Consent Solicitation Launch Announcement
Summary by AI BETAClose X
NOT FOR DISTRIBUTION (A) IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) (the "United States") OR TO ANY U.S. PERSON (AS DEFINED BELOW) OR (B) IN OR INTO ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS DOCUMENT.
11 May 2026
LLOYDS BANKING GROUP PLC
(incorporated in Scotland with limited liability with registered number 95000)
Legal Entity Identifier (LEI: H7FNTJ4851HG0EXQ1Z70)
(the "Issuer")
NOTICE
to the holders of the £750,009,000 Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities Callable 2029 (ISIN: XS1043552261) (the "Securities", and the holders thereof, the "Securityholders") of the Issuer presently outstanding.
The Issuer has today given a Notice of Meeting in respect of the Securities for the purpose of soliciting consent from the Securityholders to consent to certain amendments to the terms and conditions of the Securities (the "Conditions") and the related trust deed in order to align the subordination provisions of the Securities with the corresponding provisions contained in the Issuer's other additional tier 1 issuances which are expected to be outstanding as at 1 July 2026 (the "Recent AT1 Subordination Provisions"), as proposed by the Issuer (the "Proposal") for approval by extraordinary resolution of the Securityholders (the "Extraordinary Resolution"), as further described in the consent solicitation memorandum dated 11 May 2026 (the "Consent Solicitation Memorandum" and such invitation in respect of the Securities, the "Consent Solicitation").
1. Notice of meetingS in respect of the SECURITIES
To view the Notice of Meeting, please paste the following URL into the address bar of your browser:
https://www.londonstockexchange.com/news-article/LLOY/notice-of-meeting/17585640
2. CONSENT FEEs
Early Consent Fee and Late Consent Fee
Eligible Securityholders may be eligible, to the extent permitted by applicable laws and regulations, to receive an amount equal to 0.25 per cent. of the principal amount of the Securities that are the subject of the relevant Electronic Voting Instruction (the "Early Consent Fee") by delivering, or arranging to have delivered on their behalf, a valid Electronic Voting Instruction in favour of the Extraordinary Resolution, that is received by the Tabulation Agent by 4:00 p.m. (London time) on 22 May 2026 (the "Early Instruction Deadline") and not subsequently revoked. Similarly, Eligible Securityholders from whom valid Electronic Voting Instructions are received in favour of the Extraordinary Resolution after the Early Instruction Deadline and by the Expiration Deadline may be eligible, to the extent permitted by applicable laws and regulations, to receive an amount equal to 0.10 per cent. of the principal amount of the Securities that are the subject of the relevant Electronic Voting Instruction (the "Late Consent Fee"), but will not be eligible to receive the Early Consent Fee.
Only Eligible Securityholders who (i) deliver, or arrange to have delivered on their behalf, valid Electronic Voting Instructions in favour of the Extraordinary Resolution by the relevant deadline and (ii) do not seek to attend the Meeting (or any adjourned Meeting) in person or make any other arrangements to be represented at the Meeting (or any adjourned Meeting), may be eligible for the Early Consent Fee or the Late Consent Fee (as applicable). Any Eligible Securityholder that separately seeks to appoint a proxy to vote at the Meeting (or any adjourned Meeting) on its behalf or attends the Meeting (or any adjourned Meeting) in person or makes other arrangements to be represented at the Meeting (or any adjourned Meeting) will not be eligible for the Early Consent Fee and/or the Late Consent Fee, irrespective of whether such Securityholder has delivered an Electronic Voting Instruction, or voted in favour of the Extraordinary Resolution.
Ineligible Securityholders
Ineligible Securityholders may be eligible, to the extent permitted by applicable laws and regulations, to receive an amount equal to 0.25 per cent. of the principal amount of the Securities that are the subject of the relevant Ineligible Securityholder Instruction (the "Ineligible Securityholder Early Consent Fee") by delivering, or arranging to have delivered on their behalf, a valid Ineligible Securityholder Instruction abstaining from voting in respect of the Extraordinary Resolution, that is received by the Tabulation Agent by the Early Instruction Deadline and not subsequently revoked. Ineligible Securityholders from whom valid Ineligible Securityholder Instructions are received abstaining from voting in respect of the Extraordinary Resolution after the Early Instruction Deadline and by the Expiration Deadline may be eligible, to the extent permitted by applicable laws and regulations, to receive an amount equal to 0.10 per cent. of the principal amount of the Securities that are the subject of the relevant Ineligible Securityholder Instruction (the "Ineligible Securityholder Late Consent Fee"), but will not be eligible to receive the Ineligible Securityholder Early Consent Fee.
An "Ineligible Securityholder Instruction" means an Electronic Voting Instruction provided by (or on behalf of) an Ineligible Securityholder and confirming that the relevant Electronic Voting Instruction has been provided by an Ineligible Securityholder.
Only Ineligible Securityholders who (1) deliver, or arrange to have delivered on their behalf, valid Ineligible Securityholder Instructions abstaining from voting in respect of the Extraordinary Resolution by the relevant deadline and (2) do not seek to attend the Meeting (or any adjourned Meeting) in person or make any other arrangements to be represented at the Meeting (or any adjourned Meeting), may be eligible for the Ineligible Securityholder Early Consent Fee or the Ineligible Securityholder Late Consent Fee (as applicable). Any Ineligible Securityholder that separately seeks to appoint a proxy to vote at the Meeting (or any adjourned Meeting) on its behalf or attends the Meeting (or any adjourned Meeting) in person or makes other arrangements to be represented at the Meeting (or any adjourned Meeting) will not be eligible for the Ineligible Securityholder Early Consent Fee and/or the Ineligible Securityholder Late Consent Fee, irrespective of whether such Securityholder has delivered an Ineligible Securityholder Instruction, or abstained from voting in respect, or voted in favour of the Extraordinary Resolution.
3. BACKGROUND
On 16 November 2020, the United Kingdom Prudential Regulation Authority ("PRA") sent a "Dear CFO" letter to all major UK deposit takers requesting all firms to take steps to remediate the prudential treatment of legacy instruments. The Existing Preference Shares were historically counted as Tier 1 capital but ceased to be eligible to be counted as Tier 1 capital at the end of the CRR transition period on 31 December 2021.
At the time, there was a risk that, if the Existing Preference Shares counted as regulatory Tier 2 Capital but maintained a legal ranking pari passu with Additional Tier 1 Capital, an infection risk would be created in respect of the Issuer's then existing Additional Tier 1 Capital securities.
As a result, and as per the announcements relating to the Existing Preference Shares made on 10 November 2021[1], the Group classified the Existing Preference Shares as ineligible for regulatory capital purposes, while the legal ranking of the Existing Preference Shares was left unchanged, ranking pari passu with Additional Tier 1 Capital. However, at the time of the announcements, the Group also reserved the right to review such classification in future, to the extent permitted by applicable law and regulation.
Aside from the Securities, all of the Issuer's other additional tier 1 issuances which are expected to be outstanding as at 1 July 2026 (the "LBG AT1 Securities") contain identical subordination provisions (the "Recent AT1 Subordination Provisions"), which differ from the subordination provisions currently contained in the Conditions. Under the Recent AT1 Subordination Provisions, the Issuer is permitted, in its sole discretion, to subordinate the LBG AT1 Securities to (i) the Existing Preference Shares of the Issuer and (ii) any securities of the Issuer ranking or expressed to rank pari passu with any of the Existing Preference Shares in a winding-up of the Issuer (the "Pari Passu Securities"). This is contingent upon the Issuer determining that the LBG AT1 Securities would not be included in the Additional Tier 1 Capital (as defined below) of the Group (as defined below) unless the holders of some or all of the Existing Preference Shares and any Pari Passu Securities are ranked senior to such LBG AT1 Securities, including as a result of the Issuer electing to treat the Existing Preference Shares as Tier 2 Capital. It is proposed that the Conditions be amended to align the subordination provisions of the Securities with the Recent AT1 Subordination Provisions.
"Existing Preference Shares" means the 9.25% preference shares (ISIN GB00B3KS9W93), the 6.413% preference shares (ISIN USG5533WAA56/US539439AC38), the 6.657% preference shares (ISIN US539439AE93/US539439AF68) and the 9.75% preference shares (ISIN GB00B3KSB238), each issued by the Issuer.
If the Extraordinary Resolution is passed and implemented, the Issuer intends to reclassify the Existing Preference Shares as Tier 2 Capital from 1 July 2026, increasing the Tier 2 Capital of the Group by c.£400m.
This Proposal would reduce the amount of legacy instruments that do not count as own funds in line with the Bank of England's resolution planning objectives. The changes to the Conditions contemplated in the Proposal have been reviewed by the PRA, who have provided confirmation of no objection in relation to the Proposal.
It should be noted, that following the redemption of the Issuer's $500m 6.75% AT1 Securities callable in June 2026 (the notice for the redemption of which was issued on 30 April 2026), the Securities will be the only outstanding additional tier 1 issuance of the Issuer without the inclusion of the Recent AT1 Subordination Provisions. The Securities remain callable at the Issuer's discretion in June 2029, subject to the satisfaction of certain conditions. Therefore, in the event the Extraordinary Resolution does not pass, the classification of the Existing Preference Shares is one of the factors that the Issuer will consider alongside the review of any potential optional redemption of the Securities at a future date.
Rating Agencies
A copy of the draft Consent Solicitation Memorandum has been provided to each of Fitch Ratings Limited, Moody's Investors Service Ltd. and S&P Global Ratings UK Limited. The Issuer is not expecting any change to the ratings of the Securities as a result of the Extraordinary Resolution being implemented.
4. Indicative timetable for the consent solicitation
This is an indicative timetable showing one possible outcome for the timing of the Consent Solicitation based on the dates in the Consent Solicitation Memorandum and assuming that the Meeting is not adjourned. This timetable is subject to change and dates and times may be extended or amended by the Issuer in accordance with the terms of the Consent Solicitation as described in the Consent Solicitation Memorandum. Accordingly, the actual timetable may differ significantly from the timetable below.
|
Date |
|
Action |
|
11 May 2026 |
|
Announcement of Consent Solicitation |
|
|
|
Notice of Meeting delivered to Clearing Systems for communication to Direct Participants and published via Euronext Dublin. |
|
|
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Consent Solicitation Memorandum and draft Supplemental Trust Deed available from the Tabulation Agent. From this date, the relevant Securityholders may arrange for the relevant Securities held by Clearstream, Luxembourg and/or Euroclear in their accounts to be blocked in such accounts and held to the order and under the control of the Registrar in order to obtain form of proxy or give valid Electronic Voting Instructions. |
|
22 May 2026 4:00 p.m., London time |
|
Early Instruction Deadline |
|
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Deadline for receipt by the Tabulation Agent of valid Electronic Voting Instructions from Eligible Securityholders in favour of the Extraordinary Resolution for such Eligible Securityholders to be eligible to receive the Early Consent Fee. |
|
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Deadline for receipt by the Tabulation Agent of valid Ineligible Securityholder Instructions from Ineligible Securityholders abstaining from voting in respect of the Extraordinary Resolution for such Ineligible Securityholders to be eligible to receive the Ineligible Securityholder Early Consent Fee. |
||
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29 May 2026 10:00 a.m., London time |
|
Expiration Deadline Deadline for receipt by the Tabulation Agent of all Electronic Voting Instructions in order for Securityholders to be able to participate in the Consent Solicitation. Deadline for receipt by the Tabulation Agent of valid Electronic Voting Instructions from Eligible Securityholders in favour of the Extraordinary Resolution for such Eligible Securityholders to be eligible to receive the Late Consent Fee. Deadline for receipt by the Tabulation Agent of valid Ineligible Securityholder Instructions from Ineligible Securityholders abstaining from voting in respect of the Extraordinary Resolution for such Ineligible Securityholders to be eligible to receive the Ineligible Securityholder Late Consent Fee. Deadline for making any other arrangements to attend or be represented at the Meeting. |
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2 June 2026 10:00 a.m., London time |
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Meeting Meeting to be held at the offices of Clifford Chance LLP at 10 Upper Bank Street, London E14 5JJ, United Kingdom. |
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As soon as reasonably practicable after the Meeting |
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Announcement of the results of the Meeting Announcement of the results of the Meeting and, if the Extraordinary Resolution has been passed, whether the Eligibility Condition has been satisfied. |
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|
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Such announcement to be published via Euronext Dublin and delivered to the Clearing Systems. |
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As soon as reasonably practicable after the Meeting |
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Implementation Date |
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If the Extraordinary Resolution is passed and the Eligibility Condition is satisfied, the Supplemental Trust Deed will be executed. |
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Expected to be no later than the fifth Business Day immediately following the Implementation Date |
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Fee Payment Date |
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Expected date for payment by the Issuer of the Early Consent Fee, the Late Consent Fee, the Ineligible Securityholder Early Consent Fee and/or the Ineligible Securityholder Late Consent Fee, in the event that the Extraordinary Resolution is successfully passed and the Eligibility Condition is satisfied. |
Securityholders are advised to check with any bank, securities broker or other intermediary through which they hold Securities when such intermediary would require to receive instructions from a Securityholder in order for that Securityholder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Consent Solicitation before the deadlines specified above. The deadlines set by any such intermediary and each Clearing System for the submission of Electronic Voting Instructions will be earlier than the relevant deadlines specified above.
Capitalised terms used but not defined herein shall have the meanings set out in the Consent Solicitation Memorandum.
Further information relating to the Consent Solicitation can be obtained directly from the Solicitation Agent and the Tabulation Agent:
|
Lloyds Bank Corporate Markets plc 33 Old Broad Street London EC2N 1HZ United Kingdom
Telephone number: +44 20 7158 1726 / 1719 Attention: Liability Management |
Kroll Issuer Services Limited The News Building 3 London Bridge Street London SE1 9SG United Kingdom
Telephone: +44 20 7704 0880 Email: lloyds@is.kroll.com Attention: Owen Morris Website: https://deals.is.kroll.com/lloyds |
DISCLAIMER: This announcement must be read in conjunction with the Consent Solicitation Memorandum. The Consent Solicitation Memorandum contains important information which should be read carefully before any decision is made with respect to the Consent Solicitation. If any Securityholder is in any doubt as to the action it should take, it is recommended to seek its own financial, legal and investment advice, including as to any tax consequences, from its appropriately authorised stockbroker, bank manager, solicitor, accountant and/or independent financial adviser. Any individual or company whose Securities are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to participate in the Consent Solicitation or otherwise participate in the Meeting (including any adjourned Meeting).
The distribution of this announcement and the Consent Solicitation Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and the Consent Solicitation Memorandum come are required to inform themselves about, and to observe, any such restrictions. The Solicitation Agent and the Tabulation Agent do not accept any responsibility for the contents of this announcement or the Consent Solicitation Memorandum.
[1] ISIN GB00B3KS9W93 and ISIN GB00B3KSB238: https://otp.tools.investis.com/clients/uk/lloyds_banking_group_plc3/rns/regulatory-story.aspx?cid=1273&newsid=1525054
ISIN USG5533WAA56/US539439AC38 and ISIN US539439AE93/US539439AF68: https://otp.tools.investis.com/clients/uk/lloyds_banking_group_plc3/rns/regulatory-story.aspx?cid=1273&newsid=1525055
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