LONDON, March 6 Lloyds Banking Group
said it is offering investors of bonds that helped rescue the
bank in the financial crisis the chance to swap them for up to 5
billion pounds ($8.4 billion) of debt instruments that meet new
Lloyds said it will offer institutional investors the option
to exchange instruments, known as enhanced capital notes (ECNs),
for new bonds. Retail ECN holders will also be able to exchange
their holdings for cash, at a premium to face value.
Lloyds issued the bonds in 2009 and they were designed to
boost the bank's capital if it ran into trouble. But new UK and
European capital rules in force this year mean the bonds may no
longer count as capital when the bank hits trouble, and Lloyds
warned last month it could buy them back at face value.