Bloomberg News

Lloyds Junior Bonds Rise as U.K. Bank Surprises Morgan Stanley

March 01, 2013

Lloyds Banking Group Plc (LLOY) junior bonds rose after the partially state-owned U.K. lender exercised an option to redeem 1 billion euros ($1.3 billion) of notes.

Morgan Stanley analysts said yesterday they were “surprised” that Lloyds redeemed the bonds, the lender’s first such move since 2009. They said that, while “cautious” about Lloyds’s more junior Tier 1 securities, they recommended buying its outstanding lower Tier 2 bonds.

The price of the 5.625 percent lower Tier 2 notes that Lloyds will redeem at face value on March 5 jumped to 99.6 cents on the euro as of 8:25 a.m. in London, from 96.9 at the end of last week, according to prices compiled by Bloomberg. The lender’s 750 million euros of 4.375 percent senior subordinated notes due 2019 with a call next year jumped to 97.4 from 94.6.

Lloyds’s sterling-denominated bonds with calls also rose. Its 750 million pounds ($1.1 billion) of senior subordinated notes due 2020 with a redemption option five years before that increased to 102.6 from 100.8, Bloomberg prices show.

Lloyds, Britain’s biggest mortgage lender, reported a full- year loss of 1.43 billion pounds today after setting aside money to compensate customers wrongly sold loan insurance.

To contact the reporter on this story: Esteban Duarte in Madrid at

To contact the editor responsible for this story: Paul Armstrong at

Toyota's Hydrogen Man
blog comments powered by Disqus