Not everything that has happened to Barclays in the past few years has been positive. But behind the scenes, the UK financial services group is gaining a clear reputation for the growing sophistication of its capital and balance-sheet management. Two recent deals, both linked to balance-sheet management, have greatly enhanced the bank's reputation, both as a borrower and as an innovative deal maker.
In November 1999, Barclays secured the largest European credit card securitization to date via Barclays Capital. Although this was Barclays' first credit card securitization for its Barclaycard business, this did not stop the bank from wading into the market to set a new benchmark for securities backed by European credit-card receivables. Rather than issue into Europe's fledgling asset-backed market, Barclays headed straight for the most liquid market for asset-backed securities in the US. The resulting deal, a $1 billion three-year soft bullet, was of a similar size to transactions by US credit-card companies that form the bedrock of the US asset-backed market. Although Barclays went first to the US markets, the innovative new structure of the deal, which borrowed some mechanics from MTN programme structures, will allow the issuer to follow up with deals in other currencies.