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By Steve Slater
LONDON, June 13 (Reuters) - Britain's Barclays Plc is to issue almost $4 billion of bonds that can convert intoshares if the bank hits trouble after an offer to debtinvestors to exchange old bonds had much higher than expectedtake-up.
The new bonds are the latest move by Barclays to adjust itsbalance sheet structure to improve its capital and leverageratios to meet stricter new regulations.
Barclays last month offered the holders of some sterling,euro and dollar-denominated bonds the chance to swap into newinstruments, called additional Tier 1 (AT1) securities, thatmeet the new global rules.
The bank announced the results of the offer on Friday andsaid as a result it will issue $1.2 billion of newdollar-denominated AT1 bonds, 698 million pounds ($1.2 billion)of sterling instruments, and 1.1 billion euros ($1.5 billion) ofeuro-denominated bonds.
Barclays has previously said it plans to issue about 7billion pounds ($11.8 billion) of bonds that would convert intoshares if its core equity ratio falls below a certain level,which for UK banks has been typically set at 7 percent.
It has so far sold about 2 billion pounds of theinstruments, dubbed contingent capital or "CoCos", so theexchange offer will lift its issuance to over 4 billion pounds,or more than half its plan.
There has been a rush of European banks selling CoCos thisyear, which are regarded as riskier than normal debt due to thepossibility of conversion into shares, but are attractive toinvestors as they typically pay annual interest of 6-9 percent.
Bankers predict up to a record $60 billion of AT1 bondscould be issued this year, led by banks such as Barclays,Deutsche Bank and Societe Generale.
The aim of the bonds is to create an extra layer ofprotection to prevent a repeat of the 2007-2009 financial crisiswhen taxpayers bore the brunt of bank bailouts. ($1 = 0.7345 Euros)($1 = 0.5956 British Pounds) (Editing by Erica Billingham)