Lloyd's Sets ?500M Debt Issue Terms

Lloyd's Sets ?500M Debt Issue Terms

NU Online News Service, Nov. 11, 10:52 a.m. EST?Lloyd's announced yesterday that it has set the financial terms for a subordinated debt issue, worth about U.S. $923 million, designed to further strengthen Lloyd's long-term capital structure.[@@]

The ?500 subordinated debt issue, first announced Oct. 13, was described by Lloyd's Chief Executive Nick Prettejohn as "a very successful transaction."

"Investors were positive about Lloyd's underlying financial strength, and the progress achieved by our market over recent years," Mr. Prettejohn said. "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."

The transaction outcome, he said, "is a further vote of confidence in Lloyd's and highlights the continuing strength of this market."

Lloyd's observed that its subordinated debt issue received "a very positive response from a wide range of quality institutional investors in the U.K. and continental Europe" during an extensive, successful road show and was oversubscribed several times.

The debt issue will consist of a sterling tranche?a class of bonds with various maturities?of ?300 million ($552,425,262), which will carry a coupon of 6.875 percent, and a second tranche of ?300 million ($387,181,165) with a coupon of 5.625 percent.

The notes have been assigned a "triple-B-plus" rating by A.M. Best and Fitch, as well as a preliminary "triple-B-plus" rating by Standard and Poor's, with all ratings carrying "Stable" outlooks.