25.04.2012
By Simon Miller
Barclays has become the first UK bank to be accused of Libor rate fixing in a High Court.
Care home owner Graisley Properties and Graisley Investments - which runs Guardian Care Homes - - has issued a £36m claim against the bank alleging that it fixed Libor to provide borrowing rates it knew to be incorrect.
In a legal writ it is claimed that Barclays' investment arm mis-sold Guardian Care Homes two interest rate hedging products and is claiming around £12m in interest rate payments the care home company says it shouldn't had mede as well as a further £24m in break costs.
Regulators around the world are currently investigating claims that Libor was suppressed and the writ follows a settlement that the care home operator made with Lloyds Banking Group over similar mis-selling claims.
Guardian Care Homes claims that a January 2009 decision by Barclays that the company was in breach of a loan-to-value covenant could have beeb incorrect if the Libor rate had been suppressed.
The case is the first in the UK to specifically allege Libor manipulation although the UK's major banks have been named in several US lawsuits over Libor-linked derivative sales.
Other stories you may find of interest:
Investors fear unsecured bank creditors will lose out
European fixed-income investors are worried that increased use of secured funding by banks could lead to potential structural subordination according to a survey from Fitch Ratings. .
