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Summary: Barclays Capital Inc./FMSbonds Inc. (Series 2021-XF2953TX); Tender Option Certificates/Bonds


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Summary: Barclays Capital Inc./FMSbonds Inc. (Series 2021-XF2953TX); Tender Option Certificates/Bonds


Closing date:

Oct. 14, 2021



Credit provider:

Barclays Bank PLC


FMSbonds Inc.

Remarketing agent:

Barclays Capital Inc.


S&P Global Ratings assigned the above-mentioned ratings to the notes, reflecting its opinion of the likelihood the trust will have sufficient assets to pay timely interest and full principal when due on the notes.

Trust assets include all distributions of principal; interest; and premiums, if any, from the underlying securities and the direct-pay letter of credit (LOC), which is in place to support regular principal-and-interest and tender payments on the notes. Distributions from the underlying securities reimburse the credit provider and pay unrated residual receipts.

The long-term component of our rating on the notes reflects the rating on Barclays Bank PLC, as credit provider, and addresses full and timely interest-and-principal payments when noteholders have not exercised the put option. The short-term component reflects our rating on Barclays Bank PLC as credit provider and addresses full and timely interest-and-principal payments when noteholders exercise the put option.

Our ratings do not reflect our opinion of the likelihood noteholders will receive the full and timely payment of premiums or gain-share payments, and they do not reflect our opinion of the likelihood such payments will be subject to the entity funding such payments potentially filing for bankruptcy.

Based on our analysis, we think the trust's assets support the full and timely payment of all obligations on the notes, except in certain circumstances as described in the structural review section.

Environmental, social, and governance (ESG) factors

Our ratings on these notes are linked to the credit provider. ESG factors that have an effect on the ratings on this linked entity could also have an effect on the ratings on these notes. Our assessment of the creditworthiness of the credit provider incorporates any material ESG credit factors. In our view, exposure to ESG factors in this transaction is limited to the factors related to the credit provider. (For further information on the ESG considerations relevant for bank ratings and underlying securities, refer to the U.S. and Canadian, EMEA, Asia-Pacific, and Latin American bank ESG industry report cards and the article, titled "Through The ESG Lens 2.0: A Deeper Dive Into U.S. Public Finance Credit Factors," published April 28, 2020, on RatingsDirect.)

Structural Review

On the closing date, the trust acquired the underlying securities and concurrently entered into a credit-enhancement agreement in the form of a direct-pay LOC that supports principal-and-interest and tender payments on the notes. Notes will evidence a beneficial interest in trust assets, including the credit-enhancement agreement. Tender payments on the notes are payable from remarketing proceeds, liquidation proceeds of the underlying securities in the case of a failed remarketing, and draw proceeds from the credit provider in the case of insufficient liquidation proceeds.

Put-option risks

The notes are a variable-rate issuance with a holder option to demand repayment before notes mature (known as the put or tender option), which is available during rated modes. The holders could exercise their put option with notice to the appropriate parties, such as the trustee or remarketing agent.

Early call/redemption risk

Notes are also subject to mandatory tender upon the occurrence of certain events detailed in trust documents. These events include:

  • The expiration, termination, and substitution of a credit-enhancement agreement;
  • A mode-rate conversion; or
  • The trust being noncompliant with current financial market regulations.

Certain mandatory tender events allow noteholders to exercise an affirmative option to retain their notes in lieu of receiving the purchase price. Noteholders, however, must provide written acknowledgement they understand the rating on the notes could be lowered or withdrawn.

Notes are also subject to either whole or partial redemption due to the redemption of underlying securities.

Liquidity termination risk

No tender-option-termination events are present in this transaction.

Rating Sensitivity

Changes to our rating on the notes could result from, among other things, changes to transaction terms or our ratings on the credit provider. The credit facility could expire prior to note maturity. If the credit-enhancement agreement has not been extended, or if an alternative credit-enhancement agreement has not been delivered, we could withdraw the short-term component of the ratings on the notes.

Related Research

Through The ESG Lens 2.0: A Deeper Dive Into U.S. Public Finance Credit Factors, April 28, 2020

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at for further information. Complete ratings information is available to subscribers of RatingsDirect at All ratings affected by this rating action can be found on S&P Global Ratings' public website at Use the Ratings search box located in the left column.

Primary Credit Analyst:Santos Souffront, New York + 1 (212) 438 2197;
Secondary Contact:Nicholas Breeding, New York (303) 721-4362;

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