By Patricia Kowsmann Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Lloyds Banking Group PLC (LYG) is seeking to raise $300 million in senior notes from U.S. retail investors, in a move that highlights the U.K. bank's efforts to diversify funding. According to a term sheet seen by Dow Jones Newswires, Lloyds will offer for the first time to U.S. retail investors the chance to buy notes maturing in July 2050 for $25 each, with a coupon rate of around 7.75%. Coupon payments will be made quarterly beginning Oct. 15 this year. Until filing a shelf registration with the U.S. Securities and Exchange Commission that allows it to sell preferred shares and debt to U.S. retail investors, Lloyds was only able to target U.S. institutional investors under an existing program. Like other banks, 41%-government owned Lloyds is seeking to diversify its sources of liquidity, as regulators move closer to establishing new capital requirements. Fears over sovereign debt in European countries have also led to a dry up in regular debt issuance by banks. Last week, the Bank of England urged U.K.'s largest banks to seek funds from a wider range of sources, as they must refinance or replace GBP750 billion to GBP800 billion of loans and liquid assets by the end of 2012. Citigroup is the bookrunner for the U.S. offer. -By Patricia Kowsmann, Dow Jones Newswires. Tel +44(0)207-842-9295, patricia.kowsmann@dowjones.com (END) Dow Jones Newswires June 29, 2010 12:13 ET (16:13 GMT)