March 6, 2014 / 11:17 AM / in 4 years

Lloyds offers to buy back up to 5 bn stg of bonds

LONDON, March 6 (Reuters) - 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 capital rules.

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.

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