Lloyds buys £180 million of 5.625%, 6.875% notes under tender offer

By Susanna Moon

Chicago, May 22 - The Society of Lloyd's accepted tenders for €38,878,000 of its €300 million 5.625% fixed-to-floating subordinated notes due 2024 and £146,759,000 of its £300 million 6.875% subordinated notes due 2025, which works out to about £180 million total, according to a press release by Lloyds of London.

Investors tendered about £317 million of the two series of notes in the offer that ended at 11 a.m. ET on May 21. The company said on May 14 that it planned to accept for purchase £200 million of the two note series.

The purchase price will be €1,045 per €1,000 principal amount of 5.625% notes and £1,090 per £1,000 principal amount of 6.875% notes.

The purchase price and principal amount accepted for each series were based on a modified Dutch auction procedure, according to a previous press release. The minimum purchase price was €1,035 per €1,000 of 5.625% notes and £1,090 per £1,000 of 6.875% notes.

Lloyd's will also pay accrued interest.

The company said before that the tender offer would provide a degree of liquidity to holders whose notes are accepted in the tender invitation. In addition, Lloyd's will benefit from the reduction of costs associated with the ongoing servicing of the notes without materially affecting its capital position.

Offers were accepted in the following order:

• All non-competitive offers for notes of the relevant series, subject to possible proration;

• All competitive offers for notes of the relevant series with a price below the applicable purchase price;

• All competitive offers for notes of the relevant series with a price equal to the applicable purchase price, subject to possible proration.

Holders whose offers were accepted received the purchase price even if they made a non-competitive offer or offered a price that was lower than the purchase price.

If a note series was oversubscribed, offers were accepted on a pro rata basis.

Citigroup Global Markets Ltd. (44 0 20 7508 3867) is the dealer manager. Citibank, NA (44 0 20 7508 3867) is the tender agent.

The provider of specialty insurance and reinsurance is based in London.

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