7th Jan 2009 09:45
NOT FOR DISTRIBUTION TO ANY US PERSON OR IN OR INTO THE UNITED STATES, OR TO AN PERSON LOCATED OR RESIDENT IN THE REPUBLIC OF ITALY
(SEE "OFFER RESTRICTIONS" BELOW)
7 January 2009
LLOYDS TSB BANK PLC ANNOUNCES INVITATION TO EXCHANGE EXISTING STERLING AND EURO UPPER TIER 2 SECURITIES FORNEW INNOVATIVE TIER 1 CAPITAL SECURITIES
Lloyds TSB Bank plc (the "Issuer") has today invited all holders ("Holders") (subject to certain offer restrictions set out in the Exchange Offer Memorandum (as defined below)) to Offer to Exchange any or all of their Existing Notes, in accordance with the relevant Exchange Priority, for New Capital Securities (the "Exchange Offer"). The Exchange Offer is made on the terms and subject to the conditions set out in the Exchange Offer Memorandum dated 7 January 2009 (the "Exchange Offer Memorandum"). The New Capital Securities are intended to qualify as Innovative Tier 1 Capital of the Issuer. The purpose of the Exchange Offer is to create additional Tier 1 capital in the capital structure of the Lloyds TSB Group in order to improve and strengthen its capital base.
The Existing Notes and New Capital Securities
The Existing Notes (which comprise Upper Tier 2 capital of the relevant issuer) and the New Capital Securities, are comprised as follows:
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Amt.
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New Capital Securities
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Exchange
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Coupon
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O/S
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Call
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Issuer: Lloyds TSB Bank
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Priority
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Cur.
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Issuer
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Ratings
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(%)
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(m)
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date
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ISIN
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Capital: Innovative Tier 1
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1
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GBP
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HBOS
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Aa3/BBB+/AA-
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7.50
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300.0
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26-May-16
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XS0111599311
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2
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GBP
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HBOS
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Aa3/BBB+/AA-
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5.625
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500.0
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15-Nov-19
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XS0205326290
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3*
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GBP
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HBOS
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Aa3/BBB+/AA-
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5.75
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600.0
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14-Apr-22
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XS0166717388
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New Series A Sterling Capital Securities
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4
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GBP
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Bank of Scotland
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Aa2/A-/AA-
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8.625
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200.0
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04-Nov-13
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XS0046690961
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Currency: GBP
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5
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GBP
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Bank of Scotland
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Aa2/A-/AA-
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10.25
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100.0
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10-Aug-15
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XS0059171230
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Tenor: Perpetual-NC-10yr
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6*
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GBP
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Bank of Scotland
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Aa2/A-/AA-
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7.375
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150.0
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10-Feb-23
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XS0083932144
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Minimum New Issue Amount: £300.0m
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7
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GBP
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Lloyds TSB Bank
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Aa1/A+/AA
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6.625
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410.0
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15-Jul-10
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XS0099508698
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Expected Ratings: Aa2/A+
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8
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GBP
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Lloyds TSB Bank
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Aa1/A+/AA
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5.125
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500.0
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09-Dec-16
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XS0169667119
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9
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GBP
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Lloyds TSB Bank
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Aa1/A+/AA
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6.50
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270.0
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15-Jul-19
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XS0099507534
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10*
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GBP
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Lloyds TSB Bank
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Aa1/A+/AA
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8.00
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200.0
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29-Sep-23
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XS0079927850
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Sub-total (m)
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£3,230.0
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1*
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GBP
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HBOS
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Aa3/BBB+/AA-
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5.75
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600.0
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14-Apr-22
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XS0166717388
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New Series B Sterling Capital Securities
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2
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GBP
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HBOS
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Aa3/BBB+/AA-
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5.75
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500.0
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28-Nov-25
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XS0158313758
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Currency: GBP
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3*
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GBP
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Bank of Scotland
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Aa2/A-/AA-
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7.375
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150.0
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10-Feb-23
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XS0083932144
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Tenor: Perpetual-NC-20yr
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4*
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GBP
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Lloyds TSB Bank
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Aa1/A+/AA
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8.00
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200.0
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29-Sep-23
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XS0079927850
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Minimum New Issue Amount: £300.0m
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5
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GBP
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Lloyds TSB Bank
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Aa1/A+/AA
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6.50
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450.0
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15-Jul-29
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XS0099507963
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Expected Ratings: Aa2/A+
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6
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GBP
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Lloyds TSB Group
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Aa1/A+/AA
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6.00
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500.0
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07-Jun-32
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XS0145407507
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Sub-total (m)
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£2,400.0
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1
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EUR
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HBOS
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Aa3/BBB+/AA-
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L+120
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300.0
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26-Aug-10
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XS0111627112
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2
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EUR
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HBOS
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Aa3/BBB+/AA-
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6.05
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500.0
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23-Nov-11
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XS0138988042
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New Euro Capital Securities
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3
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EUR
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HBOS
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Aa3/BBB+/AA-
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L+60
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500.0
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13-Mar-14
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XS0188201619
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Currency: EUR
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4
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EUR
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HBOS
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Aa3/BBB+/AA-
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4.875
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750.0
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13-Mar-14
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XS0188201536
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Tenor: Perpetual-NC-10yr
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5
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EUR
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HBOS
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Aa3/BBB+/AA-
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5.125
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750.0
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14-Oct-15
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XS0177955381
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Minimum New Issue Amount: €300.0m
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6
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EUR
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Lloyds TSB Bank
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Aa1/A+/AA
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5.625
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1,250.0
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15-Jul-09
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XS0099859059
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Expected Ratings: Aa2/A+
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7
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EUR
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Lloyds TSB Bank
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Aa1/A+/AA
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L+95
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150.0
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19-Jul-09
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XS0099509316
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Sub-total (m)
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€4,200.0
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GBP Total (m)
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£4,680.0
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EUR Total (m)
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€4,200.0
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Total GBP equiv (m)
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£8,523.0
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(Securities marked with a * may, at the option of the relevant Holder, be Offered for Exchange for New Series A Sterling Capital Securities and/or New Series B Sterling Capital Securities)
The Exchange Offer is conditional upon the aggregate principal amount of each series of New Capital Securities to be issued by the Issuer being not less than:
(i) £300,000,000 in respect of the New Series A Sterling Capital Securities;
(ii) £300,000,000 in respect of the New Series B Sterling Capital Securities; and
(iii) €300,000,000 in respect of the New Euro Capital Securities,
(each, a "Minimum New Issue Amount").
Additionally, the Exchange Offer is conditional upon the proposed acquisition by Lloyds TSB Group plc of HBOS plc (expected to be completed on or around 16 January 2009) becoming Effective.
The aggregate principal amount of each series of New Capital Securities to be issued by the Issuer pursuant to the Exchange Offer in exchange for the relevant Series of Existing Notes (each a "New Issue Amount") will be determined by the Issuer following the expiration of the Exchange Offer Period in its sole and absolute discretion, subject to such amount being not less than the relevant Minimum New Issue Amount, and is intended to be announced by the Issuer by 10.00 a.m., London time, on 19 January 2009.
Holders wishing to participate in the Exchange Offer must submit, or arrange to have submitted on their behalf, not later than 4.00 p.m., London time, on 16 January 2009, a duly completed Electronic Instruction Notice, as further described in the Exchange Offer Memorandum.
Holders who validly Offer to Exchange their Existing Notes will, if their Offer to Exchange is accepted by the Issuer without any pro rata adjustments, receive relevant New Capital Securities in a principal amount (rounded down to the nearest £1,000 or €1,000, as applicable) equal to the product of the aggregate principal amount of such Existing Notes multiplied by the relevant Exchange Ratio, which, in respect of each Series of Existing Notes, is the ratio (rounded down to six decimal places) calculated by dividing the relevant Exchange Price by the relevant New Capital Securities Price. The Issuer intends to announce (i) the Exchange Price for each Series of Existing Notes; (ii) the New Capital Securities Price and the New Capital Securities Coupon for each series of the New Capital Securities; and (iii) the Exchange Ratio for each Series of Existing Notes and relevant series of New Capital Securities at or around 3.00 p.m., London time, on 13 January 2009. Each New Capital Securities Price and New Capital Securities Coupon will be calculated in accordance with market convention and the New Capital Securities Prices will be as close as possible to 100 per cent. of the principal amount of the New Capital Securities, allowing for rounding down of the New Capital Securities Coupons to the nearest 0.125 per cent in accordance with market convention.
Exchange Priority and Pro-ration
In the event that the Issuer accepts Existing Notes validly Offered for Exchange, it intends to do so in accordance with the relevant Exchange Priority set out above and as further described in the Exchange Offer Memorandum. Where the acceptance in accordance with the relevant Exchange Priority of all valid Offers to Exchange of a Series of Existing Notes would require a greater aggregate principal amount of the relevant series of New Capital Securities to be issued than the relevant New Issue Amount, in the case of that particular Series the Issuer will accept such Offers to Exchange on a pro rata basis. A separate Exchange Priority shall apply to each series of New Capital Securities.
Each Exchange Priority has been structured based on the following criteria:
No Offer to Exchange Existing Notes will be accepted by the Issuer unless such Offer to Exchange relates to a sufficient principal amount of Existing Notes to entitle the relevant Holder to be eligible to receive, in accordance with the terms of the Exchange Offer, a principal amount of New Capital Securities at least equal to £100,000, in the case of the New Sterling Capital Securities, or €50,000, in the case of the New Euro Capital Securities. A cash amount in either sterling or euro (as the case may be) will be paid, or procured to be paid, by the Issuer on the Settlement Date to each relevant Holder equal to (i) the Accrued Interest Payment and (ii) the Cash Rounding Amount (if applicable) which arises as a result of the application of the relevant Exchange Ratio.
Expected Timetable
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Events |
Dates and Times (London time) |
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Commencement of the Exchange Offer Period |
7 January 2009 |
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Pricing Announcement Date and Time |
At or around 3.00 p.m., on 13 January 2009 |
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Expiration Date and Time |
4.00 p.m., on 16 January 2009 |
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Announcement of Exchange Offer Results |
By 10.00 a.m., on 19 January 2009 |
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Settlement Date |
Expected on 21 January 2009 |
Holders are advised to check with the bank, securities broker, Clearing System or other Intermediary through which they hold their Existing Notes whether such Intermediary applies different deadlines for any of the events specified above, and then to allow for such deadlines if such deadlines are prior to those set out above.
The Exchange Offer is made on the terms and subject to the conditions as further described in the Exchange Offer Memorandum dated 7 January 2009 (the "Exchange Offer Memorandum").
Eligible holders of the Existing Notes are advised to read carefully the Exchange Offer Memorandum for full details of and information on the procedures for participating in the Exchange Offer.
Subject to applicable law and as provided in the Exchange Offer Memorandum, the Issuer may, in its sole discretion, extend, re-open, amend, waive any condition of or terminate the Exchange Offer at any time.
The Exchange Offer is not being made in the United States or Italy or to any U.S. person or to any person located or resident in Italy and is also restricted in other jurisdictions, as more fully described below and in the Exchange Offer Memorandum.
Capitalised terms used and not otherwise defined in this announcement have the meaning given in the Exchange Offer Memorandum.
Requests for information in relation to the Offer should be directed to the Dealer Managers:
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THE DEALER MANAGERS |
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Merrill Lynch InternationalMerrill Lynch Financial Centre 2 King Edward Street London EC1A 1HQUnited Kingdom |
UBS Limited1 Finsbury Avenue London EC2M 2PP United Kingdom |
Lloyds TSB Bank plc Lloyds TSB Corporate Markets10 Gresham Street London EC2V 7AE United Kingdom |
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Tel: +44 20 7995 3715 |
Tel: +44 20 7567 7480 |
Tel: +44 20 7158 2016 |
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Fax: +44 20 7995 8582 |
Fax: +44 20 7568 5332 |
Fax: +44 20 7661 4790 |
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Attention: Liability Management |
Attention: Liability Management Group |
Attention: Debt Capital Markets |
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email: [email protected] |
email: [email protected] / [email protected] |
email: [email protected] / [email protected] |
Requests for information in relation to the procedures for exchanging Existing Notes in, and for any documents or materials relating to, the Exchange Offer should be directed to the Exchange Agent:
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EXCHANGE AGENT |
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Lucid Issuer Services Limited436 Essex Road London N1 3QP United Kingdom |
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Tel: +44 20 7704 0880 |
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Fax: +44 20 7067 9098 |
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Attention: Sunjeeve Patel, Lee Pellicci, Yves Theis |
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email: [email protected] |
DISCLAIMER
This announcement must be read in conjunction with the Exchange Offer Memorandum. This announcement and the Exchange Offer Memorandum contain important information which must be read carefully before any decision is made with respect to the Exchange Offer. If any Holder is in any doubt as to the action it should take, it is recommended to seek its own legal, tax and financial advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent financial adviser. Any individual or company whose Existing Notes are held on its behalf by a broker, dealer, bank, custodian, trust company, or other nominee must contact such entity if it wishes to participate in the Exchange Offer. None of the Dealer Managers, the Exchange Agent, the Existing Note Trustee, the New Capital Securities Trustee or any person who controls, or is a director, officer, employee or agent of such persons, or any affiliate of such persons, makes any recommendation as to whether Holders should participate in the Exchange Offer.
No offer or invitation to acquire or exchange any securities is being made pursuant to this announcement. Neither this announcement nor the Exchange Offer Memorandum constitutes an invitation to participate in the Exchange Offer in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such invitation under applicable securities laws and offers of Existing Notes for exchange pursuant to the Exchange Offer will not be accepted from Holders in any jurisdiction where such invitation is unlawful.
The distribution of this announcement and the Exchange Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and/or the Exchange Offer Memorandum comes are required by each of the Issuer, the Dealer Managers and the Exchange Agent to inform themselves about, and to observe, any such restrictions.
OFFER RESTRICTIONS
United States
The Exchange Offer is not being made, and will not be made, directly or indirectly, in or into, or by use of the mail 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, or for the account or benefit of, U.S. persons. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone and the internet. Accordingly, copies of this announcement, the Exchange Offer Memorandum and any other documents or materials relating to the Exchange 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 U.S. persons and the Existing Notes cannot be Offered for Exchange by any such use, means, instruments or facilities or from within the United States or by U.S. persons. Any purported Offer to Exchange Existing Notes resulting directly or indirectly from a violation of these restrictions will be invalid, and any purported Offer to Exchange made by a U.S. person, a resident of the United States or from the United States or from any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States or for a U.S. person will be invalid and will not be accepted.
Neither this announcement nor the Exchange Offer Memorandum is an offer of securities for sale in the United States or to U.S. persons. The Existing Notes and the New Capital Securities have not been, and will not be, registered under the Securities Act or the securities laws of any state or jurisdiction of the United States, and may not be offered, sold or delivered, directly or indirectly, in the United States or to, or for the account or benefit of U.S. persons. The purpose of this announcement and the Exchange Offer Memorandum is limited to the Exchange Offer, and neither this announcement nor the Exchange Offer Memorandum may be sent or given to any person other than in an offshore transaction in accordance with Regulation S under the Securities Act.
Each Holder of Existing Notes participating in the Exchange Offer will represent that it is participating in the Exchange Offer in accordance with Regulation S under the Securities Act and that it is not participating in the Exchange Offer from the United States nor is it a U.S. person or an agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States or for a U.S. person.
Italy
This announcement and the Exchange Offer are not being made in the Republic of Italy. The Exchange Offer, this announcement and the Exchange Offer Memorandum have not been submitted to the clearance procedure of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations. Accordingly, Holders are hereby notified that, to the extent such Holders are persons resident and/or located in the Republic of Italy, no Exchange Offer is available to them and they may not Offer to Exchange Existing Notes pursuant to the Exchange Offer nor may the New Capital Securities be offered, sold or delivered in the Republic of Italy and, as such, any Electronic Instruction Notice received from or on behalf of such persons shall be ineffective and void, and none of this announcement, the Exchange Offer Memorandum or any other offering material relating to the Exchange Offer, the Existing Notes or the New Capital Securities may be distributed or made available in the Republic of Italy.
United Kingdom
The communication of this announcement and the Exchange Offer Memorandum is not being made and such documents have not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, such documents are only for circulation to persons within the United Kingdom falling within the definition of Investment Professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order")) or within Article 43 of the Order, or other persons to whom they may lawfully be communicated in accordance with the Order.
Other
The Exchange Offer is subject to further offer and distribution restrictions in, amongst other countries, Belgium, France and Switzerland as more fully set out in the Exchange Offer Memorandum. The distribution of this announcement in those jurisdictions is restricted by the laws of such jurisdictions. No action has been or will be taken in any jurisdiction in relation to the Exchange Offer that would permit a public offering of securities other than in Switzerland.
Related Shares:
Lloyds