Lloyds accepts tenders for €231.53 million HBOS perpetual preferreds

By Jennifer Chiou

New York, Feb. 9 - Lloyds TSB Bank plc announced that it will issue €153.66 million of new notes due Feb. 12, 2024 in exchange for the €231,525,000 of tenders for the €415 million of fixed-to-floating guaranteed non-voting non-cumulative preferred perpetual securities issued by HBOS Euro Finance (Jersey) LP.

The exchange offer ended at 11 a.m. on Feb. 8.

The exchange price was 66% of par plus accrued interest, and holders had to tender enough notes to be able to receive at least €50,000 principal amount of new notes in the offer.

As reported, interest on the existing tier 1 notes is Euribor plus 287.5 basis points, and notes are next callable on March 9.

Holders will receive new lower tier 2 notes issued by Lloyds, which will be callable on Feb. 12, 2019.

The new notes' 10.375% initial coupon was calculated using the sum of 8.5%, which was the euro new notes spread, and the seven-year euro mid-swap rate, rounded down to the nearest 0.125%. The reset coupon will be the sum of 8.50% and a reset five-year mid-swap rate. The new notes will be issued in denominations of €1,000.

The new notes priced at 99.413 to yield 10.497%.

Lucid Issuer Services Ltd. (+44 20 7704 0880, attn: Sunjeeve Patel, or e-mail: lbg@lucid-is.com) was the exchange agent. Lloyds TSB Bank plc (+44 20 7158 3981, attn: liability management group, or e-mail: liability.management@lloydsbanking.com) and Merrill Lynch International (+44 20 7995 3715/+44 20 7995 2324, attn: John Cavanagh or Tommaso Gros-Pietro, or e-mail: john.m.cavanagh@baml.com or tommaso.gros-pietro@baml.com) were the dealer managers.

The retail bank is based in London and Edinburgh.

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