I Smell a Rat - Barclays

Barclays is in the middle of some kind of high wire act and I'm not sure whether there is a net underneath. According to Reuters:

"The bank is raising funds privately rather than take cash from the UK government, unlike its rivals Royal Bank of Scotland, Lloyds TSB and HBOS. Those banks may take up to 37 billion pounds, which would leave the government as the major shareholder in each.

Barclays said it wants to maintain its commercial freedom by not resorting to state funds but critics said it would have been cheaper to make use of the government bailout."

Barclays is taking money from Middle East investors Qatar and Abu Dhabi, cancelling 2008 bonuses, putting all directors up for re-election next week and trying to digest the Lehman acquisition.

The problem is that some of the securities being offered to the Middle Eastern institutions pay 14% interest and current investors want a piece of the action. They are getting one to the tune of 500 million pounds of the offering, but they haven't gotten a good answer on why Barclays didn't just take the UK government money instead.