Update: Barclays shares slump on £5.8bn rights issue

Barclays shares have dropped by more than 7% after it announced a £5.8bn rights issue to shore up its capital position.

Barclays said the capital raising plans, designed to meet the Prudential Regulation Authority's leverage ratio target of 3% by June 2014, will see it issue stock at 185p per share, a 40% discount to yesterday's closing price. The bank will also issue £2bn of convertible debt and shrink its balance sheet in a bid to close a funding gap of some £12.8bn, it said. Barclays shares slumped 7.4% to 286p this morning after the plans were revealed, following on from a 3.5% decline yesterday when rumours of a rights issue gained credence. The announcement came as Barclays reported a 17% drop...