Business Maverick: Barclays Expects £450 Million Loss on Bond Error, Delays Buyback

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Barclays Plc expects to take a 450 million-pound ($591 million) hit and will delay a share buyback after mistakenly issuing about $15 billion more structured notes and exchange traded notes than it had registered for sale.

The firm issued about $36 billion of investment products after registering with U.S. regulators in August 2019 to sell up to $20.8 billion, according to a statement Monday. The error will require the firm to repurchase affected securities — a so-called rescission offer — at their original price.

Major banks typically file for blanket registrations that allow them to regularly issue notes that give clients a chance to bet on everything from market volatility to the performance of Tesla Inc. shares. Market observers couldn’t recall a bank’s issuance exceeding the amount it registered, let alone blowing billions past its limit.

A shelf registration is an agreement with regulators to allow finance firms to issue securities without applying for approval each time. It allows for a series of issuances without requiring further prospectuses to be filed.

 

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