Nahyan has agreed to invest £2 billion in mandatorily convertible notes and £1.5 billion in reserve capital instruments and will receive warrants for up to £1.5 billion in shares.

London-based Barclays is a financial services provider engaged in retail and commercial banking, credit cards, investment banking, wealth management and investment management services.

Barclays is also carrying out a concurrent £1.5 billion offering of the mandatorily convertible notes to existing institutional shareholders and other institutional investors through an accelerated non-underwritten bookbuilding.

"The capital raising announced today enables Barclays to meet the capital issuance plan agreed with the U.K. authorities following the decision by the FSA [Financial Services Authority] to increase the capital ratio requirements for all U.K. banks," Barclays chief executive John Varley said in a statement.

"We are pleased to have the continuing support of Qatar Holding and Challenger, and to welcome HH Sheikh Mansour Bin Zayed Al Nahyan as a substantial new investor, as well as enabling broad participation by existing institutional shareholders. Today's capital raising provides certainty and speed of execution, and combined with the strong third-quarter performance in a volatile operating environment enables us to continue to implement our strategy and build our business by serving clients and customers around the world."

Barclays chairman Marcus Agius added: "Given the continuing uncertainties in world capital markets, the board of Barclays resolved to satisfy the capital raising requirements agreed with the U.K. authorities without delay. This we have done. The board believes that this maintains Barclays as a strong, independent and well capitalized bank."

Boardwalk slims Loews deal

Boardwalk Pipeline said it will sell $490 million of common units to its parent company, Loews Corp., through a private placement.

Loews had initially agreed to inject up to $1 billion if Boardwalk could not find external funding on acceptable terms.

The placement involves about 21.18 million common units at $23.13 apiece to a subsidiary of Loews. Loews will also contribute an additional $10 million on behalf of Boardwalk Pipeline's general partner, a Loews subsidiary, to maintain its 2% general partner interest.

Boardwalk common stock (NYSE: BWP) rose 3.76% or $0.87 to close at $24 Friday.

Proceeds will be used for expansion projects.

Boardwalk is an Owensboro, Ky., interstate transportation and natural gas storage company.

Response closes deal

Response Biomedical took in the final C$437,835 of a downsized C$5.1 million private placement of stock and warrant units.

The deal originally priced for C$5.5 million. The company completed the initial tranche of C$4.66 million on Oct. 28.

The units of one common share and one half-share warrant were sold at C$0.15 per unit. Each whole warrant is exercisable for three years at C$0.20.

Proceeds will be used to launch a flu test that has been partnered with 3M Medical as well as a cardiovascular test line partnered with Roche Diagnostics. The proceeds will also fund general operations.

Based in Vancouver, B.C., Response develops diagnostic tests for clinical and environmental applications.

"This financing allows us to support the exciting 3M launch of the RAMP Influenza A/B Assay this month in the United States and to prepare for the launch of our cardiovascular testing by Roche Diagnostics anticipated in Q1/2009," Response Biomedical chief executive S. Wayne Kay said in a statement. "We also have the right infrastructure and resources in place to take advantage of new partner-funded opportunities and we look forward to the prospects that lie ahead."

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