Lloyds Banking Group PLC Exchange Offer Final Results (5080G)

TIDMLLOY

RNS Number : 5080G

Lloyds Banking Group PLC

25 November 2020

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OF AMERICA OR THE DISTRICT OF COLUMBIA (THE "UNITED STATES") OR INTO ANY OTHER JURISDICTION OR TO ANY OTHER PERSON WHERE OR TO WHOM IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS DOCUMENT.

LLOYDS BANKING GROUP PLC ("LBG") ANNOUNCES FINAL RESULTS OF ITS INVITATIONS TO EXCHANGE THE STERLING DENOMINATED SUBORDINATED SECURITIES LISTED BELOW (THE "EXISTING NOTES") FOR A COMBINATION OF (I) A SINGLE SERIES OF NEW STERLING DENOMINATED SUBORDINATED NOTES (THE "NEW TIER 2 NOTES") TO BE ISSUED BY LBG AND (II) ANY APPLICABLE CASH CONSIDERATION AMOUNT

25 November 2020

Further to its announcements on 16 November 2020 and 25 November 2020, Lloyds Banking Group plc (the "Offeror") is today announcing the final results of its invitations to all Holders (subject to the Offer Restrictions referred to below) of:

-- the Existing Tier 1 Notes, set out under the heading "Existing Tier 1 Notes" below, to Offer to Exchange such Existing Tier 1 Notes which are outstanding; and

-- the Existing Tier 2 Notes, set out under the heading "Existing Tier 2 Notes" below, to Offer to Exchange such Existing Tier 2 Notes which are outstanding,

together, the "Exchange Offers" and each an "Exchange Offer".

The Exchange Offers were made on the terms of and subject to the conditions contained in an exchange offer memorandum dated 16 November 2020 (the "Exchange Offer Memorandum"). Capitalised terms not otherwise defined in this announcement have the same meaning as assigned to them in the Exchange Offer Memorandum.

RESULTS OF THE EXCHANGE OFFERS

The Minimum New Issue Size Condition has been satisfied.

For the Offer to Exchange the Existing Tier 1 Notes, the aggregate principal amount accepted for exchange is GBP825,655,000.

For the Offer to Exchange the Existing Tier 2 Notes, the aggregate principal amount accepted for exchange is GBP207,535,000.

All valid Offers to Exchange Existing Tier 1 Notes in the Exchange Offers have been accepted in full without pro-ration. The Tier 2 Notes Acceptance Amount is GBP207,535,000.

All valid Offers to Exchange the 2023 Notes have been accepted in full without pro-ration. The Offeror has not accepted any Offers to Exchange in respect of the GBP750,000,000 7.625 per cent. Dated Subordinated Notes due 22 April 2025 (XS0503834821) issued by Lloyds Bank plc.

The Existing Notes set out in the table below shall be exchanged for New Tier 2 Notes as further described below.

 
                                                 EXISTING TIER 1 NOTES 
     ISIN        Issuer     Current   Maturity    First       Exchange       New Tier         Cash         Principal 
                             Coupon      Date      Call    Consideration*     2 Notes     Consideration    amount of 
                              (%)                  Date         (%)        Consideration   Amount (per      Existing 
                                                                            Amount (per     GBP1,000     Notes accepted 
                                                                             GBP1,000     in principal    for exchange 
                                                                           in principal     amount of 
                                                                             amount of      Existing 
                                                                             Existing        Notes) 
                                                                              Notes) 
                ---------  ---------  ---------  --------  --------------  -------------  -------------  -------------- 
                 Bank of 
                 Scotland                         31 May 
 XS0125686229      plc     7.281[1]   Perpetual    2026        121.75        GBP885.12      GBP332.38    GBP131,904,000 
                ---------  ---------  ---------  --------  --------------  -------------  -------------  -------------- 
                                                    22 
                 Lloyds                          January 
 XS0408620721    Bank plc  13.000[2]  Perpetual    2029      181.75[3]      GBP1,428.55     GBP388.95    GBP456,424,000 
                ---------  ---------  ---------  --------  --------------  -------------  -------------  -------------- 
                  HBOS 
                 Sterling 
                 Finance                            9 
                 (Jersey)                        December 
 GB0058327924      L.P.    7.881[4]   Perpetual    2031        166.00       GBP1,660.00      GBP0.00     GBP237,327,000 
                ---------  ---------  ---------  --------  --------------  -------------  -------------  -------------- 
 
 
                                                                 EXISTING TIER 2 NOTES 
    ISIN       Issuer   Current  Maturity     Reference     Exchange  Exchange     Exchange       New Tier         Cash           Series      Pro-Ration 
                         Coupon    Date       Benchmark      Spread     Yield   Consideration*     2 Notes     Consideration    Acceptance      Factor 
                          (%)                                                        (%)        Consideration     Amount          Amount 
                                                                                                 Amount (per   (per GBP1,000 
                                                                                                  GBP1,000     in principal 
                                                                                                in principal      amount 
                                                                                                  amount of     of Existing 
                                                                                                  Existing        Notes) 
                                                                                                   Notes) 
               -------  -------  --------  ---------------  --------  --------  --------------  -------------  -------------  --------------  ---------- 
                                           0.750% Treasury 
                                               Gilt due 
                                             22 July 2023 
               Lloyds                       (GB00BF0HZ991) 
                 Bank            6 April      Bloomberg 
XS0043098127     plc     9.625     2023       Page PXUK      85bps     0.806%      120.369        GBP703.69      GBP500.00    GBP207,535,000     n.a. 
               -------  -------  --------  ---------------  --------  --------  --------------  -------------  -------------  --------------  ---------- 
XS0503834821   Lloyds    7.625      22     0.625% Treasury   100bps     n.a.         n.a.           n.a.           n.a.            GBP0          n.a. 
                 Bank              April       Gilt due 
                 plc               2025      7 June 2025 
                                            (GB00BK5CVX03) 
                                              Bloomberg 
                                              Page PXUK 
               -------  -------  --------  ---------------  --------  --------  --------------  -------------  -------------  --------------  ---------- 
 

*Including both the consideration in the form of New Tier 2 Notes and the Cash Consideration Amount (where applicable)

The New Tier 2 Notes

The table below confirms certain key characteristics of the New Tier 2 Notes to be issued by LBG pursuant to the Exchange Offers. Further details of the New Tier 2 Notes will be set out in the New Tier 2 Notes Final Terms which will be published on the Settlement Date (the form of which is set out in the Exchange Offer Memorandum). The New Tier 2 Notes ISIN is XS2265524640.

 
Issuer of   Capital   Currency   Reference   New Tier    New Tier   New Tier   Optional    Maturity      New Issue 
 the New      Type                  Gilt      2 Notes    2 Notes     2 Notes  Redemption     Date          Amount 
   Tier                             Rate     Yield (%)    Issue      Initial     Date 
 2 Notes                                                  Price      Coupon 
                                                                       (%) 
  Lloyds 
  Banking     Tier                                                            3 December  3 December 
 Group plc      2        GBP      0.307%      2.707        100%      2.707       2030        2035     GBP1,308,572,000 
            --------  ---------  ---------  ----------  ----------  --------  ----------  ----------  ---------------- 
 

The New Tier 2 Notes will be in bearer form in denominations of GBP100,000 and integral multiples of GBP1,000 in excess thereof up to and including GBP199,000, and will initially be issued in global form.

Applications are intended to be made to the Financial Conduct Authority under Part VI of the Financial Services and Markets Act 2000 for the New Tier 2 Notes to be admitted to the Official List of the Financial Conduct Authority and to the London Stock Exchange plc for the New Tier 2 Notes to be admitted to trading on the London Stock Exchange's regulated market. The London Stock Exchange's regulated market is a regulated market for the purposes of Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments. Such admission is expected to occur on the Settlement Date.

Further details of the New Tier 2 Notes are set out in the Exchange Offer Memorandum.

Holders whose Existing Notes Offered for Exchange are not accepted, or who do not participate in the Exchange Offers, will not be eligible to receive New Tier 2 Notes in exchange for such Existing Notes, will not be entitled to receive any Cash Consideration Amount and will continue to hold such Existing Notes subject to their terms and conditions.

Exchange Consideration, New Tier 2 Notes Consideration Amounts and Cash Consideration Amounts

Holders who validly Offered to Exchange their Existing Notes at or prior to the Expiration Time and whose Offers to Exchange have been accepted will receive New Tier 2 Notes in an amount (rounded down to the nearest GBP1,000) based upon the aggregate principal amount of such Existing Notes accepted for exchange and the relevant New Tier 2 Notes Consideration Amount, subject to the requirement for each Holder to exchange at least the relevant Minimum Offer Amount.

Where applicable, each such Holder will also be entitled to receive, in respect of each GBP1,000 in principal amount of the Existing Notes accepted for exchange, the Cash Consideration Amount (if any). For avoidance of doubt, the sum of the New Tier 2 Notes Consideration Amount, the Cash Consideration Amount (if any) and the Cash Rounding Amount (if any, as detailed below) shall be equal to the Exchange Consideration when expressed as an amount per GBP1,000 in principal amount of the Existing Notes accepted for exchange.

Accrued Interest Payments and Cash Rounding Amounts

If, as a result of the application of the relevant New Tier 2 Notes Consideration Amount, a Holder who validly Offered to Exchange Existing Notes at or prior to the Expiration Time and whose Offer to Exchange has been accepted would be entitled to receive an aggregate principal amount of New Tier 2 Notes that is not an integral multiple of GBP1,000, the Offeror will pay, or procure that there is paid, in cash in sterling to that Holder on the Settlement Date, a Cash Rounding Amount, which is the amount equal to the fractional portion of such aggregate principal amount that is not such an integral multiple (rounded to the nearest GBP0.01, with half a penny being rounded upwards).

Each such Holder will also be entitled to receive any applicable Accrued Interest Payments in respect of their Existing Notes accepted for exchange. Accordingly, given that the Accrued Interest Payments will be paid pursuant to the relevant Exchange Offer, Holders whose Existing Notes have been accepted for exchange pursuant to the Exchange Offers will not be entitled to receive any further payment pursuant to the terms of such Existing Notes in respect of accrued and unpaid interest. Furthermore, Holders of any Lloyds Bank Perpetual Securities which have been accepted for exchange will not be entitled to receive any further payment, shares or other compensation in respect of any deferred and unpaid coupons in respect of such Lloyds Bank Perpetual Securities; consideration for deferred and unpaid coupons is deemed to be included in the applicable Exchange Consideration.

Settlement Date

The Settlement Date for each of the Exchange Offers, including (i) delivery of the New Tier 2 Notes in exchange for Existing Notes validly Offered for Exchange and accepted and (ii) payment of Accrued Interest Payments, Cash Rounding Amounts (if any) and Cash Consideration Amounts (if any), is expected to be on or around 3 December 2020.

This announcement contains inside information in relation to the Existing Notes and is disclosed in accordance with the Market Abuse Regulation (EU) 596/2014 ("MAR"). For the purposes of MAR, this announcement is made by Douglas Radcliffe, Group Investor Relations Director.

FURTHER INFORMATION

For further information please contact:

Investor Relations:

Douglas Radcliffe

Group Investor Relations Director

Telephone: [phone]

Email: [e-mail]

Corporate Affairs:

Matthew Smith

Head of Media Relations

Tel: [phone]

Email: [e-mail]

Requests for information in relation to the Exchange Offers should be directed to:

GLOBAL CO-ORDINATOR & JOINT DEALER MANAGER

 
       Lloyds Bank Corporate Markets plc 
                10 Gresham Street 
                 London EC2V 7AE 
                 United Kingdom 
 
        Telephone: [phone]/1726 
      Attention: Liability Management Team 
  email: [e-mail] 
 

JOINT DEALER MANAGERS

 
      Goldman Sachs International          Merrill Lynch International 
             Plumtree Court                    2 King Edward Street 
              25 Shoe Lane                        London EC1A 1HQ 
            London EC4A 4AU                       United Kingdom 
             United Kingdom 
                                            Telephone: [phone] 
      Telephone: [phone]         Attention: Liability Management 
    Attention: Liability Management                    Group 
                 Group                      email: [e-mail] 
  email: [e-mail] 
 
 

Requests for information in relation to, and for any documents or materials relating to, the Exchange Offers should be directed to:

 
         EXCHANGE AGENT 
  Lucid Issuer Services Limited 
         Tankerton Works 
          12 Argyle Walk 
              London 
             WC1H 8HA 
          United Kingdom 
 
      Tel: [phone] 
     Attention: Arlind Bytyqi 
  Email: [e-mail] 
 

DISCLAIMER

This announcement must be read in conjunction with the Exchange Offer Memorandum and the announcements in connection with the Exchange Offers published via RNS on 16 November 2020 and 25 November 2020. None of the Offeror, the Joint Dealer Managers, the Exchange Agent and any person who controls, or is a director, officer, employee or agent of such persons, or any affiliate of such persons, makes any recommendation in connection with the Exchange Offers.

This announcement does not constitute an offer or an invitation to participate in the Exchange Offers in the United States or in any other jurisdiction in which, or to any person to or from whom, it is unlawful to make such offer or invitation or for there to be such participation under applicable laws.

[1] Resets on 31 May 2026 to the aggregate of 4.095 per cent. per annum and the Five Year Benchmark Gilt Rate.

[2] Resets on 22 January 2029 to the aggregate of 13.40 per cent. per annum and the Five Year Benchmark Gilt Rate.

[3] The Exchange Consideration in respect of this Series shall be deemed to include consideration for the deferred and unpaid coupons on the Existing Notes of this Series which have been accepted for exchange.

[4] Resets on 9 December 2031 to the aggregate of 4.40 per cent. per annum and the Five Year Benchmark Gilt Rate.

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November 25, 2020 08:01 ET (13:01 GMT)