TIDMLLOY
RNS Number : 8784U
Lloyds Banking Group PLC
07 December 2021
DECEMBER 7, 2021
LLOYDS BANKING GROUP PLC ANNOUNCES PRICING TERMS FOR ITS
EXCHANGE OFFER
Lloyds Banking Group plc ("LBG") today announced the pricing
terms with respect to its offer to exchange Fixed Rate Reset
Subordinated Debt Securities due 2046 with a call date in 2041 (the
"New Notes"), to be issued by LBG, plus (if applicable) the
relevant Cash Consideration Amount (as set out in the table below),
plus accrued and unpaid dividends or interest (as the case may be)
in cash, plus cash amounts in lieu of any fractional New Notes (if
applicable), for:
(1) any and all of the outstanding American Depositary Shares ("ADSs") representing LBG's 6.413% Non-Cumulative Fixed to Floating Rate Preference Shares (the "Series 1 Preference Shares"), ADSs representing LBG's 6.657% Non-Cumulative Fixed to Floating Rate Preference Shares (the "Series 2 Preference Shares" and, collectively with the Series 1 Preference Shares, the "Preference Shares") and 6.00% Subordinated Notes due 2033 issued by HBOS plc (the "Series 1 Existing Subordinated Notes") (the "Any and All Offer"), and
(2) up to the Cap Amount (as defined below) of LBG's 4.582%
Subordinated Debt Securities due 2025 (the "Series 3 Existing
Subordinated Notes") and LBG's 4.500% Fixed Rate Subordinated Debt
Securities due 2024 (the "Series 2 Existing Subordinated Notes"
and, collectively with the Series 1 Existing Subordinated Notes and
the Series 3 Existing Subordinated Notes, the "Existing
Subordinated Notes") (the "Capped Offer" and, together with the Any
and All Offer, the "Exchange Offer").
The Series 1 Existing Subordinated Notes and the Preference
Shares are collectively referred to as the "Any and All Offer
Securities". The Series 2 Existing Subordinated Notes and the
Series 3 Existing Subordinated Notes are collectively referred to
as the "Capped Offer Notes". The Preference Shares and the Existing
Subordinated Notes are collectively referred to as the "Existing
Securities". The Exchange Offer is being made on the terms and
subject to the conditions set out in the prospectus dated November
10, 2021, as it may be amended or supplemented from time to time
(the "Prospectus"). Capitalized terms not otherwise defined in this
announcement have the same meaning as assigned to them in the
Prospectus.
For each $1,000 principal amount of Existing Securities validly
tendered and not validly withdrawn prior to 11:59 p.m., New York
City time, on December 9, 2021 (the "Expiration Deadline") and
accepted by LBG, the following table sets forth the exchange yield,
the Total Exchange Consideration (consisting of a principal amount
of New Notes equal to the applicable New Notes Exchange
Consideration plus an amount in cash equal to the relevant Cash
Consideration Amount), New Notes Exchange Consideration and the
Cash Consideration Amount.
New Notes Total
Reference Exchange Exchange Cash Exchange
Exchange UST Fixed Spread Yield Consideration Consideration Consideration
Title of Security Issuer ISIN/CUSIP Priority(1) Security (basis points) (2) (4) Amount (4) (3)(4)
-------------------------------- ------- ------------- ------------ ---------- -------------- -------- ------------- ------------- -------------
Any and All Offer
144A:
US539439AC38
/ 539439AC3
Reg S:
USG5533WAA56 1.250% U.S. Treasury Notes due August 15,
LBG / G5533WAA5 N/A 2031 +107 2.509% $1,306.88 $1,452.88
ADSs representing 6.413%
Non-Cumulative Fixed to Floating Rate Preference Shares....... $146.00
144A: 1.750%
US539439AF68 U.S.
ADSs representing 6.657% / 539439AF6 Treasury
Non-Cumulative Fixed to Reg S: Notes due
Floating Rate Preference US539439AE93 August
Shares....... LBG / 539439AE9 N/A 15, 2041 +83 2.699% $1,386.95 $110.00 $1,496.95
144A:
US4041A2AF14 1.250%
/ U.S.
4041A2AF1 Treasury
Reg S: Notes due
6.00% Subordinated Notes due HBOS US4041A3AG79 August
2033.......... plc / 4041A3AG7 N/A 15, 2031 +100 2.439% $1,220.34 $145.00 $1,365.34
Capped Offer
4.500% Fixed Rate Subordinated LBG US53944YAA10 1 0.750% +50 1.447% $1,086.06 $0.00 $1,086.06
Debt Securities due 2024.... / 53944YAA1 U.S.
Treasury
Notes due
November
15, 2024
4.582% Subordinated Debt LBG US539439AM10 2 1.125% +50 1.739% $1,109.10 $0.00 $1,109.10
Securities due / 539439AM1 U.S.
2025........................... Treasury
Notes due
October
31, 2026
(1) The aggregate principal amount of the Capped Offer Notes of
each series that are accepted for exchange pursuant to the Capped
Offer will be based on the order of Exchange Priority for such
series as set forth in the table above, subject to the Cap Amount
and proration arrangements applicable to the Capped Offer.
(2) Reflects the bid-side yield of the applicable Reference UST
Security as of 10:00 a.m. New York City time on December 7, 2021,
plus the applicable Fixed Spread, calculated in accordance with the
procedures set forth in the Prospectus.
(3) In addition to the applicable Total Exchange Consideration,
LBG will pay accrued and unpaid dividends (in the case of the
Preference Shares) or interest (in the case of Existing
Subordinated Notes) up to, but not including, the Settlement
Date.
(4) Total Exchange Consideration and New Notes Exchange
Consideration are per $1,000 principal amount of Existing
Securities accepted for exchange pursuant to the Exchange Offer.
The Total Exchange Consideration includes both the Cash
Consideration Amount and the New Notes Exchange Consideration.
New Notes
New Notes Spread Optional
Title of Benchmark Interest to Benchmark Redemption Maturity Reset Reset Issue
Series Security Rate(1) Security Date Date Coupon Date Price
------------- ------------- ----------- ------------- --------------- --------- ------------ -------- ------
3.369% Fixed
Rate Reset
Subordinated From (and
Debt including)
Securities 1.750% September
due 2046 U.S. 14, 2041
with Treasury to (and 5-year
a call date Notes due including) US Treasury December
in 2041 August December December Rate 14,
.......... 15, 2041 3.369% +150 bps 14, 2041 14, 2046 +1.50% 2041 100%
(1) The New Notes Interest Rate is based on the bid-side yield
of the Benchmark Security, as of 10:00 a.m. New York City time on
December 7, 2021, plus the Spread to Benchmark Security, calculated
in accordance with the procedures set forth in the Prospectus.
The aggregate principal amount of the Capped Offer Notes of each
series that are accepted for exchange will be based on the order of
Exchange Priority for such series as set forth in the table above,
subject to the Cap Amount and proration arrangements applicable to
the Capped Offer. The Cap Amount is a principal amount of Capped
Offer Notes that would result in a principal amount of $750,000,000
of the New Notes (the "Maximum Capped Offer New Notes Size") being
issued pursuant to the Exchange Offer (after taking into account
the principal amount of the New Notes to be issued pursuant to the
Any and All Offer). In case the principal amount of the Any and All
Offer Securities accepted pursuant to the Any and All Offer is such
that the principal amount of the New Notes to be issued pursuant to
the Any and All Offer is equal to or exceeds $750,000,000, all
validly tendered Any and All Offer Securities will be accepted in
full and no Capped Offer Notes will be accepted pursuant to the
Capped Offer.
In addition to the applicable Total Exchange Consideration
specified in the table above, holders of Existing Securities that
are accepted for exchange will receive a cash payment representing
(i) the accrued and unpaid dividends (in the case of the Preference
Shares) or interest (in the case of Existing Subordinated Notes)
to, but not including, the Settlement Date, and (ii) amounts due in
lieu of any fractional amounts of New Notes, in each case, as
described in the Prospectus.
Minimum New Issue Size
The Exchange Offer is subject to a minimum new issue size of at
least $500,000,000 in aggregate principal amount
of New Notes being issued in exchange for Existing Securities
validly tendered pursuant to the Exchange Offer and
not withdrawn (the "Minimum New Issue Size") and certain other
conditions set out under the heading "The
Exchange Offer-Terms of the Exchange Offer-Exchange Offer
Conditions " in the Prospectus.
Indicative Timetable
The following table sets out the expected dates and times of the
key events relating to the Exchange Offer. This is an indicative
timetable and is subject to change.
Events Dates and Times
--------------------------------------- --------------------------------
Withdrawal Deadline
The deadline for holders to 11:59 p.m., New York City time,
validly withdraw tenders of on December 9, 2021
Existing Securities.
Expiration Deadline
The deadline for receipt of 11:59 p.m., New York City time,
all Exchange Instructions. on December 9 , 2021
Announcement of Exchange Offer
Results
Announcement of (i) the aggregate December 10, 2021
principal amounts of each series
of Existing Securities which
LBG will be accepting for exchange;
(ii) in the case of the Capped
Offer, whether tenders of each
series of Capped Offer Securities
are to be accepted in full (if
at all) or on a pro rata basis
and, where accepted on a pro
rata basis, the extent to which
such tenders will be scaled;
(iii) the aggregate principal
amount of New Notes to be issued
in the Exchange Offer; and (iv)
the Settlement Date.
Settlement Date
Settlement Date of the Exchange Expected on December 1 4 , 2021
Offer, including delivery of
the New Notes plus the cash
payment for any Cash Consideration
Amount (where applicable), any
accrued and unpaid dividend
(in the case of the Preference
Shares) or interest (in the
case of the Existing Subordinated
Notes), and including, if applicable,
cash amounts in lieu of any
fractional New Notes in exchange
for Existing Securities accepted
in the Exchange Offer.
The above dates and times are subject, where applicable, to the
right of LBG to extend, amend and/or terminate the Exchange Offer,
subject to applicable laws.
Holders of Existing Securities are advised to check with any
bank, securities broker or other intermediary through which they
hold Existing Securities when such intermediary would require to
receive instructions from a holder in order for that holder to be
able to participate in the Exchange Offer.
Holders of Existing Securities are advised to carefully read the
Prospectus for full details and information on the procedures for
participating in the Exchange Offer.
Further Information
A registration statement on Form F-4 (including the Prospectus
contained therein) relating to the Exchange Offer has been filed
with the SEC, but has not yet become effective. The New Notes may
not be issued in exchange for the Existing Securities prior to the
time the registration statement becomes effective. Consummation of
the Exchange Offer is subject to a number of conditions as set
forth in the Prospectus included in the registration statement,
including among other things, the registration statement of which
the Prospectus forms part having been declared effective by the SEC
and remaining effective on the settlement date.
Requests for copies of the Prospectus and information in
relation to the procedures for tendering Existing Securities in,
and for any documents relating to, the Exchange Offer should be
directed to:
EXCHANGE AGENT
Lucid Issuer Services Limited
The Shard
32 London Bridge Street
London SE1 9SG
United Kingdom
Tel: +44 207 704 0880
Attention: Owen Morris /
David Shilson
email: lbg@lucid-is.com
Website: https://deals.lucid-is.com/lbg-us
Any questions regarding the terms of the Exchange Offer should
be directed to:
GLOBAL COORDINATORS AND JOINT LEAD DEALER MANAGERS (the "Dealer
Managers")
BofA Securities, Inc. Credit Suisse Securities Lloyds Securities Inc .
620 South Tryon Street, (USA) LLC 1095 Avenue of the Americas
20th Floor 11 Madison Avenue New York, NY 10036
Charlotte, North Carolina New York, New York 10010
28255 Attention: Bond Syndicate
Attn: Liability Management Telephone (U.S.): +1 (212)
Group 827-3145
Attention: Liability Management Tel (London): +44 20 7883 Email: NALSIBondSyndicate@lbusa.com
Group 8763
Telephone (London): +44-20-7996-5420 Tel (US): +1 (212) 538-2147
Telephone (U.S. Toll Free): Tel (US toll free): +1
+1 (888) 292-0070 (800) 820-1653
Telephone (U.S.): +1 (980) Email:
387-3907 liability.management@credit-suisse.com
Email: DG.LM-EMEA@bofa.com
DISCLAIMER
This announcement must be read in conjunction with the
Prospectus. This announcement and the Prospectus contain important
information which should be read carefully before any decision is
made with respect to the Exchange Offer. If you are in any doubt as
to the contents of this announcement or the Prospectus or the
action you should take, you are recommended to seek your own
financial and legal advice, including as to any tax consequences,
immediately from your stockbroker, bank manager, solicitor,
accountant or other independent financial or legal adviser. Any
individual or company whose Existing Securities 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
participate in the Offers. None of the LBG, Dealer Managers or the
Exchange Agent makes any recommendation as to whether holders
should offer Existing Securities for exchange pursuant to the
Exchange Offer.
OFFER RESTRICTIONS
This announcement and the Prospectus do not constitute an offer
or an invitation to participate in the Exchange Offer in any
jurisdiction in or from which, or to any person to whom, it is
unlawful to make the relevant offer or invitation under applicable
laws. The distribution of this announcement and the Prospectus in
certain jurisdictions may be restricted by law. Persons into whose
possession this announcement and the Prospectus comes are required
by each of LBG, the Dealer Managers and the Exchange Agent to
inform themselves about, and to observe, any such restrictions.
No action has been or will be taken by LBG, the Dealer Managers
or the Exchange Agent in any jurisdiction outside the United States
that would constitute a public offering of the New Notes.
United Kingdom
The communication of the Prospectus and any other documents or
materials relating to the Exchange Offer is not being made, and
such documents and/or materials have not been approved, by an
authorized person for the purposes of section 21 of 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 Group or other persons within Article
43 of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, and (2) any other persons to whom these
documents and/or materials may lawfully be communicated.
Belgium
None of this announcement, the Prospectus or any other documents
or materials relating to the Exchange Offer have been submitted to
or will be submitted for approval or recognition to the Financial
Services and Markets Authority (Autorité des services et marchés
financiers / Autoriteit voor financiële diensten en markten) and,
accordingly, the Exchange Offer may not be made in Belgium by way
of a public offering, as defined in Articles 3 and 6 of the Belgian
Law of April 1, 2007 on public takeover bids as amended or replaced
from time to time. Accordingly, the Exchange Offer may not be
advertised, and none of this announcement, the Prospectus or any
other documents or materials relating to the Exchange Offer
(including any memorandum, information circular, brochure or any
similar documents) has been or shall be distributed or made
available, directly or indirectly, to any person in Belgium unless
such person is (i) a "qualified investor" in the sense of Article
2(e) of the Prospectus Regulation, acting on its own account, which
(ii) is not a consumer (consommateur/consument) within the meaning
of the Belgian Code of Economic Law (Code de droit
économique/Wetboek van economisch recht), as amended. The
Prospectus has been issued only for the personal use of the above
qualified investors and exclusively for the purpose of the Exchange
Offer. Accordingly, the information contained in this
announcement and the Prospectus may not be used for any other
purpose or disclosed to any other person in Belgium.
France
This announcement, the Prospectus and any other documents or
offering materials relating to the Exchange Offer may not be
distributed in the Republic of France except to qualified investors
(investisseurs qualifiés) as defined in Article 2(e) of the
Prospectus Regulation. This announcement and the Prospectus have
not been and will not be submitted for clearance to the Autorité
des marchés financiers.
Republic of Italy
The Exchange Offer and any solicitation in respect thereof are
not being made, directly or indirectly, in or into the Republic of
Italy and have not received clearance from the Commissione
Nazionale per le Societa e la Borsa (CONSOB) pursuant to Italian
securities laws and implementing regulations. Accordingly, Italian
holders of the Existing Securities are hereby notified that, to the
extent such holders of Existing Securities are persons or entities
resident and/or located in the Republic of Italy, the Exchange
Offer is not available to them and they may not accept the Exchange
Offer and, as such, any tenders of Existing Securities received
from such persons or entities shall be ineffective and void. None
of the Exchange Offer, this announcement, the Prospectus or any
other documents or materials relating to the Exchange Offer has
been registered pursuant to Italian securities legislation and,
accordingly, no New Notes may be offered, sold, delivered or
exchanged, nor may copies of the Prospectus or of any other
document relating to the New Notes and the Exchange Offer be
distributed or made available in the Republic of Italy.
Canada
The Exchange Offer and any solicitation in respect thereof, and
the sale of the New Notes, are not being made, directly or
indirectly, in Canada or to holders of the Existing Securities who
are resident and/or located in any province or territory of Canada.
The Prospectus has not been filed with any securities commission or
similar regulatory authority in Canada in connection with the
Exchange Offer, and the New Notes have not been, and will not be,
qualified for sale under the securities laws of Canada or any
province or territory thereof and no securities commission or
similar regulatory authority in Canada has reviewed or in any way
passed upon the Prospectus, any other documents or materials
relating to the Exchange Offer or the merits of the New Notes and
any representation to the contrary is an offence. Accordingly,
Canadian holders of the Existing Securities are hereby notified
that, to the extent such holders of Existing Securities are persons
or entities resident and/or located in Canada, the Exchange Offer
is not available to them and they may not accept the Exchange
Offer. As such, any tenders of Existing Securities received from
such persons or entities shall be ineffective and void. No New
Notes may be offered, sold, delivered or exchanged, nor may copies
of the Prospectus or of any other document relating to the New
Notes and the Exchange Offer be distributed or made available in
Canada. The Prospectus and any other documents or offering
materials relating to the Exchange Offer or the New Notes may not
be distributed in Canada and the Prospectus does not constitute an
offer or an invitation to participate in the Exchange Offer to any
person resident in Canada.
General
The Exchange Offer does not constitute an offer to buy or the
solicitation of an offer to sell Existing Securities and/or New
Notes in any circumstances in which such offer or solicitation is
unlawful. In those jurisdictions where the securities or other laws
require the Exchange Offer to be made by a licensed broker or
dealer or registered dealer and the Dealer Manager or, where the
context so requires, any of its affiliates is such a licensed
broker or dealer or registered dealer in that jurisdiction, the
Exchange Offer shall be deemed to be made on behalf of LBG by such
Dealer Manager or affiliate (as the case may be) in such
jurisdiction.
Each holder of Existing Securities participating in the Exchange
Offer will be deemed to give certain representations in respect of
the jurisdictions referred to above and generally as set out in
"The Exchange Offer-Certain Matters Relating to Non-U.S.
Jurisdictions" in the Prospectus. Any tender of Existing Securities
for exchange pursuant to the Exchange Offer from a holder that is
unable to make these representations may be rejected. LBG, the
Dealer Managers and the Exchange Agent reserve the right, in their
absolute discretion, to investigate, in relation to any tender of
Existing Securities for exchange pursuant to the Exchange Offer,
whether any such representation given by a holder is correct and,
if such investigation is undertaken and as a result LBG determines,
as the case may be, (for any reason) that such representation is
not correct, such tender may be rejected.
Further Information
This announcement contains inside information in relation to the
Existing Securities and is disclosed in accordance with the Market
Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").
For the purposes of UK MAR and Article 2 of the binding technical
standards published by the Financial Conduct Authority in relation
to UK MAR as regards Commission Implementing Regulation (EU)
2016/1055, this announcement is made by Douglas Radcliffe, Group
Investor Relations Director.
For further information please contact:
Group Corporate Treasury:
Liz Padley
Head of Capital Structuring, Holding Company and Resolution
Telephone: +44 (0)20 7158 1737
Email: Claire-Elizabeth.Padley@LloydsBanking.com
Investor Relations:
Douglas Radcliffe
Group Investor Relations Director
Telephone: +44 (0)20 7356 1571
Email: Douglas.Radcliffe@LloydsBanking.com
Corporate Affairs:
Matthew Smith
Head of Media Relations
Tel: +44 (0)20 7356 3522
Email: matt.smith@lloydsbanking.com
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December 07, 2021 11:07 ET (16:07 GMT)
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