Lloyd’s to Buy Back $151.7 Million of Debt Securities

May 1, 2009

Lloyd’s announced that it will repurchase the local currency equivalent of £102 million ($151.67 million) of its outstanding debt securities, following its invitation to holders to submit offers to sell their holdings. Lloyd’s had offered to purchase up to £100 million ($148.7 million) of the securities.

Lloyd’s said it “will purchase a principal amount of £59,631,000 [$88.69 million] of its Perpetual Subordinated Capital Securities at a cost of £35,778,600 [$53.21 million] and a principal amount of €47,315,000 [$70.5 million] of its Subordinated Notes maturing in 2024 at a cost of €33,120,500 [$49.35 million]. Lloyd’s will additionally pay accrued interest on the purchased securities.

“Following these purchases, £440,369,000 [$656.2 million] principal amount of the Perpetual Subordinated Capital Securities and €252,685,000 [$376.62 million] of the Subordinated Notes maturing in 2024 will remain outstanding,” said the announcement.

“Lloyd’s will not purchase any of its sterling [£] Subordinated Notes maturing in 2025 as a result of the invitation and the outstanding principal amount of these securities will remain at £300,000,000 [$447 million].”

Luke Savage, Lloyd’s Finance Director, explained: “The decision to buy back some of our debt was a prudent move, which took advantage of our strong capital position, favorable market conditions, and perceived interest from holders of our debt.”

Lloyd’s also stated that its “record level of capital” as of January 1 2009, “as well as additional contributions to Lloyd’s Central Fund in April, means that “Lloyd’s capital position will not be materially affected following these purchases.

“In aggregate, the value of Lloyd’s central assets, excluding the callable layer and the liability in respect of the subordinated debt and securities, amounted to £2.072 billion [$3.085 billion] at December 2008. Central assets include the assets of the Central Fund and the other assets of the Corporation.”

Source: Lloyd’s – www.lloyds.com

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