Lloyds Regulatory News (LLOY)

12 June 2017

LLOYDS BANK PLC COMMENCES A CASH TENDER OFFER FOR CERTAIN OF ITS OUTSTANDING NOTES

Lloyds Bank plc (the "Offeror") has today launched respective non-U.S. and U.S. tender offers to repurchase selected senior debt securities (total pool of approximately £6 billion equivalent). The offers will run concurrently.

USD Tender Offer

The Offeror has today launched a tender offer (the "Offer") to purchase for cash any and all of certain series of U.S. dollar denominated notes issued by the Offeror and guaranteed by Lloyds Banking Group plc set out in the table below (the "Notes").

The Offer is being made on the terms and subject to the conditions set out in the Offer to Purchase dated 12 June 2017 (the "Offer to Purchase") and the related Notice of Guaranteed Delivery (together, the "Offer Documents"). Capitalised terms not otherwise defined in this announcement have the same meaning as in the Offer to Purchase.

Purpose of the Offer

The Offeror is making the Offer in order to provide the holders of the Notes with an opportunity to have their Notes repurchased while maintaining a prudent approach to the management of the Group's funding and liquidity base.

The Group continues to maintain a strong liquidity and capital position, reducing the requirement for wholesale funding in 2017. ‎The Group currently envisages focusing on modest incremental senior unsecured issuance from Lloyds Banking Group plc.‎

Going forward, the Group will continue to assess issuance opportunities for senior unsecured debt from both Lloyds Bank plc and Lloyds Banking Group plc to meet the Group's annual wholesale funding requirements. The Offer is not conditional upon any such future capital markets issuance activity, but the Group reserves the right to issue new debt securities from time to time, including during the term of the Offer.

Terms of the Offer

The Offeror is offering to purchase for cash, on the terms and conditions described in the Offer to Purchase, any and all of the outstanding Notes set out in the table below.

The Offer will expire at 5:00 p.m., New York City time, on 20 June 2017, unless extended (such date and time, as the same may be extended, the "Expiration Deadline") or earlier terminated.

Purchase Price; Accrued Interest

The Purchase Price for each $1,000 principal amount of each Series of Notes validly tendered and not validly withdrawn at or prior to the Expiration Deadline and accepted for purchase by the Offeror will be equal to an amount (rounded to the nearest cent) that would reflect, as of the Settlement Date, a yield to the maturity date of such Series of Notes equal to the sum of (i) the Reference Yield for such Series of Notes, plus (ii) the Fixed Spread set forth in the table above.

In addition to the Purchase Price, holders of Notes accepted for purchase pursuant to the Offer, will also receive accrued and unpaid interest on each $1,000 principal amount of such Notes (rounded to the nearest $0.01 with $0.005 being rounded upwards) from the last interest payment date up to, but not including, the Settlement Date (as defined below) (the "Accrued Interest").

Settlement

Unless the Offer is extended, reopened or earlier terminated, payment of the Purchase Price, plus any Accrued Interest, to holders of Notes that are accepted for purchase is expected to be made on June 23, 2017 (the "Settlement Date").

Offer Conditions

The Offer is not conditional upon any minimum amount of Notes being tendered. However, the Offer is conditional upon the satisfaction or waiver of certain conditions described in the Offer to Purchase.

Withdrawal Rights

Notes tendered pursuant to the Offer may be withdrawn at any time before the earlier of (i) the Withdrawal Deadline and (ii) if the Offer is extended, the 10th Business Day after the commencement of the Offer. Notes tendered pursuant to the Offer may also be withdrawn at any time after the 60th Business Day after commencement of the Offer if, for any reason, the Offer has not been consummated within 60 Business Days of commencement.

The relevant deadline set by the relevant Clearing System or any intermediary for the submission of Tender Instructions may be earlier than the deadlines set out herein.

Concurrent Non-U.S. Offer

Concurrently with the Offer, the Group is launching a capped tender offer in respect of certain of Lloyds Bank plc's outstanding euro and pound sterling denominated debt securities (the "Non-U.S. Offer"). The Non-U.S. Offer is not open to any holder of such securities that is a U.S. resident and is not being made pursuant to the Offer to Purchase. Holders may not tender any securities in the Offer other than the Notes specified in the table above.

Indicative Timetable

The following table sets out the expected dates and times of the key events relating to the Offer. This is an indicative timetable and is subject to change.

The times and dates above are subject, where applicable, to the right of the Offeror to extend, re-open, amend, limit, terminate or withdraw the Offer, subject to applicable law. Accordingly, the actual timetable may differ significantly from the expected timetable set out above.

Holders should confirm with the bank, securities broker or any other intermediary through which they hold their Notes whether such intermediary needs to receive instructions from a holder before the deadlines specified above in order for that holder to be able to participate in, or withdraw their instruction to participate in, the Offer.

FURTHER INFORMATION

Copies of the Offer Documents are available at the following web address: https://portal.lucid-is.com 

Requests for additional copies of the Offer Documents and information in relation to the procedures for tendering should be directed to:

Tender Agent

Lucid Issuer Services Limited Email: lloydsbank@lucid-is.com

Paul Kamminga / Arlind Bytyqi Telephone: + 44 (0) 20 7704 0880

Investor Relations

Douglas Radcliffe Email: douglas.radcliffe@finance.lloydsbanking.com

Group Investor Relations Director Telephone: +44 (0) 20 7356 1571

Dealer Manager

Lloyds Securities Inc. U.S. Toll-Free: +1 (855) 400-6511

Collect: +1 (212) 827-3105

Email: liability.management@lloydsbanking.com

Attn: Liability Management Group

DISCLAIMER

This announcement and the Offer to Purchase (including the documents incorporated by reference therein) contain important information which should be read carefully before any decision is made with respect to the Offer. If you are in any doubt as to the contents of this announcement or the Offer to Purchase or the action you should take, you are recommended to seek your own financial and legal advice, including as to any tax consequences, immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial or legal adviser. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee or intermediary must contact such entity if it wishes to participate in the Offer. None of the Offeror, the Dealer Manager or the Tender Agent make any recommendation as to whether holders should tender Notes pursuant to the Offer.

OFFER RESTRICTIONS

United Kingdom

The communication of this announcement, the Offer to Purchase and any other documents or materials relating to the Offer is not being made, and such documents and/or materials have not been approved, by an authorised person for the purposes of section 21 of the FSMA. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials is exempt from the restriction on financial promotions under section 21 of the FSMA on the basis that it is only directed at and may be communicated to (1) those persons who are existing members or creditors of the Group or other persons within Article 43 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, and (2) any other persons to whom these documents and/or materials may lawfully be communicated.

Belgium

Neither this announcement, the Offer to Purchase nor any other documents or materials relating to the Offer have been submitted to or will be submitted for approval or recognition to the Financial Services and Markets Authority (Autorité des services et marchés financiers / Autoriteit voor financiële diensten en markten) and, accordingly, the Offer may not be made in Belgium by way of a public offering, as defined in Articles 3 and 6 of the Belgian Law of April 1, 2007 on public takeover bids as amended or replaced from time to time. Accordingly, the Offer may not be advertised and the Offer will not be extended, and neither this announcement nor any other documents or materials relating to the Offer (including any memorandum, information circular, brochure or any similar documents) has been or shall be distributed or made available, directly or indirectly, to any person in Belgium other than "qualified investors" in the sense of Article 10 of the Belgian Law of June 16, 2006 on the public offer of placement instruments and the admission to trading of placement instruments on regulated markets, acting on their own account. This announcement has been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Offer. Accordingly, the information contained in this announcement may not be used for any other purpose or disclosed to any other person in Belgium.

France

The Offer is not being made, directly or indirectly, to the public in France. Neither this announcement, the Offer to Purchase nor any other documents or offering materials relating to the Offer, has been or shall be distributed to the public in France and only (i) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers) and/or (ii) qualified investors (investisseurs qualifiés), other than individuals, acting for their own account, all as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 to D.411-3 of the French Code monétaire et financier, are eligible to participate in the Offer. This announcement has not been and will not be submitted for clearance procedures (visa) of the Autorité des marchés financiers.

Italy

None of the Offer, this announcement, the Offer to Purchase or any other documents or materials relating to the Offer has been or will be submitted to the clearance procedure of the Commissione Nazionale per le Società e la Borsa ("CONSOB"), pursuant to applicable Italian laws and regulations.

The Offer is being carried out in the Republic of Italy ("Italy") as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of February 24, 1998, as amended (the "Financial Services Act") and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of May 14, 1999, as amended (the "CONSOB Regulation"). The Offer is also being carried out in compliance with article 35-bis, paragraph 7 of the CONSOB Regulation.

Holders or beneficial owners of the Notes located in Italy can tender the Notes through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of October 29, 2007, as amended from time to time, and Legislative Decree No. 385 of September 1, 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority.

Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Notes or the Offer.

Canada

Neither this announcement, the Offer to Purchase nor any other materials relating to the Offer constitute, nor may be used in connection with, an offer or solicitation in any place where offers or solicitations are not permitted by law. Any offer or solicitation in Canada must be made through a dealer that is appropriately registered under the laws of the applicable province or territory of Canada, or pursuant to an exemption from that requirement.

General

The Offer does not constitute an offer to buy or the solicitation of an offer to sell Notes in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities or other laws require the Offer to be made by a licensed broker or dealer and the Dealer Manager or, where the context so requires, any of its affiliates is such a licensed broker or dealer in that jurisdiction, the Offer shall be deemed to be made on behalf of the Offeror by such Dealer Manager or affiliate (as the case may be) in such jurisdiction.

The distribution of this announcement and the Offer to Purchase in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and the Offer to Purchase comes are required by each of the Offeror, the Dealer Manager and the Tender Agent to inform themselves about, and to observe, any such restrictions.

This announcement contains inside information which is disclosed in accordance with the market abuse regulation.

FORWARD-LOOKING STATEMENTS

Certain statements included in this announcement are forward-looking statements. We and the Group may make forward-looking statements in other documents filed with the SEC that are incorporated by reference into the Offer to Purchase. Forward-looking statements can be identified by the use of forward-looking terminology such as words "expect", "estimate", "project", "anticipate", "believes", "should", "could", 'intend", "plan", "probability", "risk", "target", "goal", "objective", "may", "endeavour", "outlook", "optimistic", "prospects" or by the use of similar expressions or variations on such expressions, or by the discussion of strategy or objectives. Forward-looking statements are based on current plans, estimates and projections, and are subject to inherent risks, uncertainties and other factors which could cause actual results to differ materially from the future results expressed or implied by such forward-looking statements.

In particular, this announcement and certain documents incorporated by reference into the Offer to Purchase include forward-looking statements relating, but not limited to, projections or expectations of LBG's future financial position including profit attributable to shareholders, provisions, economic profit, dividends, capital structure, portfolios, net interest margin, capital ratios, liquidity, risk-weighted assets (RWAs), expenditures or any other financial items or ratios; litigation, regulatory and governmental investigations; LBG's future financial performance; the level and extent of future impairments and write-downs; statements of plans, objectives or goals of LBG or its management including in respect of statements about the future business and economic environments in the U.K. and elsewhere including, but not limited to, future trends in interest rates, foreign exchange rates, credit and equity market levels and demographic developments; statements about competition, regulation, disposals and consolidation or technological developments in the financial services industry; and statements of assumptions underlying such statements. Such statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from the future results expressed or implied by such forward-looking statements. For example, certain of the market risk disclosures are dependent on choices about key model characteristics, assumptions and estimates, and are subject to various limitations. By their nature, certain of the market risk disclosures are only estimates and, as a result, actual future gains and losses could differ materially from those that have been estimated.

Other factors could also adversely affect our results or the accuracy of forward-looking statements in this announcement, and you should not consider the factors discussed here or in the Annual Report or other documents incorporated by reference into the Offer to Purchase to be a complete set of all potential risks or uncertainties. We have economic, financial market, credit, legal and other specialists who monitor economic and market conditions and government policies and actions. However, because it is difficult to predict with accuracy any changes in economic or market conditions or in governmental policies and actions, it is difficult for us to anticipate the effects that such changes could have on our financial performance and business operations.

The forward-looking statements made in this announcement speak only as of the date of this announcement. We do not intend to publicly update or revise these forward-looking statements to reflect events or circumstances after the date of this announcement and we do not assume any responsibility to do so except as required by applicable law.