Lloyd’s Sets Terms for $943 Million Debt Issue

November 11, 2004

Lloyd’s has set the terms for its subordinated debt issue, following a successful presentation to potential investors. “The transaction met with a very positive response from a wide range of quality institutional investors in the UK and continental Europe following an extensive road show and was several times oversubscribed,” said the bulletin.

First announced in October (See IJ Website, Oct. 18), the issue will consist of a “sterling tranche” of £300 million ($555 million) which will carry a coupon of 6.875 percent – 207 basis points over the reference gilt – and a “second tranche” of 300 million euros ($388 million) with a coupon of 5.625 percent – 172 basis points over the reference mid swap rate. The sterling tranche will have a final maturity in November 2025 callable from November 2015 and the euro tranche will have a final maturity in November 2024 callable from November 2014.

Lloyd’s Chief Executive, Nick Prettejohn commented: “This has been a very successful transaction for Lloyd’s. Investors were positive about Lloyd’s underlying financial strength, and the progress achieved by our market over recent years. The success of this issue will further support Lloyd’s competitive position, by helping to create a long-term robust and flexible capital structure for the Society. This is a further vote of confidence in Lloyd’s and highlights the continuing strength of this market.”

Application has been made to list the notes on the London Stock Exchange. Settlement of the issue is expected on November 17 2004.

The notes have been assigned a rating of BBB+ by Fitch and a preliminary rating of BBB+ by Standard and Poor’s and bbb+ by A.M. Best. All the ratings carry stable outlooks.

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