Barclays loses bond issue as Libor hits deals

BARCLAYS yesterday lost its first major business since the Libor-fixing scandal began, as a Japanese bank pulled out of a bond issue worth around $1bn.

The state-backed Japan Bank for International Cooperation had included Barclays among three banks advising on a five-year bond offering but left it out of the final offering.

“Barclays was dropped because of reasons related to reputational and counterparty risk issues,” said a banker with knowledge of the deal.

Leicestershire county council added to the firm’s woes by announcing plans to withdraw the £6m it holds on deposit with the bank. Although a relatively small sum it is highly symbolic because the council directly linked the decision to the Libor-rigging.

Meanwhile bookmaker Paddy Power stopped taking bets on the identity of Barclays’ next chief executive after yesterday taking 36 different bets for Rich Ricci, currently head of the firm’s investment banking operation.

“Punters were willing to back Rich Ricci at any price so it’s a safe assumption that the cat is out of the bag,” said a spokesman.

The US Department of Justice was yesterday urged by politicians to step up its investigation of Libor yesterday, with a group of Democratic senators weighing in for the first time.