Lloyds Banking begins tender, exchange offers for 21 series of notes

By Wendy Van Sickle

Columbus, Ohio, Oct. 27 – Lloyds Banking Group plc said it began a cash tender offer for 13 series of its notes and two exchange offers for eight series of its notes, according to two press releases.

Any and all tender

In the tender offer, Lloyds is offering to repurchase any and all of the notes from the following series:

• $1 billion 1.75% notes due 2018 (Cusip: 53944VAC3) at a price to be set using the 0.75% U.S. Treasury note due Sept. 30, 2018 plus 60 basis points;

• $1.25 billion 1.75% notes due 2018 (Cusip: 53944VAG4) at a price to be set using the 0.75% U.S. Treasury note due Sept. 30, 2018 plus 60 bps;

• $1 billion 2.35% notes due 2019 at a price to be set using the 1% U.S. Treasury note due Oct. 15, 2019 plus 70 bps;

• $1 billion 2.4% notes due 2020 at a price to be set using the 1.125% U.S. Treasury note due Sept. 30, 2021 plus 50 bps; and

• $1.25 billion 3.5% notes due 2025 at a price to be set using the 1.5% U.S. Treasury note due Aug. 15, 2026 plus 80 bps.

The any and all tender offer expires at 5 p.m. ET on Nov. 3. Notes may be withdrawn at any time until the deadline, and there is no early deadline for the any and all offer.

Pricing will be set at 11 a.m. ET on Nov. 3.

Settlement is expected to occur on Nov. 8.

Maximum tender offer

Lloyds is offering to repurchase up to a total of $2 billion of notes from the following series, with the notes listed in order of acceptance priority, and the prices listed being the total consideration per $1,000 principal amount of notes:

• $400 million floating-rate notes due 2018 (Cusip: 53944VAF6) for $1,001.50;

• $500 million floating-rate notes due 2018 (Cusip: 553944VAD1) for $1,002.50;

• $300 million floating-rate notes due 2018 (Cusip: 53944VAL3) for $1,006;

• $700 million 2% notes due 2018 at a price to be set using the 0.75% U.S. Treasury note due Sept. 30, 2018 plus 70 bps;

• $1 billion 2.3% notes due 2018 at a price to be set using the 0.75% U.S. Treasury note due Sept. 30, 2018 plus 70 bps;

• $450 million floating-rate notes due 2019 for $1,011.50;

• $750 million 2.05% notes due 2019 at a price to be set using the 1% U.S. Treasury note due Oct. 15, 2019 plus 65 bps; and

• $1 billion 2.7% notes due 2020 at a price to be set using the 1.125% U.S. Treasury note due Sept. 30, 2021 plus 50 bps.

Each of the total consideration amounts includes a $50.00 early tender payment for notes tendered by the early deadline of 5 p.m. ET on Nov. 9.

Holders may withdraw notes under the maximum tender offer at any time through the early deadline.

The maximum tender offer expires at 11:59 p.m. on Nov. 25.

Pricing will be set at 11 a.m. ET on Nov. 10.

Early settlement is expected to occur on Nov. 15 and final settlement on Nov. 30.

Lloyds will also pay accrued interest to but excluding settlement for each series of notes.

The offers are not conditioned on any minimum amount of notes being tendered but are subject to some other conditions.

Lloyds said it launched the tender offers “in order to provide the holders of the notes with an opportunity to have their notes repurchased while maintaining a prudent approach to funding and liquidity as part of the group's ongoing liability management.”

Exchange offers

Concurrently with the offers, Lloyds is holding an exchange offer for certain of its euro-denominated debt securities, which is open to holders that are not residents of the United States.

Lloyds is offering to exchange the following notes, listed in priority order, for up to total of €1.5 billion of its euro A new notes:

• €750 million notes due Oct. 9, 2018 with a floating coupon of Euribor plus 50 bps at an exchange price of 100.75;

• €1 billion 0.625% notes due April 20, 2020 at an exchange price to be set using mid-swaps plus 10 bps;

• €1 billion 1.875% notes due Oct. 10, 2018 at an exchange price of mid-swaps flat;

• €1.35 billion notes due Sept. 10, 2019 with a floating coupon of Euribor plus 45 bps at an exchange price of 101; and

• €1,062,350,000 5.375% notes due Sept. 3, 2019 at an exchange price of mid-swaps flat.

The euro A new notes will be due Nov. 9, 2021 and will carry a coupon of mid-swaps plus 80 bps.

Lloyds is offering to exchange the following notes, listed in priority order, for up to total of €1.5 billion of its euro B new notes:

• €1.25 billion 1.25% notes due Jan. 13, 2025 at an exchange price of mid-swaps plus 30 bps;

• €1.5 billion 1% notes due Nov. 19, 2021 at an exchange price of mid-swaps plus 25 bps; and

• €1.25 billion 1.375% notes due Sept. 8, 2022 at an exchange price of mid-swaps plus 30 bps.

The euro B new notes will be due Nov. 9, 2023 and will carry a coupon of mid-swaps plus 90 bps.

Each of these exchange offers is conditioned on enough notes being exchanged to result in the issuance of at least €500 million of new notes from each respective series, but each offer is not conditioned on satisfaction of the minimum condition of the other.

Holders will be issued new notes in minimum principal amounts of €100,000.

The exchange offers expire at 11 a.m. ET on Nov. 4.

Pricing will be set at 9 a.m. ET on Nov. 7.

Settlement is expected on Nov. 9.

Agents and dealers

The tender and exchange agent is Lucid Issuer Services Ltd. (attn: David Shilson/Arlind Bytyqi, +44 20 7704 0880 or lloydsbank@lucid-is.com).

The global coordinator is Lloyds Bank (855 400-6511, 212 827-3105, +44 20 7158 2720 or liability.management@lloydsbanking.com).

The joint dealer managers of the tender offers are BNP Paribas (888 210-4358, 212 841-3059, +44 20 7595 8668 or liability.management@bnpparibas.com), Deutsche Bank Securities Inc. (866 627-0391, 212 250-2955, +44 20 7545 8011 or liability.management@db.com) and UBS Ltd. (888 719-4210, 203 719-4210, +44 20 7568 2133 or ol-liabilitymanagement-eu@ubs.com).

The global coordinator and joint dealer manager of the exchange offer is Lloyds Bank (+44 20 7158 2720 or liability.management@lloydsbanking.com).

Other joint dealer managers of the exchange offers are BNP Paribas (+44 20 7595 8668 or liability.management@bnpparibas.com) and Deutsche Bank Securities Inc. (+44 20 7545 8011 or liability.management@db.com).

The banking and financial services company is based in London.

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