Lloyds Bank PLC TENDER OFFER OF DATED SUBORDINATED NOTES (7509U)

TIDM94WP

RNS Number : 7509U

Lloyds Bank PLC

03 August 2022

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 (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) (THE "UNITED STATES") OR TO ANY U.S. PERSON (AS DEFINED BELOW) OR TO ANY OTHER PERSON WHERE OR TO WHOM IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS DOCUMENT.

(SEE "OFFER AND DISTRIBUTION RESTRICTIONS" BELOW)

LLOYDS BANK PLC ANNOUNCES TER OFFER IN RELATION TO ONE SERIES OF DATED SUBORDINATED NOTES

3 August 2022

Lloyds Bank plc (the "Offeror") has today launched a tender offer to repurchase any and all of its GBP750,000,000 7.625 per cent. Dated Subordinated Notes due 2025 (the "Notes").

THE OFFER

On the terms of and subject to the conditions contained in a tender offer memorandum dated 3 August 2022 (the "Tender Offer Memorandum"), the Offeror has invited all Holders (subject to the Offer and Distribution Restrictions referred to below) of the Notes to tender their outstanding Notes for purchase by the Offeror for cash (the "Offer").

Capitalised terms not otherwise defined in this announcement have the same meaning as assigned to them in the Tender Offer Memorandum. The Tender Offer Memorandum is available from the Tender Agent (subject to the Offer and Distribution Restrictions referred to below).

Rationale for the Offer

The Offeror is making the Tender Offer as part of Lloyds Banking Group plc's ("LBG") continuous review and management of its outstanding capital base, maintaining a prudent approach to the management of LBG's capital position.

The Notes

The table below identifies the Notes which are subject to the Offer.

 
 
 Description of                  Nominal Amount                                          Repurchase      Purchase 
 the Notes        ISIN Number    Outstanding      Reference Yield        Fixed Spread    Yield[1]        Price 
---------------  -------------  ---------------  ---------------------  --------------  --------------  -------------- 
 
 GBP750,000,000   XS0503834821   GBP750,000,000   Yield to maturity of    +170 basis      Sum of the         To be 
   7.625 per                                       the 0.25 per cent.      points[2]       Reference     determined as 
  cent. Dated                                       U.K. Government                        Yield and      set out in 
  Subordinated                                     Gilts due January                     Fixed Spread     the Tender 
 Notes due 2025                                       2025 (ISIN:                                            Offer 
                                                     GB00BLPK7110)                                        Memorandum 
                                                  (as described in the 
                                                      Tender Offer 
                                                      Memorandum) 
 

Purchase Price

The Purchase Price in respect of the Notes will be announced in the Announcement of Pricing, Acceptance and Result of Offer on the Price Determination Date and determined in accordance with market convention, and will be the price which reflects a yield to maturity on the Settlement Date equal to the Repurchase Yield.

Subject to the Minimum Denomination, the Purchase Price per Authorised Denomination of Notes will equal (a) the value per Authorised Denomination of all remaining payments of principal and interest due to be made up to and including the maturity date of the Notes, discounted to the Settlement Date at a discount rate equal to the Repurchase Yield, minus (b) Accrued Interest, expressed as a percentage and rounded to three decimal places (with 0.0005 per cent. rounded upwards).

The calculation, where applicable, of the Reference Yield, Repurchase Yield, Purchase Price and Accrued Interest for the Notes will be made by the Offeror in its sole and absolute discretion and such calculations will be final and binding on the relevant Holders, absent manifest error.

Hypothetical Purchase Price (Illustrative only)

For illustrative purposes only, a hypothetical Purchase Price in respect of the Notes is set out in the table below which has been calculated on the basis of (i) the Fixed Spread specified in the table on the front page of the Tender Offer Memorandum and (ii) a hypothetical Reference Yield that was determined as at 1.00 p.m. (London time) on 2 August 2022, as set out in the table below, and assuming a Settlement Date of 16 August 2022. Holders should note that the actual Purchase Price in respect of the Notes determined in the manner described in the Tender Offer Memorandum could differ significantly from the hypothetical Purchase Price in respect of the Notes. See also the section entitled "Risk Factors and Other Considerations - Changes in Reference Yield." in the Tender Offer Memorandum.

 
 
   Hypothetical Reference     Hypothetical Purchase 
   Yield[3]                   Price[4] 
 
   1.680 per cent.            110.794 per cent. 
 

Acceptance of Offer

Any Notes purchased by the Offeror pursuant to the Offer will be cancelled and will not be re-issued or re-sold.

Holders of Notes who have validly tendered Notes and whose Notes have been accepted by the Offeror will receive the Purchase Price of the Notes, together with the Accrued Interest Payment (if any).

As soon as reasonably practicable after the Price Determination Time, the Offeror will publicly announce, in relation to the Notes, the final amount accepted for purchase, the Reference Yield, the Repurchase Yield and the Purchase Price.

As the Purchase Price for the Notes is based on the Repurchase Yield (which is calculated as the sum of the Reference Yield and the Fixed Spread), and the Reference Yield is based on the Reference Benchmark, the actual amount of cash that will be received by a Holder pursuant to the Offer will be affected by changes in the Reference Yield at or before the Price Determination Time. In the event of any dispute or controversy regarding the contents of the announcements made on the Price Determination Date, the Offeror's determination shall be conclusive and binding, absent manifest error.

Accrued Interest Payment

An amount equal to accrued and unpaid interest (if any) will also be paid as consideration in respect of all Notes validly tendered and accepted for purchase by the Offeror pursuant to the Offer from, and including, the immediately preceding interest payment date for the Notes to, but excluding, the Settlement Date.

Total Consideration

The total consideration payable to each Holder in respect of Notes validly submitted for tender and accepted for purchase by the Offeror will be an amount in cash equal to (i) the Purchase Price for the Notes, multiplied by the Authorised Denomination in aggregate nominal amount of Notes validly tendered and delivered by such Holder and accepted by the Offeror for purchase (rounded to the nearest GBP0.01, with GBP0.005 being rounded upwards) plus (ii) any Accrued Interest Payment payable in respect of the Notes.

General

Notes can only be tendered in the Offer in accordance with the procedures described in the section entitled "Procedures for Participating in the Offer" in the Tender Offer Memorandum. Any Notes purchased by the Offeror pursuant to the Offer will be cancelled and will not be re-issued or re-sold. Holders who do not participate in the Offer, or whose Notes are not accepted for purchase, will continue to hold their Notes.

INDICATIVE TIMETABLE

The following table sets out the expected dates and times of the key events relating to the Tender Offer. This is an indicative timetable and is subject to change.

 
Date and Time                      Action 
-------------------------------    ------------------------------------------------- 
3 August 2022                      Commencement of the Offer 
                                    Offer announced through RNS announcement, 
                                    the relevant Reuters International Insider 
                                    Screen, the Clearing Systems and by publication 
                                    on a Notifying News Service. 
                                    Tender Offer Memorandum available from 
                                    the Tender Agent (subject to the restrictions 
                                    set out in "Offer and Distribution Restrictions" 
                                    below). 
5.00 p.m. (London time)            Expiration Deadline 
 on                                 Deadline for receipt by the Tender Agent 
 11 August 2022                     of all Tender Instructions in order for 
                                    Holders to be able to participate in the 
                                    Offer and to be eligible to receive the 
                                    Purchase Price and any Accrued Interest 
                                    Payment on the Settlement Date. 
At or around 11.00 a.m.            Price Determination Time 
 (London time) on 12 August         Determination of the Reference Yield, 
 2022 (the "Price Determination     the Repurchase Yield and the Purchase 
 Date")                             Price. 
As soon as practicable             Announcement of Pricing, Acceptance and 
 after the Price Determination      Result of Offer 
 Time                               Announcement by the Offeror of whether 
                                    it will accept valid tenders of Notes 
                                    pursuant to the Offer and, if so, the 
                                    total amount accepted for purchase, the 
                                    Reference Yield, Repurchase Yield and 
                                    the Purchase Price. 
 
  Expected to be 16 August           Settlement Date 

  2022                               Expected Settlement Date for Notes validly 
                                     tendered and accepted by the Offeror. 
                                     Payment of the Purchase Price and any 
                                     Accrued Interest Payment. 
 

Subject to applicable securities laws and the terms set out within the Tender Offer Memorandum, the Offeror reserves the right, with respect to any or all of the Notes, (i) to waive or modify in whole or in part any and all conditions to the Offer, (ii) to extend the Expiration Deadline, (iii) to modify or terminate the Offer or (iv) to otherwise amend the Offer in any respect. In the event that the Offer is terminated or otherwise not completed, the Purchase Price relating to the Notes subject to the Offer will not be paid or become payable, without regard to whether Holders have validly tendered their Notes (in which case such tendered Notes will be unblocked by the relevant Clearing System).

Announcements in connection with the Offer will be made via RNS. Such announcements may also be made (i) on the relevant Reuters International Insider Screen, (ii) by the issue of a press release to a Notifying News Service and (iii) by the delivery of notices to the relevant Clearing Systems for communication to Direct Participants. Copies of all announcements, notices and press releases can also be obtained from the Tender Agent, the contact details for whom are specified below. Significant delays may be experienced where notices are delivered to the Clearing Systems and Holders are urged to contact the Tender Agent for the relevant announcements during the course of the Offer.

Institutional Holders may contact the Dealer Manager for information using the contact details specified below. Retail Holders may contact the Offeror for information using the contact details specified below.

In connection with the Offer:

"Institutional Holder" means a Holder (a) who holds GBP100,000 or more in aggregate nominal amount of the Notes, (b) whose ordinary activities involve that person buying, selling, subscribing for or underwriting instruments such as the Notes for the purposes of a business carried on by that person, and/or (c) who it is reasonable to expect will carry on the activities described in (b) above for the purposes of a business carried on by that person; and

"Retail Holder" means a Holder (a) who holds less than GBP100,000 in aggregate nominal amount of the Notes, (b) whose ordinary activities do not involve that person buying, selling, subscribing for or underwriting instruments such as the Notes for the purposes of a business carried on by that person, and (c) who it is reasonable to expect will not carry on the activities described in (b) above for the purposes of a business carried on by that person.

Holders are advised to check with any bank, securities broker, solicitor, accountant or other independent financial, tax, legal, accounting or other advisor such Holder deems necessary and/or any bank, securities broker or other Intermediary through which they hold Notes when such Intermediary would require to receive instructions from a Holder in order for that Holder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offer before the deadlines specified above. The deadlines set by any such Intermediary and each Clearing System for the submission of Tender Instructions will be earlier than the relevant deadlines specified above. See "Procedures for Participating in the Offer" in the Tender Offer Memorandum.

Tender Instructions will be irrevocable except in the limited circumstances described in "Amendment and Termination - Revocation Rights" in the Tender Offer Memorandum.

Before making a decision with respect to the Offer, Holders should carefully consider all of the information in the Tender Offer Memorandum and, in particular, the risk factors described in the section entitled "Risk Factors and Other Considerations" in the Tender Offer Memorandum.

FURTHER INFORMATION

Kroll Issuer Services Limited has been appointed by the Offeror as tender agent (the "Tender Agent") in connection with the Offer.

Lloyds Bank Corporate Markets plc has been appointed by the Offeror as Dealer Manager (the "Dealer Manager") for the purposes of the Offer.

This announcement contains inside information in relation to the Notes and is disclosed in accordance with the Market Abuse Regulation (EU) 596/2014 ("MAR"), as amended, as it forms part of English law by virtue of the European Union (Withdrawal) Act 2018. For the purposes of MAR, this announcement is made by Douglas Radcliffe, Group Investor Relations Director.

 
 Requests for information by Institutional Holders in relation 
               to the Offer should be directed to: 
                         DEALER MANAGER 
               Lloyds Bank Corporate Markets plc 
                        10 Gresham Street 
                         London EC2V 7AE 
                         United Kingdom 
 
                  Tel: [phone] / 3939 
              Attention: Liability Management Group 
        Email: [e-mail] 
 Requests for information by Retail Holders in relation to the 
                  Offer should be directed to: 
                             OFFEROR 
                        Lloyds Bank plc 
                        10 Gresham Street 
                         London EC2V 7AE 
                         United Kingdom 
 
                           Liz Padley 
   Non Bank Entities Treasurer & Head of Capital and Recovery 
                         and Resolution 
                    Tel: [phone] 
        Email: [e-mail] 
 
                          Pascale Dorey 
                     Debt Investor Relations 
                    Tel: [phone] 
             Email: [e-mail] 
 
                        Douglas Radcliffe 
                Group Investor Relations Director 
                 Telephone: [phone] 
           Email: [e-mail] 
 Requests for information in relation to, and for any documents 
  or materials relating to, the Offer should be directed to: 
                          TER AGENT 
                 Kroll Issuer Services Limited 
                            The Shard 
                     32 London Bridge Street 
                         London SE1 9SG 
                         United Kingdom 
 
                   Telephone: [phone] 
                    Attention: Arlind Bytyqi 
                 Email: [e-mail] 
         Website: https://deals.is.kroll.com/lloydsbank 
 

DISCLAIMER

This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Offer. If any Holder is in any doubt as to the action it should take or is unsure of the impact of the Offer, it is recommended to seek its own financial and legal advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent financial or legal adviser or any other advisors it deems necessary. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee or intermediary must contact such entity if it wishes to tender Notes in the Offer. None of the Offeror, the Dealer Manager or the Tender Agent (or any of their respective directors, officers, employees, agents or affiliates) is providing Holders with any legal, business, tax, investment or other advice in the Tender Offer Memorandum. Holders should consult with their own advisers as needed to assist them in making an investment decision and to advise them whether they are legally permitted to tender Notes for cash.

OFFER AND DISTRIBUTION RESTRICTIONS

Neither this announcement nor the Tender Offer Memorandum constitutes an offer or an invitation to participate in the Offer 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. The distribution of this announcement and the Tender Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and/or the Tender Offer Memorandum comes are required by each of the Offeror, the Dealer Manager and the Tender Agent to inform themselves about and to observe any such restrictions.

United States

The Offer is not being made and will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of, or of any facilities of a national securities exchange of, the United States or to any U.S. Person (as defined in Regulation S of the United States Securities Act of 1933, as amended (each, a "U.S. Person")). This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. Accordingly, copies of the Tender Offer Memorandum and any other documents or materials relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to a U.S. Person and the Notes cannot be tendered in the Offer by any such use, means, instrumentality or facility or from or within or by persons located or resident in the United States or by any U.S. Person. Any purported tender of Notes in the Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by a person located in the United States, a U.S. Person, by any person acting for the account or

benefit of a U.S. Person, or by any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.

Each holder of Notes participating in the Offer will represent that it is not a U.S. Person, is not located in the United States and is not participating in the Offer from the United States, or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in the Offer from the United States and who is not a U.S. Person. For the purposes of this and the above paragraph, "United States" means the United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.

United Kingdom

The communication of this announcement and the Tender Offer Memorandum by the Offeror and any other documents or materials relating to the Offer is not being made, and such documents and/or materials have not been approved, by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000 (the "FSMA"). Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials is exempt from the restriction on financial promotions under section 21 of the FSMA on the basis that it is only directed at and may be communicated to (1) those persons who are existing members or creditors of the Offeror or other persons within Article 43(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, and (2) to any other persons to whom these documents and/or materials may lawfully be communicated.

France

This announcement, the Tender Offer Memorandum and any other documents or offering materials relating to the Offer, may not be distributed (directly or indirectly) in the Republic of France except to qualified investors (investisseurs qualifiés) as defined in Article 2(e) of Regulation (EU) 2017/1129 (as amended). Neither the Tender Offer Memorandum nor any other documents or offering materials relating to the Offer have been and will not be submitted for clearance to nor approved by the Autorité des marchés financiers.

Italy

Neither the Offer, this announcement, the Tender Offer Memorandum nor any other documents or materials relating to the Offer have been or will be submitted to the clearance procedure of the Commissione Nazionale per le Società e la Borsa ("CONSOB") pursuant to Italian laws and regulations.

The Offer is being carried out in the Republic of Italy as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the "Financial Services Act") and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of 14 May 1999, as amended (the "Issuers' Regulation").

A holder of Notes located in the Republic of Italy can tender Notes through authorised persons (such as investment firms, banks or financial Intermediaries permitted to conduct such activities in the Republic of Italy in accordance with the Financial Services Act, CONSOB Regulation No. 20307 of 15 February 2018, as amended from time to time, and Legislative Decree No. 385 of 1 September, 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority.

Each Intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Notes or the Offer.

General

The Dealer Manager and the Tender Agent (and their respective directors, officers, employees, agents or affiliates) make no representations or recommendations whatsoever regarding this announcement, the Tender Offer Memorandum or the Offer. The Tender Agent is the agent of the Offeror and owes no duty to any Holder. None of the Offeror, the Dealer Manager, the Trustee or the Tender Agent (or any of their respective directors, officers, employees, agents or affiliates) makes any recommendation as to whether or not Holders should participate in the Offer.

Neither this announcement nor the Tender Offer Memorandum nor the electronic transmission thereof constitutes an offer to buy or the solicitation of an offer to sell Notes (and tenders of Notes in the Offer will not be accepted from Holders) in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer or similar and the Dealer Manager or any of their respective affiliates is such a licensed broker or dealer or similar in any such jurisdiction, the Offer shall be deemed to be made by the Dealer Manager or such affiliate, as the case may be, on behalf of the Offeror in such jurisdiction.

In addition to the representations referred to above in respect of the United States, the United Kingdom, France and Italy, each Holder participating in the Offer will also be deemed to give certain representations, acknowledgements, warranties and undertakings and make certain agreements in respect of the other jurisdictions referred to above and generally as set out in "Procedures for Participating in the Offer" in the Tender Offer Memorandum. Any tender of Notes for purchase pursuant to the Offer from a Holder that is unable to make these representations will not be accepted.

Each of the Offeror, the Dealer Manager and the Tender Agent reserves the right, in its sole and absolute discretion (and without prejudice to the relevant Holder's responsibility for the representations made by it), to investigate, in relation to any tender of Notes for purchase pursuant to the Offer, whether any such representation given by a Holder is correct and, if such investigation is undertaken and as a result the Offeror determines (for any reason) that such representation is not correct, such tender or submission may be rejected.

   [1]     Expressed on a semi-annual basis. 
   [2]     Expressed on a semi-annual basis. 
   [3]    Determined as at 1.00 p.m. (London time) on 2 August 2022 

[4] The actual Purchase Price that the Offeror will pay for any Notes validly tendered and accepted for purchase pursuant to the Offer will be determined in the manner described in the Tender Offer Memorandum on the basis of the Fixed Spread (specified above), the relevant Reference Yield (determined as at the Pricing Determination Time) and the Settlement Date.

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August 03, 2022 03:40 ET (07:40 GMT)