Barclays to raise 4 billion pounds within 2 weeks

LONDON (Reuters) - Barclays (BARC.L) is close to raising 4 billion pounds from sovereign wealth funds to boost its capital in a deal that will be completed in the next two weeks, the Sunday Times said.

There has been persistent speculation that Barclays is seeking to raise at least 3 billion pounds from outside investors to shore up its capital position.

The bank declined to comment.

Analysts and bankers expect it to try to structure a deal that will not dilute existing shareholders and will raise funds from several investors, including China Development Bank and Singapore's Temasek, who already bought stakes last year.

The Sunday Times said Barclays will place new shares with investors at a premium to Friday's closing price of 318 pence each. It will give existing investors the chance to buy the same percentage of shares in the placing, but it will be underwritten by the sovereign funds, the paper said.

At least six potential investors are in talks with the bank and it's likely three will be selected, the report said.

Barclays has said it is keeping all its options open in regard to raising funds. But it is not expected to launch a huge emergency rights issue like its rivals Royal Bank of Scotland (RBS.L) and HBOS HBOS.L.

It wants to raise its core tier 1 capital ratio above 5.25 percent, from around 5.1 percent now, one of the lowest among European banks. Each 1 billion pounds raised would lift the ratio by about 0.25 percent.

Speaking on the sidelines of an economic forum in Malaysia, Barclays Chairman Marcus Agius said on Sunday the global credit crunch is not near an end and has "a little further to go".

(Reporting by Steve Slater, editing by Elizabeth Fullerton)