REG - Lloyds Bank Plc - TENDER OFFER OF DATED SUBORDINATED NOTES
03/08/2022 09:45
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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 TENDER 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 £750,000,000 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 the Notes ISIN Number Nominal Amount Outstanding Reference Yield Fixed Spread Repurchase Yield 1 Purchase Price
£750,000,000 7.625 per cent. Dated Subordinated Notes due 2025 XS0503834821 £750,000,000 Yield to maturity of the 0.25 per cent. U.K. Government Gilts due January 2025 +170 basis points 2 Sum of the Reference Yield and Fixed Spread To be determined as set out in the Tender Offer Memorandum
(ISIN: GB00BLPK7110) (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 Yield 3 Hypothetical Purchase 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 £0.01, with £0.005 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) on Expiration Deadline
11 August 2022
Deadline for receipt by the Tender Agent 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. (London time) on 12 August 2022 (the "Price Price Determination Time
Determination Date")
Determination of the Reference Yield, the Repurchase Yield and the Purchase
Price.
As soon as practicable after the Price Determination Time Announcement of Pricing, Acceptance and Result of Offer
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 2022 Settlement Date
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 £100,000 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 £100,000 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: +44 20 7158 1726 / 3939
Attention: Liability Management Group
Email: lbcmliabilitymanagement@lloydsbanking.com
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: +44 (0)20 7158 1737
Email: Claire-Elizabeth.Padley@LloydsBanking.com
(mailto:Claire-Elizabeth.Padley@LloydsBanking.com)
Pascale Dorey
Debt Investor Relations
Tel: +44 (0)20 7158 1060
Email: Pascale.Dorey@LloydsBanking.com
(mailto:Pascale.Dorey@LloydsBanking.com)
Douglas Radcliffe
Group Investor Relations Director
Telephone: +44 (0)20 7356 1571
Email: Douglas.Radcliffe@LloydsBanking.com
(mailto:Douglas.Radcliffe@LloydsBanking.com)
Requests for information in relation to, and for any documents or materials
relating to, the Offer should be directed to:
TENDER AGENT
Kroll Issuer Services Limited
The Shard
32 London Bridge Street
London SE1 9SG
United Kingdom
Telephone: +44 207 704 0880
Attention: Arlind Bytyqi
Email: lloydsbank@is.kroll.com
Website: https://deals.is.kroll.com/lloydsbank
(https://deals.is.kroll.com/natwestgroup)
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 (#_ftnref1) Expressed on a semi-annual basis.
2 (#_ftnref2) Expressed on a semi-annual basis.
3 (#_ftnref3) Determined as at 1.00 p.m. (London time) on 2 August 2022
4 (#_ftnref4) 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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