Updated AT1 Consent Solicitation Announcement
FOR DISTRIBUTION ONLY OUTSIDE THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS TO PERSONS OTHER THAN "U.S. PERSONS" (AS DEFINED IN REGULATION S OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")). NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS DOCUMENT.
30 October 2020
LLOYDS BANKING GROUP PLC
(incorporated in Scotland with limited liability under registered number 95000)
Legal Entity Identifier (LEI: H7FNTJ4851HG0EXQ1Z70)
(the "Issuer")
NOTICE
to the holders of the
£1,494,392,000 7.625 per cent. Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities Callable 2023 (ISIN: XS1043552188) (the "PNC9 Securities")
£750,009,000 7.875 per cent. Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities Callable 2029 (ISIN: XS1043552261) (the "PNC15 Securities") (each a "Series" and together the "Securities", and the holders thereof, the "Securityholders") of the Issuer presently outstanding.
The Issuer has today given a Notice in respect of the Securities for the purpose of soliciting consent from the Securityholders to the modification of the terms and conditions (the "Conditions") of the relevant Series and consequential or related amendments to the transaction documents for the relevant Series of Securities such that (i) the Reset Reference Rate (as defined in the relevant Conditions) ceases to be a London Inter Bank Offered Rate ("LIBOR") linked mid-swap rate and becomes a Sterling Overnight Index Average ("SONIA") linked mid-swap rate; (ii) an adjustment (the "Reset Reference Rate Adjustment") is made to reflect the economic difference between the LIBOR and SONIA rates; and (iii) the Margin (as defined in the relevant Conditions) applicable to each Series of Securities remains unaltered; (iv) the fallbacks relating to the Reset Reference Rate are amended; and (v) new fallbacks are included in case a Benchmark Event (as defined in the Updated Consent Solicitation Memorandum) occurs with respect to the Reset Rate of Interest, as proposed by the Issuer for approval by a separate extraordinary resolution of the holders of each such Series (each an "Extraordinary Resolution"), all as further described in the updated consent solicitation memorandum dated 30 October 2020 (the "UpdatedConsent Solicitation Memorandum") (each such invitation an "Updated Consent Solicitation").
On 29 September 2020 the Issuer launched its consent solicitation in respect of the Securities in order to present a proposal to Securityholders to implement the transition to SONIA (the "Original Securityholder Proposal"). The Issuer is launching this Updated Consent Solicitation following its decision to modify the Original Securityholder Proposal. Securityholders should note that any electronic voting instructions cast in respect of the Original Securityholder Proposal will not be valid in respect of the Updated Consent Solicitation and any Securities blocked pursuant to such electronic voting instructions have been unblocked.
The Proposed Amendments as set out in the Updated Consent Solicitation Memorandum are identical to the proposed amendments set out in the Original Securityholder Proposal save in respect of the calculation of the Reset Reference Rate Adjustment and consequential adjustment to the definitions of "Adjusted Reset Reference Rate" and "Reset Reference Rate Adjustment", as more particularly outlined in the Updated Consent Solicitation Memorandum.
In light of the ongoing developments in relation to coronavirus (COVID-19), and current guidance issued by the UK government, it may become impossible or inadvisable to hold each relevant Meeting at a physical location. Accordingly, in accordance with the provisions of the relevant Trust Deed the Issuer has requested that the Trustee prescribe appropriate regulations regarding the holding of the relevant Meeting via teleconference.
1. Notice of meetingS in respect of the SECURITIES
The Notice will be available for viewing at the Issuer's website:
https://www.lloydsbankinggroup.com/investors/fixed-income-investors/consent-solicitation/
2. Indicative timetable for the updated consent solicitation
Set out below is an indicative timetable showing one possible outcome for the timing of the Updated Consent Solicitations, which will depend, among other things, on timely receipt (and non revocation) of instructions, the rights of the Issuer (where applicable) to extend, waive any condition of, amend and/or terminate either Updated Consent Solicitation (other than the terms of the relevant Extraordinary Resolution) as described in the Updated Consent Solicitation Memorandum and the passing of each Extraordinary Resolution at the initial Meeting for the relevant Series. Accordingly, the actual timetable may differ significantly from the timetable below.
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Date/Time |
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Action |
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30 October 2020 (At least 21 clear days before the Meeting) |
1. |
Notice to be delivered to the Clearing Systems. Release of the Notice through the regulatory news service of the London Stock Exchange. |
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Copies of the Updated Consent Solicitation Memorandum to be available from the Tabulation Agent and the Securityholder Information (as defined in the Notice) to be available for inspection, as indicated, at the specified office of the Principal Paying and Conversion Agent and on the website of the Issuer (https://www.lloydsbankinggroup.com/investors/fixed-income-investors/consent-solicitation ) (the "Issuer's Website"). From this date, Securityholders may arrange for 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 Principal Paying and Conversion Agent in order to obtain a form of proxy or give valid Consent Instructions or Ineligible Holder Instructions, to the Tabulation Agent. |
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By 10 a.m.(London time) (11 a.m. CET) on 20 November 2020 (At least 48 hours before the Meeting) |
2. |
Expiration Deadline. Final time by which Securityholders have arranged for: (i) obtaining a form of proxy from the Principal Paying and Conversion Agent in order to attend (via teleconference) and vote at the relevant Meeting; or (ii) receipt by the Tabulation Agent of valid Consent Instructions or Ineligible Holder Instructions in accordance with the procedures of Clearstream, Luxembourg and/or Euroclear. |
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3. |
Final time by which Securityholders have given notice to the Tabulation Agent (via the relevant Clearing Systems) of any intended revocation of, or amendment to, Consent Instructions or Ineligible Holder Instructions previously given by them. |
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10 a.m. (London time) (11 a.m. CET) on 23 November 2020 |
4. |
SECURITYHOLDERS' MEETING HELD The initial Meeting in respect of: (i) the PNC9 Securities will commence at 10.00 a.m. (London time) (11.00 a.m. CET); and (ii) the PNC15 Securities will commence at 10.15 a.m. (London time) (11.15 a.m. CET) or after the completion of the PNC9 Securities Meeting (whichever is later). |
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If the relevant Extraordinary Resolutions are passed at the relevant Meeting: |
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As soon as reasonably practicable after the Meetings |
5. |
Announcement of the results of the Meetings and, if the relevant Extraordinary Resolution is passed, satisfaction (or not) of the Eligibility Condition. Delivery of notice of such results to Euroclear and Clearstream, Luxembourg for communication to their account holders and an announcement released on the regulatory news service of the London Stock Exchange. |
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At or around 2 p.m. (London time) (3 p.m. CET) on 23 November 2020 (the "Pricing Date") |
6. |
Pricing Time and Pricing Date Solicitation Agent to determine the relevant Reset Reference Rate Adjustment in respect of each Series. A pricing announcement will be delivered through the Clearing Systems and released through the regulatory news service of the London Stock Exchange as soon as practicable following the Pricing Time on the Pricing Date. |
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23 November (the "Effective Date") |
7. |
If the relevant Extraordinary Resolution is passed at the relevant initial Meeting (or at a subsequent adjourned Meeting) and the Eligibility Condition is satisfied, the relevant Supplemental Trust Deed will be executed by the Issuer and the Trustee and the modifications to the Conditions of the relevant Series described in the Updated Consent Solicitation Memorandum will be implemented with effect on and from 23 November 2020 (the "Effective Date") |
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If a quorum is not achieved at a Meeting or the quorum is achieved and the relevant Extraordinary Resolution is passed but the Eligibility Condition is not satisfied, such Meeting shall be adjourned and the adjourned Meeting of Securityholders for that Series will be held at a date as will be notified to the Securityholders in the notice of the adjourned Meeting. The adjourned Meeting will be held in accordance with the terms of the relevant Trust Deed. If the relevant Extraordinary Resolution is passed at the adjourned Meeting and the Eligibility Condition is satisfied in respect of the relevant Series, the relevant Supplemental Trust Deed will be executed by the Issuer and the Trustee and the modifications with respect to such Series described in the Updated Consent Solicitation Memorandum will be implemented on the Effective Date. |
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Securityholders are advised to check with any bank, securities broker or other intermediary through which they hold Securities when such intermediary would need to receive instructions from a Securityholder in order for that Securityholder to be able to participate in, or revoke their instruction to participate in, the relevant Updated Consent Solicitation before the deadlines specified above. The deadlines set by any such intermediary and each Clearing System for the submission and revocation of Consent Instructions may be earlier than the relevant deadlines specified above.
No consent fee will be payable in connection with the Updated Consent Solicitations.
Capitalised terms used but not defined herein shall have the meanings set out in the Updated Consent Solicitation Memorandum.
Further information relating to the Updated Consent Solicitation can be obtained directly from the Solicitation Agent and the Tabulation Agent:
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Lloyds Bank Corporate Markets plc 10 Gresham Street London EC2V 7AE United Kingdom Telephone: +44 20 7158 1719/1726 Attention: Liability Management Team Email: liability.management@lloydsbanking.com |
Lucid Issuer Services Limited Tankerton Works 12 Argyle Walk London WC1H 8HA United Kingdom Telephone: +44 20 7704 0880 Attention: Arlind Bytyqi Email: lloydsbank@lucid-is.com |
DISCLAIMER: This announcement must be read in conjunction with the Updated Consent Solicitation Memorandum. The Updated Consent Solicitation Memorandum contains important information which should be read carefully before any decision is made with respect to the Updated Consent Solicitation. If any Securityholder is in any doubt as to the action it should take or is unsure of the impact of the implementation of the relevant Extraordinary Resolution, it is recommended to seek its own financial and legal advice, including in respect of any tax consequences, immediately from its broker, bank manager, solicitor, accountant, independent financial, tax or legal 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 Updated Consent Solicitation or otherwise participate in the relevant Meeting.
The distribution of the Updated Consent Solicitation Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession the Updated Consent Solicitation Memorandum comes are required to inform themselves about, and to observe, any such restrictions.
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