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Amend: Fitch Places Barclays's GCMTN Series Programme LT Rating on Watch Positive
November 6, 2017 / 10:11 AM / 12 days ago

Amend: Fitch Places Barclays's GCMTN Series Programme LT Rating on Watch Positive

(The following statement was released by the rating agency) LONDON, November 06 (Fitch) This is a reissue of the commentary published on 30 October 2017 to update select bonds in the Dodd-Frank Rating Information Disclosure Form (RIDF). Content in the Rating Action Commentary remains unchanged and unaffected. Fitch Ratings has placed the 'A' long-term ratings of Barclays Bank plc's (Barclays, A/Rating Watch Positive/F1) global collateralised medium term note (GCMTN) programme and the notes issued under it on Rating Watch Positive. Their short-term ratings have been affirmed at 'F1', consistent with the ratings of Barclays Bank plc. KEY RATING DRIVERS The programme ratings on the GCMTN series are driven by and directly linked to the Barclays' Long- and Short-Term Issuer Default Ratings (for more information on Barclays' key rating drivers and sensitivities see 'Fitch Affirms Barclays plc's IDR at 'A'; Rates Ring Fenced Bank 'A+(EXP)', dated 28 September 2017 at www.fitchratings.com). As per Fitch's rating definitions for corporate finance, short-term debt ratings reflect the short-term vulnerability to default of the rated entity or security stream and relates to the capacity to meet financial obligations in accordance with the documentation governing the relevant obligation and do not factor in loss severity assumptions. Conversely, long-term debt ratings of individual securities or financial obligations of a corporate issuer address relative vulnerability to default on an ordinal scale. In addition, for financial obligations in corporate finance, we also include a measure of recovery given default on that liability in the rating assessment. When affirming the programme's long-term rating, Fitch assumed no rating uplift based on a recovery from the repo collateral. This reflects that collateral schedules are negotiated with potential noteholders and thus there is variability and an unknown quality of the repo collateral. Until collateral schedules are negotiated, this may also be subject to an unknown diversification framework and unknown margin requirements relative to Fitch's market value and closed-end fund rating criteria. Fitch may assign ratings to individual term notes issued under the GCMTN series, which could lead to higher long-term ratings if warranted by the recovery analysis in instances where the collateral schedules are sufficiently precise and conservative. To date, all notes issued by the programme have been backed by collateral of insufficient quality to warrant any rating uplift over Barclays' long-term debt rating. The GCMTN Series Barclays will periodically issue different classes of notes under the GCMTN series up to a total issuance of USD20 billion. Proceeds will be used to make advances to Barclays CCP Funding LLP (the LLP), which will in turn use the proceeds to enter into tri-party repurchase agreements with Barclays, Barclays Capital Securities Ltd., Barclays Capital Inc. and other sellers that may be appointed. The repurchase agreements may be backed by a wide variety of government, sovereign, supranational, agency, corporate, structured finance, convertible bond and equity securities that will be denominated in various currencies and subject to daily margin requirements. Eligible assets and margin haircuts are defined in the repo collateral schedules and will vary for each class of notes. Title over repurchase agreement collateral is transferred to the security trustee, The Bank of New York Mellon (BNY; AA-/Stable/F1+) and held on behalf of each noteholder. Each note is allocated a specific, segregated collateral account, held with a custodian bank (JPMorgan Chase Bank, N.A. (AA-/Stable/F1+), BNY or Clearstream Banking S.A. (AA/Stable/F1+) depending on the note series). In the event that the LLP defaults or there is a repurchase event of default by a seller combined with an issuer event of default, the related classes of notes will be accelerated, becoming due and payable immediately. If not paid, noteholders will receive the proceeds of the collateral liquidation and if the proceeds are insufficient to meet their claims in full, they will continue to rank as unsecured creditors of Barclays. However, there is no minimum timeframe for collateral liquidation, which exposes noteholders to market risk with respect to the repo collateral. Fitch assigns ratings to the series (as a programme rating) and not to the notes issued under the series. There is no assurance that notes issued under the series will be assigned a rating, or that the rating assigned to a specific issue under the series will have the same rating as the programme rating assigned to the series. Additional information is available in Fitch's new issue report 'Global Collateralised Medium Term Notes Issued by Barclays Bank plc' (December 2012) at www.fitchratings.com. RATING SENSITIVITIES The rating sensitivities are identical to those of Barclays Bank plc (see 'Fitch Affirms Barclays plc's IDR at 'A'; Rates Ring Fenced Bank 'A+ (EXP)', dated 28 September 2017 at www.fitchratings.com). Contact: Primary Analysts Evangelia Gkeka (Barclays GCMTN) Associate Director +44 20 3530 1829 Fitch Ratings Limited 30 North Colonnade London E14 5GN Claudia Nelson (Barclays Bank plc) Senior Director +44 20 3530 1191 Fitch Ratings Limited 30 North Colonnade London E14 5GN Secondary Analyst Ioana Sima Associate Director +44 20 3530 1736 Committee Chairperson Manuel Arrive Senior Director +33 1 44 29 91 77 Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria Closed-End Funds and Market Value Structures Rating Criteria (pub. 28 Jul 2017) here Global Bank Rating Criteria (pub. 25 Nov 2016) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here Solicitation Status here#solicitation Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE here. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. 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