REG - Lloyds Banking Group - Consent Solicitation Launch Announcement
11/05/2026 08:45
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RNS Number : 7827D Lloyds Banking Group PLC 11 May 2026
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11 May 2026
LLOYDS BANKING GROUP PLC
(incorporated in Scotland with limited liability with registered number 95000)
Legal Entity Identifier (LEI: H7FNTJ4851HG0EXQ1Z70)
(the "Issuer")
NOTICE
to the holders of the £750,009,000 Fixed Rate Reset Additional Tier 1
Perpetual Subordinated Contingent Convertible Securities Callable 2029 (ISIN:
XS1043552261) (the "Securities", and the holders thereof, the
"Securityholders") of the Issuer presently outstanding.
The Issuer has today given a Notice of Meeting in respect of the Securities
for the purpose of soliciting consent from the Securityholders to consent to
certain amendments to the terms and conditions of the Securities (the
"Conditions") and the related trust deed in order to align the subordination
provisions of the Securities with the corresponding provisions contained in
the Issuer's other additional tier 1 issuances which are expected to be
outstanding as at 1 July 2026 (the "Recent AT1 Subordination Provisions"),
as proposed by the Issuer (the "Proposal") for approval by extraordinary
resolution of the Securityholders (the "Extraordinary Resolution"), as further
described in the consent solicitation memorandum dated 11 May 2026 (the
"Consent Solicitation Memorandum" and such invitation in respect of the
Securities, the "Consent Solicitation").
1. Notice of meetingS in respect of the SECURITIES
To view the Notice of Meeting, please paste the following URL into the address
bar of your browser:
https://www.londonstockexchange.com/news-article/LLOY/notice-of-meeting/17585640
(https://www.londonstockexchange.com/news-article/LLOY/notice-of-meeting/17585640)
2. CONSENT FEEs
Early Consent Fee and Late Consent Fee
Eligible Securityholders may be eligible, to the extent permitted by
applicable laws and regulations, to receive an amount equal to 0.25 per cent.
of the principal amount of the Securities that are the subject of the relevant
Electronic Voting Instruction (the "Early Consent Fee") by delivering, or
arranging to have delivered on their behalf, a valid Electronic Voting
Instruction in favour of the Extraordinary Resolution, that is received by the
Tabulation Agent by 4:00 p.m. (London time) on 22 May 2026 (the "Early
Instruction Deadline") and not subsequently revoked. Similarly, Eligible
Securityholders from whom valid Electronic Voting Instructions are received in
favour of the Extraordinary Resolution after the Early Instruction Deadline
and by the Expiration Deadline may be eligible, to the extent permitted by
applicable laws and regulations, to receive an amount equal to 0.10 per cent.
of the principal amount of the Securities that are the subject of the relevant
Electronic Voting Instruction (the "Late Consent Fee"), but will not be
eligible to receive the Early Consent Fee.
Only Eligible Securityholders who (i) deliver, or arrange to have delivered on
their behalf, valid Electronic Voting Instructions in favour of the
Extraordinary Resolution by the relevant deadline and (ii) do not seek to
attend the Meeting (or any adjourned Meeting) in person or make any other
arrangements to be represented at the Meeting (or any adjourned Meeting), may
be eligible for the Early Consent Fee or the Late Consent Fee (as applicable).
Any Eligible Securityholder that separately seeks to appoint a proxy to vote
at the Meeting (or any adjourned Meeting) on its behalf or attends the Meeting
(or any adjourned Meeting) in person or makes other arrangements to be
represented at the Meeting (or any adjourned Meeting) will not be eligible for
the Early Consent Fee and/or the Late Consent Fee, irrespective of whether
such Securityholder has delivered an Electronic Voting Instruction, or voted
in favour of the Extraordinary Resolution.
Ineligible Securityholders
Ineligible Securityholders may be eligible, to the extent permitted by
applicable laws and regulations, to receive an amount equal to 0.25 per cent.
of the principal amount of the Securities that are the subject of the relevant
Ineligible Securityholder Instruction (the "Ineligible Securityholder Early
Consent Fee") by delivering, or arranging to have delivered on their behalf, a
valid Ineligible Securityholder Instruction abstaining from voting in respect
of the Extraordinary Resolution, that is received by the Tabulation Agent by
the Early Instruction Deadline and not subsequently revoked. Ineligible
Securityholders from whom valid Ineligible Securityholder Instructions are
received abstaining from voting in respect of the Extraordinary Resolution
after the Early Instruction Deadline and by the Expiration Deadline may be
eligible, to the extent permitted by applicable laws and regulations, to
receive an amount equal to 0.10 per cent. of the principal amount of the
Securities that are the subject of the relevant Ineligible Securityholder
Instruction (the "Ineligible Securityholder Late Consent Fee"), but will not
be eligible to receive the Ineligible Securityholder Early Consent Fee.
An "Ineligible Securityholder Instruction" means an Electronic Voting
Instruction provided by (or on behalf of) an Ineligible Securityholder and
confirming that the relevant Electronic Voting Instruction has been provided
by an Ineligible Securityholder.
Only Ineligible Securityholders who (1) deliver, or arrange to have delivered
on their behalf, valid Ineligible Securityholder Instructions abstaining from
voting in respect of the Extraordinary Resolution by the relevant deadline and
(2) do not seek to attend the Meeting (or any adjourned Meeting) in person or
make any other arrangements to be represented at the Meeting (or any adjourned
Meeting), may be eligible for the Ineligible Securityholder Early Consent Fee
or the Ineligible Securityholder Late Consent Fee (as applicable). Any
Ineligible Securityholder that separately seeks to appoint a proxy to vote at
the Meeting (or any adjourned Meeting) on its behalf or attends the Meeting
(or any adjourned Meeting) in person or makes other arrangements to be
represented at the Meeting (or any adjourned Meeting) will not be eligible for
the Ineligible Securityholder Early Consent Fee and/or the Ineligible
Securityholder Late Consent Fee, irrespective of whether such Securityholder
has delivered an Ineligible Securityholder Instruction, or abstained from
voting in respect, or voted in favour of the Extraordinary Resolution.
3. BACKGROUND
On 16 November 2020, the United Kingdom Prudential Regulation Authority
("PRA") sent a "Dear CFO" letter to all major UK deposit takers requesting all
firms to take steps to remediate the prudential treatment of legacy
instruments. The Existing Preference Shares were historically counted as Tier
1 capital but ceased to be eligible to be counted as Tier 1 capital at the end
of the CRR transition period on 31 December 2021.
At the time, there was a risk that, if the Existing Preference Shares counted
as regulatory Tier 2 Capital but maintained a legal ranking pari passu with
Additional Tier 1 Capital, an infection risk would be created in respect of
the Issuer's then existing Additional Tier 1 Capital securities.
As a result, and as per the announcements relating to the Existing Preference
Shares made on 10 November 2021 1 (#_ftn1) , the Group classified the
Existing Preference Shares as ineligible for regulatory capital purposes,
while the legal ranking of the Existing Preference Shares was left unchanged,
ranking pari passu with Additional Tier 1 Capital. However, at the time of the
announcements, the Group also reserved the right to review such classification
in future, to the extent permitted by applicable law and regulation.
Aside from the Securities, all of the Issuer's other additional tier 1
issuances which are expected to be outstanding as at 1 July 2026 (the "LBG AT1
Securities") contain identical subordination provisions (the "Recent AT1
Subordination Provisions"), which differ from the subordination provisions
currently contained in the Conditions. Under the Recent AT1 Subordination
Provisions, the Issuer is permitted, in its sole discretion, to subordinate
the LBG AT1 Securities to (i) the Existing Preference Shares of the Issuer and
(ii) any securities of the Issuer ranking or expressed to rank pari passu with
any of the Existing Preference Shares in a winding-up of the Issuer (the "Pari
Passu Securities"). This is contingent upon the Issuer determining that the
LBG AT1 Securities would not be included in the Additional Tier 1 Capital (as
defined below) of the Group (as defined below) unless the holders of some or
all of the Existing Preference Shares and any Pari Passu Securities are ranked
senior to such LBG AT1 Securities, including as a result of the Issuer
electing to treat the Existing Preference Shares as Tier 2 Capital. It is
proposed that the Conditions be amended to align the subordination provisions
of the Securities with the Recent AT1 Subordination Provisions.
"Existing Preference Shares" means the 9.25% preference shares (ISIN
GB00B3KS9W93), the 6.413% preference shares (ISIN USG5533WAA56/US539439AC38),
the 6.657% preference shares (ISIN US539439AE93/US539439AF68) and the 9.75%
preference shares (ISIN GB00B3KSB238), each issued by the Issuer.
If the Extraordinary Resolution is passed and implemented, the Issuer intends
to reclassify the Existing Preference Shares as Tier 2 Capital from 1 July
2026, increasing the Tier 2 Capital of the Group by c.£400m.
This Proposal would reduce the amount of legacy instruments that do not count
as own funds in line with the Bank of England's resolution planning
objectives. The changes to the Conditions contemplated in the Proposal have
been reviewed by the PRA, who have provided confirmation of no objection in
relation to the Proposal.
It should be noted, that following the redemption of the Issuer's $500m 6.75%
AT1 Securities callable in June 2026 (the notice for the redemption of which
was issued on 30 April 2026), the Securities will be the only outstanding
additional tier 1 issuance of the Issuer without the inclusion of the Recent
AT1 Subordination Provisions. The Securities remain callable at the Issuer's
discretion in June 2029, subject to the satisfaction of certain conditions.
Therefore, in the event the Extraordinary Resolution does not pass, the
classification of the Existing Preference Shares is one of the factors that
the Issuer will consider alongside the review of any potential optional
redemption of the Securities at a future date.
Rating Agencies
A copy of the draft Consent Solicitation Memorandum has been provided to each
of Fitch Ratings Limited, Moody's Investors Service Ltd. and S&P Global
Ratings UK Limited. The Issuer is not expecting any change to the ratings of
the Securities as a result of the Extraordinary Resolution being implemented.
4. Indicative timetable for the consent solicitation
This is an indicative timetable showing one possible outcome for the timing of
the Consent Solicitation based on the dates in the Consent Solicitation
Memorandum and assuming that the Meeting is not adjourned. This timetable is
subject to change and dates and times may be extended or amended by the Issuer
in accordance with the terms of the Consent Solicitation as described in the
Consent Solicitation Memorandum. Accordingly, the actual timetable may
differ significantly from the timetable below.
Date Action
11 May 2026 Announcement of Consent Solicitation
Notice of Meeting delivered to Clearing Systems for communication to Direct
Participants and published via Euronext Dublin.
Consent Solicitation Memorandum and draft Supplemental Trust Deed available
from the Tabulation Agent.
From this date, the relevant Securityholders may arrange for the relevant
Securities held by Clearstream, Luxembourg and/or Euroclear in their accounts
to be blocked in such accounts and held to the order and under the control of
the Registrar in order to obtain form of proxy or give valid Electronic Voting
Instructions.
22 May 2026 Early Instruction Deadline
4:00 p.m.,
London time
Deadline for receipt by the Tabulation Agent of valid Electronic Voting
Instructions from Eligible Securityholders in favour of the Extraordinary
Resolution for such Eligible Securityholders to be eligible to receive the
Early Consent Fee.
Deadline for receipt by the Tabulation Agent of valid Ineligible
Securityholder Instructions from Ineligible Securityholders abstaining from
voting in respect of the Extraordinary Resolution for such Ineligible
Securityholders to be eligible to receive the Ineligible Securityholder Early
Consent Fee.
29 May 2026 Expiration Deadline
10:00 a.m., Deadline for receipt by the Tabulation Agent of all Electronic Voting
Instructions in order for Securityholders to be able to participate in the
London time Consent Solicitation.
Deadline for receipt by the Tabulation Agent of valid Electronic Voting
Instructions from Eligible Securityholders in favour of the Extraordinary
Resolution for such Eligible Securityholders to be eligible to receive the
Late Consent Fee.
Deadline for receipt by the Tabulation Agent of valid Ineligible
Securityholder Instructions from Ineligible Securityholders abstaining from
voting in respect of the Extraordinary Resolution for such Ineligible
Securityholders to be eligible to receive the Ineligible Securityholder Late
Consent Fee.
Deadline for making any other arrangements to attend or be represented at the
Meeting.
2 June 2026 Meeting
10:00 a.m., Meeting to be held at the offices of Clifford Chance LLP at 10 Upper Bank
Street, London E14 5JJ, United Kingdom.
London time
Announcement of the results of the Meeting
As soon as reasonably practicable after the Meeting Announcement of the results of the Meeting and, if the Extraordinary
Resolution has been passed, whether the Eligibility Condition has been
satisfied.
Such announcement to be published via Euronext Dublin and delivered to the
Clearing Systems.
As soon as reasonably practicable after the Meeting Implementation Date
If the Extraordinary Resolution is passed and the Eligibility Condition is
satisfied, the Supplemental Trust Deed will be executed.
Expected to be no later than the fifth Business Day immediately following the Fee Payment Date
Implementation Date
Expected date for payment by the Issuer of the Early Consent Fee, the Late
Consent Fee, the Ineligible Securityholder Early Consent Fee and/or the
Ineligible Securityholder Late Consent Fee, in the event that the
Extraordinary Resolution is successfully passed and the Eligibility Condition
is satisfied.
Securityholders are advised to check with any bank, securities broker or other
intermediary through which they hold Securities when such intermediary would
require to receive instructions from a Securityholder in order for that
Securityholder to be able to participate in, or (in the limited circumstances
in which revocation is permitted) revoke their instruction to participate in,
the Consent Solicitation before the deadlines specified above. The deadlines
set by any such intermediary and each Clearing System for the submission of
Electronic Voting Instructions will be earlier than the relevant deadlines
specified above.
Capitalised terms used but not defined herein shall have the meanings set out
in the Consent Solicitation Memorandum.
Further information relating to the Consent Solicitation can be obtained
directly from the Solicitation Agent and the Tabulation Agent:
Lloyds Bank Corporate Markets plc Kroll Issuer Services Limited
33 Old Broad Street The News Building
London EC2N 1HZ 3 London Bridge Street
United Kingdom London SE1 9SG
United Kingdom
Telephone number: +44 20 7158 1726 / 1719
Attention: Liability Management Telephone: +44 20 7704 0880
Email: LBCMLiabilityManagement@lloydsbanking.com Email: lloyds@is.kroll.com
(mailto:LBCMLiabilityManagement@lloydsbanking.com)
Attention: Owen Morris
Website: https://deals.is.kroll.com/lloyds (https://deals.is.kroll.com/lloyds)
DISCLAIMER: This announcement must be read in conjunction with the Consent
Solicitation Memorandum. The Consent Solicitation Memorandum contains
important information which should be read carefully before any decision is
made with respect to the Consent Solicitation. If any Securityholder is in any
doubt as to the action it should take, it is recommended to seek its own
financial, legal and investment advice, including as to any tax consequences,
from its appropriately authorised stockbroker, bank manager, solicitor,
accountant and/or independent financial adviser. Any individual or company
whose Securities 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 Consent Solicitation or otherwise participate in the
Meeting (including any adjourned Meeting).
The distribution of this announcement and the Consent Solicitation Memorandum
in certain jurisdictions may be restricted by law. Persons into whose
possession this announcement and the Consent Solicitation Memorandum come are
required to inform themselves about, and to observe, any such restrictions.
The Solicitation Agent and the Tabulation Agent do not accept any
responsibility for the contents of this announcement or the Consent
Solicitation Memorandum.
1 (#_ftnref1) ISIN GB00B3KS9W93 and ISIN GB00B3KSB238:
https://otp.tools.investis.com/clients/uk/lloyds_banking_group_plc3/rns/regulatory-story.aspx?cid=1273&newsid=1525054
(https://otp.tools.investis.com/clients/uk/lloyds_banking_group_plc3/rns/regulatory-story.aspx?cid=1273&newsid=1525054)
ISIN USG5533WAA56/US539439AC38 and ISIN US539439AE93/US539439AF68:
https://otp.tools.investis.com/clients/uk/lloyds_banking_group_plc3/rns/regulatory-story.aspx?cid=1273&newsid=1525055
(https://otp.tools.investis.com/clients/uk/lloyds_banking_group_plc3/rns/regulatory-story.aspx?cid=1273&newsid=1525055)
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