On Tuesday, Barclays announced its plan to raise GBP5.8 billion from its shareholders. The move was to satisfy the financial regulators in Britain as they demanded the bank to boost its capital reserves.
The 320-year-old bank's rights issue is being underwritten by Credit Suisse, Citi, Bank of America Merrill Lynch and Deutsche Bank. The said underwriters will get as much as 1.7% of the gross proceeds which is valued at GBP5.95 billion as stated in the underwriting agreement.
According to a data issued by Thomson Reuters and Freeman Consulting, the offered fees for the top banks fall below the average 2.79% on global rights issues. Additional underwriters to the deal would also get their fees from the total GBP101.1 million payments. This means that the commission paid to the top four banks would be lessened. Further, risks that will be taken are also reduced from each of the four lenders.
Barclays would also receive around GBP5.95 million from the sale. This would serve as payment for its global coordinator role of the deal. Underwriters may also be in line for added fees if new shares were not admitted to the stock market by October 3 of this year.
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