Lloyds gets early tenders for $2.84 billion of notes in capped offers

By Susanna Moon

Chicago, Nov. 10 – Lloyds Banking Group plc said investors had tendered $2,839,769,000 of notes in its capped offer as of 5 p.m. ET on Nov. 9, the early tender date.

Lloyds is offering to repurchase up to a total of $2 billion of eight series of notes.

The breakdown for the early tenders is as follows, according to a company notice, with the notes listed in order of acceptance priority:

• $244,067,000 of the $400 million floating-rate notes due 2018 (Cusip: 53944VAF6)

• $400,521,000 of the $500 million floating-rate notes due 2018 (Cusip: 553944VAD1);

• $140.9 million of the $300 million floating-rate notes due 2018 (Cusip: 53944VAL3);

• $425,267,000 of the $700 million 2% notes due 2018;

• $508,776,000 of the $1 billion 2.3% notes due 2018;

• $204,475,000 of the $450 million floating-rate notes due 2019;

• $371.56 million of the $750 million 2.05% notes due 2019; and

• $544,203,000 of the $1 billion 2.7% notes due 2020.

Lloyds began the capped offers on Oct. 27, along with a tender for any and all of five series of notes and two exchange offers for eight series of its notes.

Investors had tendered $3,296,365,000 of five series of its notes in the any-and-all tender offer that ended at 5 p.m. ET on Nov. 3, with $18,907,000 principal amount of the notes using the guaranteed delivery procedures.

Holders had tendered €1,353,568,000 of eight series of its notes in the exchange offers that ended at 11 a.m. ET on Nov. 4.

Specifically, they tendered €614,657,000 of notes in the exchange offer A and €738,911,000 of notes in the euro exchange offer B.

The maximum tender offer will continue until 11:59 p.m. ET on Nov. 25.

Capped offer details

The total purchase price for each $1,000 principal amount of notes will be as follows, with pricing set for 11 a.m. ET on Nov. 10:

• $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.

The total purchase price includes a $50.00 early tender payment per $1,000 principal amount of notes tendered by the early deadline.

Lloyds will also pay accrued interest to but excluding settlement.

The maximum tender offer is set to continue until 11:59 p.m. on Nov. 25, with early settlement expected to occur on Nov. 15 and final settlement on Nov. 30.

In the capped offers, notes tendered before the early deadline will be accepted for purchase before those tendered afterward even if those have a higher acceptance priority level than the notes tendered before the early deadline.

Holders may no longer withdraw tendered notes as of the early deadline.

The offers are not conditioned on any minimum amount of notes being tendered.

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.”

Lloyds previously said it was tendering for the notes “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.”

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 banking and financial services company is based in London.

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