Lloyds gets early tenders for $2.84 billion notes in oversubscribed capped offers; pricing set

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.

The company was offering to repurchase up to a total of $2 billion of eight series of notes and then on Thursday increased the aggregate purchase price to $2,312,483,060.46.

Lloyds accepted for purchase $2,295,566,000 principal amount of the notes tendered by the early deadline, according to company notice.

The issuer will purchase all of the tendered notes for the first seven series and none of the tenders for the last-priority notes.

The breakdown for the early tenders is as follows, with the notes listed in order of acceptance priority:

• $244,067,000 of the $400 million floating-rate notes due 2018 (Cusip: 53944VAF6), and all of those notes were accepted for purchase;

• $400,521,000 of the $500 million floating-rate notes due 2018 (Cusip: 553944VAD1), and all of those notes were accepted for purchase;

• $140.9 million of the $300 million floating-rate notes due 2018 (Cusip: 53944VAL3), and all of those notes were accepted for purchase;

• $425,267,000 of the $700 million 2% notes due 2018, and all of those notes were accepted for purchase;

• $508,776,000 of the $1 billion 2.3% notes due 2018, and all of those notes were accepted for purchase;

• $204,475,000 of the $450 million floating-rate notes due 2019, and all of those notes were accepted for purchase;

• $371.56 million of the $750 million 2.05% notes due 2019, and all of those notes were accepted for purchase; and

• $544,203,000 of the $1 billion 2.7% notes due 2020, and none of those notes were accepted for purchase.

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.

The maximum tender offer is now set to continue until 11:59 p.m. ET on Nov. 28, extended from 11:59 p.m. ET on Nov. 25, with early settlement on Nov. 15.

Because the offer has been oversubscribed as of the early deadline, however, the company said it will not accept for purchase any more notes tendered after the early tender deadline in the capped offers.

Capped offer details

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

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

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

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

• $1,007.04 for the 2% notes due 2018 with pricing set using the 0.75% U.S. Treasury note due Sept. 30, 2018 plus 70 basis points for a reference yield of 0.891%;

• $1,014.13 for the 2.3% notes due 2018 with pricing set using the 0.75% U.S. Treasury note due Sept. 30, 2018 plus 70 bps for a reference yield of 0.891%;

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

• $1,005.84 for the 2.05% notes due 2019 with pricing set using the 1% U.S. Treasury note due Oct. 15, 2019 plus 65 bps for a reference yield of 1.126%; and

• $1,024.64 for the 2.7% notes due 2020 with pricing set using the 1.125% U.S. Treasury note due Sept. 30, 2021 plus 50 bps for a reference yield of 1.515%.

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.

More details

As previously announced, 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.

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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