Lloyds Share News (LLOY)

By Katy Burne Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Lloyds Banking Group Plc (LYG, LLOY.LN) sold $750 million in long-term public-income notes Wednesday, targeting retail investors. Institutions bought only 5% of the issue, according to a person familiar with the sale. It was the first time Lloyds had sold a security registered with the Securities and Exchange Commission; previously it sold its securities privately in the U.S. "We had been able to do institutional trades before, but we hadn't been able to target U.S. retail," Lloyds spokeswoman Sara Evans said. "It's all about diversifying our funding profile." HSBC Holdings Plc (HBC, HSBA.LN), another U.K. bank, recently sold $3.4 billion in securities, also targeting retail investors. The HSBC notes were hybrids, which bear both debt- and equity-like features. About 35% of the buyers were institutions, the person familiar said. "That's two large non-U.S. entities tapping the U.S. retail market in this format," he said, noting the HSBC issue also attracted a lot of Asian investors. Lloyds' 40-year senior securities have a coupon of 7.75% in line with guidance; a par call in their fifth year allowing the issuer to redeem the notes at 100% of their face value plus interest; and they pay interest quarterly instead of semi-annually through to maturity on July 15, 2050. They were sold with a minimum denomination of $25 per security to facilitate investment from retail buyers. The amount sold by Lloyds will be $862.5 million if underwriters exercise an "over-allotment option" that allows them to increase the size of the offering to meet strong demand. Citigroup Global Markets, Banc of America Securities, UBS Securities and Wells Fargo Securities led the sale. BNP Paribas Securities, Goldman Sachs & Co., HSBC Securities, JP Morgan Securities Inc. and RBC Capital Markets Corp. were senior co-managers. Deutsche Bank Securities Inc., Lloyds TSB Bank Plc and RBS Securities were co-managers. The notes are expected to be rated A1 by Moody's Investors Service; A by Standard & Poor's; and AA- by Fitch Ratings. -By Katy Burne, Dow Jones Newswires; 212-416-3084; katy.burne@dowjones.com (END) Dow Jones Newswires July 01, 2010 15:00 ET (19:00 GMT)