LONDON, May 27 (IFR) - Lloyds Banking Group has launched a liability management exercise to buy back sterling and euro-denominated covered bonds as part of a plan to “manage its overall wholesale funding position and better optimise its stock of outstanding debt securities”, according to a statement released this morning.
Citigroup and Lloyds Bank are dealer managers for the exercise, which covers two bonds issued by Bank of Scotland plc and one by Lloyds Bank plc.
The first of the Bank of Scotland bonds is a GBP500m fixed to floating rate note due December 2014 (XS0208047778), of which GBP110.35m is outstanding. Lloyds is offering investors GBP1,000.39 per GBP1,000. The second is a EUR2bn 4.75% note due January 2015 (XS0327502224), which has EUR854.323m outstanding. The purchase price will be calculated with reference to a spread over the 3.75% January 2015 Bund.
The remaining bond, issued in Lloyds’ name, is the EUR1.5bn due March 2015 (XS0482808465). The purchase price will be determined with reference to the 2.5% February 2015 Bund.
The offer expires on June 3, with pricing details anticipated on June 4 and settlement on June 10. (Reporting by Anil Mayre; Editing by Philip Wright)