Lloyds Bank sets bondholder meeting to consider interest basis change

By Sarah Lizee

Olympia, Wash., Sept. 11 – Lloyds Bank plc said it set an Oct. 7 meeting for holders of its £1 billion series 2018-3 floating-rate covered bonds due March 2023 to consider an extraordinary resolution.

The issuer is seeking to amend the notes in order to implement a change in interest basis to the Sterling Overnight Index Average (Sonia) from Libor.

U.K. Financial Conduct Authority announced it will no longer persuade or compel banks to submit rates for the calculation of the Libor benchmark after the end of 2021. In addition, the Bank of England and the FCA mandated a working group to promote a broad-based transition to the Sonia over the next four years across sterling bond, loan and derivative markets, so that Sonia will be the primary sterling interest rate benchmark by the end of 2021.

In order the implement the change, the interest rate for the bonds will continue to be a floating rate and will be Sonia plus a margin. The adjusted margin will be the sum of 25 basis points and the Libor vs. Sonia interpolated basis. The adjustment margin will be announced following the pricing date, the issuer noted.

The solicitation agent is Lloyds Bank Corporate Markets plc (+44 20 7158 1719/1721 or liability.management@lloydsbanking.com).

Lloyds is a bank and financial services group based in London.

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