Barclays to Sell Former Lehman Bond Benchmarks to Bloomberg 

• Bank makes $721 million gain selling analytics, index business

• Sale comes as new CEO Jes Staley speeds up non-core disposals

Barclays Plc agreed to sell the indexing business built around former Lehman Brothers benchmarks to Bloomberg LP for about 520 million pounds ($781 million), as Chief Executive Officer Jes Staley speeds up disposals of unwanted assets.

Barclays said it will post a 480 million-pound gain from selling the risk analytics and index solutions business, boosting its regulatory capital level by 0.1 percentage point, according to a statement Wednesday from the London-based bank. The deal needs antitrust approval and should be completed “mid-2016,” Barclays said. Bloomberg LP is the parent company of Bloomberg News.

The bank’s indexes, such as the Global Aggregate, are widely used as corporate bond benchmarks by portfolio managers. Much of the business was acquired in 2008, when Barclays absorbed Lehman Brothers Holdings Inc.’s North American unit. Staley, a 58-year-old veteran of JPMorgan Chase & Co., was hired by Chairman John McFarlane in October to accelerate the bank’s restructuring and refocus on its most profitable British and U.S. businesses.

“This transaction is further evidence of the good work we are doing in managing down our non-core assets so that shareholders can feel the full benefit of ownership of Barclays’s well-performing core businesses,” Staley said in the statement.

The division being sold, known as BRAIS, also builds bespoke indexes and structured products for clients, allowing them to gain exposure to specific markets, according to Will Bowen, a spokesman for the London-based lender.

The indexes Barclays acquired from Lehman were the first to be published, beginning in 1973, the firm said at the time of the transaction. Barclays combined the Lehman benchmarks with its own and renamed the amalgamated measures the “Barclays Capital Indices” in November 2008.

While the purchase prices equates to $781 million at today’s exchange rate, Barclays gave it a $790 million value in the statement, using a rate of $1.52 per pound.

Source: Bloomberg – Barclays to Sell Former Lehman Bond Benchmarks to Bloomberg

Bloomberg Announcement:

Bloomberg to Acquire Barclays Risk Analytics and Index Solutions Business

Bloomberg L.P. announced that it has entered into an agreement to acquire Barclays Risk Analytics and Index Solutions Ltd. (“BRAIS”), a leading provider of benchmark and strategy indices, portfolio analytics, risk and attribution models, and portfolio construction tools. BRAIS’s benchmark indices span global markets covering multiple asset classes, most notably the Barclays Family of Aggregate Bond Indices.

“As financial markets continue to evolve, our clients need and expect the index business to evolve too,” said Michael R. Bloomberg. “Combining the market-leading Barclays indices and their superb team with our data management, analytics and distribution will provide more independence, liquidity and transparency to the marketplace, improve industry innovation and further meet the diverse needs of our global client base.”

The BRAIS acquisition will extend the complementary investments that Bloomberg has made in the index business to date and drive further value to Bloomberg clients, as these indices are integrated into Bloomberg’s analytic dashboards, portfolio analytics, order management systems, and execution management systems. Bloomberg currently participates in the index business through theBloomberg Commodity Index, also known as BCOM (formerly the UBS-Dow Jones Commodities Index), and the Bloomberg AusBond Indices (formerly the UBS Australia Bond Index family).

Bloomberg has also increased its investments in PORT, the company’s multi-asset portfolio risk and analytics tool that has seen significant growth over the past five years. The Company intends to accelerate its investments in this area by acquiring the intellectual property in POINT, Barclays’ portfolio analytics solution, and incorporating BRAIS IP into PORT. Barclays has agreed to continue to operate POINT for 18 months post completion in order to help clients transition to PORT.

“At a time when market structure change is causing increased demand for innovative solutions in fixed income, the industry and our mutual clients will benefit greatly from the combination of these assets,” said J.P. Zammitt, Global Head of Financial Products. “BRAIS’s talented team will bolster our investments and help us continue to innovate around better creation, sharing, publishing and benchmarking tools, as well as portfolio and risk analytics.”

Bloomberg and Barclays will maintain a co-branding arrangement on the benchmark indices for an initial term of five years.

The transaction is expected to be completed by mid-2016.

Source: Bloomberg – Bloomberg to Acquire Barclays Risk Analytics and Index Solutions Business

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