Barclays close to selling government-backed bonds

LONDON: Barclays PLC, Britain's second largest bank, on Tuesday confirmed a report by Cazenove bank that it is close to selling at least 1 billion pounds (US$1.7 billion) worth of bonds backed by the British government.

In a private e-mail to clients, Cazenove wrote: ``Barclays is close to issuing a three-year note'' worth at least 1 billion pounds (US$1.7 billion) ``under the government's guarantee.''

Cazenove called the imminent deal one of ``the first signs of thawing for bank funding.'' ``We can confirm that Cazenove's note is an accurate reflection of'' what Barclays is talking about doing, said Marc Hazelton, spokesman for Barclays.

Barclays is in the process of raising 6.5 billion pounds (US$10.9 billion) to increase its capital through selling shares to private investors. It will not be accepting investment from the government in the way that rival banks Royal Bank of Scotland Group PLC, Lloyds TSB Group PLC and HBOS PLC are. Shares rose 2.4 percent on the London Stock Exchange to 242.5 pence (US$4.09).