Lloyds Banking Group PLC Tender Offer on Certain Euro & Sterling Securties
January 29 2016 - 9:06AM
Dow Jones News
TIDMLLOY
RNS Number : 4888N
Lloyds Banking Group PLC
29 January 2016
29 January 2016
NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR
RESIDENT IN THE UNITED STATES, 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 OR THE DISTRICT OF COLUMBIA (THE "UNITED STATES")
OR TO ANY U.S. PERSON.
(SEE "OFFER AND DISTRIBUTION RESTRICTIONS" BELOW)
LBG CAPITAL NO.1 PLC AND LBG CAPITAL NO. 2 PLC LAUNCH CASH
TENDER OFFERS ON CERTAIN EURO AND STERLING SECURITIES
On the terms of and subject to the conditions contained in a
tender offer memorandum dated 29 January 2016 (the "Tender Offer
Memorandum"):
(i) LBG Capital No. 1 plc ("LBG 1") has today invited Holders of
certain of its euro and sterling denominated Enhanced Capital Notes
(the "LBG 1 Existing Notes") to tender any and all of their LBG 1
Existing Notes for purchase by LBG 1 for cash (the "LBG 1 Offers");
and
(ii) LBG Capital No. 2 plc ("LBG 2" and, together with LBG 1,
the "Offerors" and each an "Offeror") has today invited Holders of
certain of its euro and sterling denominated Enhanced Capital Notes
(the "LBG 2 Existing Notes" and together with the LBG 1 Existing
Notes, the "Existing Notes") to tender any and all of their LBG 2
Existing Notes for purchase by LBG 2 for cash (the "LBG 2 Offers"
and, together with the LBG 1 Offers, the "Offers").
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.
THE OFFERS
The Offerors invite Holders of the Existing Notes to tender any
and all of their Existing Notes (subject to the Offer and
Distribution Restrictions contained herein) for purchase at the
relevant Purchase Price set out in the table below plus an Accrued
Interest Payment (if any).
Principal Make
Title ISIN Amount Reference Whole
of Security Issuer Number Outstanding Benchmark Premium Purchase Price
---------------- -------- -------------- --------------- --------------- --------- ---------------
EUR486,527,000 The sum of
15.000 3.75 per the relevant
per cent. cent. German Make Whole
Enhanced Government Premium and
Capital Bonds due the relevant
Notes January Make Whole
due December LBG 2019 (ISIN: Redemption
2019 2 XS0459089412 EUR486,527,000 DE0001135374) 2 % Price
EUR125,330,000 LBG XS0459087986 EUR125,330,000 N/A N/A EUR1,020 per
8.875 2 EUR1,000 in
per cent. aggregate
Enhanced principal
Capital amount
Notes
due February
2020
EUR53,040,000 LBG XS0459090931 EUR53,040,000 N/A N/A EUR1,020 per
Floating 1 EUR1,000 in
Rate Enhanced aggregate
Capital principal
Notes amount
due March
2020
EUR94,737,000 LBG XS0459090774 EUR94,737,000 N/A N/A EUR1,020 per
7.375 1 EUR1,000 in
per cent. aggregate
Enhanced principal
Capital amount
Notes
due March
2020
EUR661,955,000 LBG XS0459088794 EUR614,113,000 N/A N/A EUR1,020 per
6.385 2 EUR1,000 in
per cent. aggregate
Enhanced principal
Capital amount
Notes
due May
2020
EUR226,172,000 LBG XS0459091236 EUR226,172,000 N/A N/A EUR1,020 per
7.625 1 EUR1,000 in
per cent. aggregate
Enhanced principal
Capital amount
Notes
due October
2020
GBP775,158,000 LBG XS0459089255 GBP703,465,000 4.75 per 2 % The sum of
15.000 2 cent. UK the relevant
per cent. treasury Make Whole
Enhanced Stock due Premium and
Capital March 2020 the relevant
Notes (ISIN: Make Whole
due December GB00B058DQ55) Redemption
2019 Price
GBP67,853,000 LBG XS0459089685 GBP67,853,000 6.00 per 2 % The sum of
15.000 2 cent. UK the relevant
per cent. treasury Make Whole
Enhanced Stock due Premium and
Capital December the relevant
Notes 2028 (ISIN: Make Whole
due January GB0002404191) Redemption
2029 Price
Rationale for the Offers
Background to the Offers
In 2009, the Group undertook a significant capital raising
exercise which included the issuance of approximately GBP8.4
billion of ECNs. Approximately GBP3.3 billion in aggregate
principal amount of these ECNs remain outstanding as at the date of
the Tender Offer Memorandum.
The ECNs were issued for the purpose of counting as "stress
test" core capital of the Group. Pursuant to the relevant
Conditions, should any series of ECNs cease to be taken into
account for the purposes of any "stress test" applied by the PRA in
the circumstances more fully described in Condition 8(e) of the
Existing Notes, the issuer of the relevant series of Existing Notes
has the ability to exercise the Regulatory Call Right.
The ECNs were not taken into account as core capital for the
most recent PRA stress tests, the results of which were published
on 16 December 2014 and 1 December 2015. As confirmed by the Civil
Division of the English Court of Appeal on 10 December 2015, a
Capital Disqualification Event has occurred and the Regulatory Call
Right is available to each of the issuers of the ECNs. The ECN
trustee has sought permission to appeal from the Supreme Court of
the United Kingdom.
Offers
The Group is today launching the Offers (outside the United
States of America), as well as a global offer (including into the
United States of America) in relation to two further series of U.S.
dollar-denominated ECNs (together with the Offers, the "Tender
Offers"). The Tender Offers provide eligible holders of the
relevant series of ECNs with a means to tender their ECNs at a
price which, in the case of the Fixed Price Existing Notes is, and
in the case of the Make Whole Existing Notes is expected to be,
higher than the contractual redemption price at which the relevant
issuer of the ECNs is entitled to redeem such ECNs upon an exercise
of the Regulatory Call Right.
Redemption
The issuers of the ECNs have today given redemption notices in
respect of certain series of ECNs which are not the subject of the
Tender Offers and which were prioritised for redemption following
the liability management exercise conducted in 2014. Those
redemptions are scheduled to occur on 9 February 2016.
(MORE TO FOLLOW) Dow Jones Newswires
January 29, 2016 08:51 ET (13:51 GMT)
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