Lloyds Share News (LLOY)

Lloyds Banking Group prices its £13.5bn rights issue, the biggest cash call in history, tomorrow and the maths suggest investors will be offered the shares somewhere between 33 and 37p.The lender has said the final offer price will be either 15p, or a discount of between 38% and 42% to the theoretical ex-rights price (TERP), expected to be about 55p, whichever is the higher.Its shares had traded as low as 83p after the bank announced its £22.5bn fundraising on 3 November, but they've improved since, which will increase the rights price.Investors liked the response to the part-nationalised lender's offer to swap existing debt for contingent capital, which encountered "strong demand".Offers to exchange £12.51bn of existing securities were received, of which £8.78bn have been accepted, said Lloyds today. It's issuing almost £7bn of enhanced capital notes (ECN), a new type of hybrid debt, plus a further £1.48bn of shares, cash or ECNs.The company has also upped the maximum number of ECNs, or CoCos (contingent convertible core Tier 1 securities), it will issue as part of the US exchange offer from $800m to $986m.The government is taking up its rights as part of the rights issue, investing £5.7bn net of an underwriting fee, to keep its stake in Lloyds at 43%. Earlier this month, the UK's third-largest lender said it was raising £21bn from a £13.5bn rights issue and £7.5bn swap of existing debt for contingent capital. The bond financing, later increased by £1.5bn due to high demand, counts towards core tier one capital and convert into equity in the event of a "stress scenario", such as Lloyds' core tier one ratio falling below 5%.This massive fundraising exercise is all part of Lloyds' plan to avoid being tied into the government's £260bn toxic asset protection scheme. It's already agreed to pay a £2.5bn break fee, having already received cover since the scheme was implemented earlier this year.Shareholders will get their say later this week when Lloyds tries to convince them this is all a great idea.A specially-convened meeting in Birmingham will house largely supportive institutional shareholders, although there are 2.8m private investors who may need a little more convincing.