May 22, 2020 / 11:06 AM / a month ago

Lloyds decides not to redeem 750m euro CoCo bond due to COVID-19 crisis

LONDON, May 22 (Reuters) - Lloyds Banking Group told investors on Friday it would not redeem a 750 million euro ($817.58 million) contingent convertible (CoCo) bond as it seeks to keep its balance sheet strong in the face of the COVID-19 crisis.

Britain’s biggest domestic lender said it would not exercise its call option on the Additional Tier 1 bond - a type of CoCo instrument - on June 27 and that the bonds would reset to a new fixed coupon until the next option call date on June 27 2025.

Lloyd said it remained strongly capitalised, but added: “As a result of the extraordinary market challenges presented by Covid-19, the group has decided it is prudent to not reduce Tier 1 resources at this time.” ($1 = 0.9173 euros) (Reporting by Iain Withers, Editing by Abhinav Ramnarayan)

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