Euro Senior Notes Exchange Offer

RNS Number : 6590N

Lloyds Banking Group PLC

27 October 2016

 

NOT FOR DISTRIBUTION TO ANY U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED) ("U.S. PERSON") OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS), ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA (TOGETHER, THE "UNITED STATES").

(SEE "OFFER RESTRICTIONS" BELOW)

LLOYDS BANK PLC ANNOUNCES INVITATIONS TO EXCHANGE CERTAIN OF ITS EURO DENOMINATED SENIOR NOTES (THE "EXISTING NOTES") FOR SPECIFIED SERIES OF SENIOR NOTES ("NEW NOTES") TO BE ISSUED BY LLOYDS BANKING GROUP PLC ("LBG")

27 October 2016

On the terms of and subject to the conditions contained in an exchange offer memorandum dated 27 October 2016 (the "Exchange Offer Memorandum"), Lloyds Bank plc (the "Offeror") has today invited all Holders (subject to the Offer Restrictions referred to below) of:

·   The Euro Existing Notes set out under the heading "Euro Exchange Offer A" below to Offer to Exchange such Euro Existing Notes, which are outstanding, for up to €1,500,000,000 Euro A New Notes (the "Euro Exchange Offer A");

·   The Euro Existing Notes set out under the heading "Euro Exchange Offer B" below to Offer to Exchange such Euro Existing Notes, which are outstanding, for up to €1,500,000,000 Euro B New Notes (the "Euro Exchange Offer B" and, together with Euro Exchange Offer A, the "Exchange Offers" and each an "Exchange Offer").

Capitalised terms not otherwise defined in this announcement have the same meaning as assigned to them in the Exchange Offer Memorandum. The Exchange Offer Memorandum is available from the Exchange Agent.

THE EXCHANGE OFFER

The Existing Notes

The tables below identify the Series of Existing Notes which are subject to the Exchange Offers and the Exchange Priority for each Exchange Offer.

Holders may only Offer to Exchange their Existing Notes for the Series of New Notes specified in the column of the relevant table headed "Eligible Series of New Notes" and at the relevant Exchange Price. The Offeror will pay to Holders, or procure payment to Holders of, in respect of their Existing Notes which are accepted for exchange, an Accrued Interest Payment and a Cash Rounding Amount (if applicable) as set out in the Exchange Offer Memorandum on the relevant Settlement Date.

Each of the Exchange Offers will be treated independently by the Offeror.

Euro Exchange Offer A

ISIN	Issuer	Coupon (%)	Amount Outstanding	Maturity Date	Relevant Exchange Spread	Exchange Price (%)	Eligible Series of New Notes	Acceptance Priority Level
XS1304487710	Lloyds Bank plc	3 month EURIBOR +0.50% per annum Floating Rate	€750,000,000	9 October 2018	n/a	100.75	Euro A New Notes	1
XS1219428957	Lloyds Bank plc	0.625	€1,000,000,000	20 April  2020	+10 basis points	To be determined as set out in the Exchange Offer Memorandum and announced on the relevant Results Announcement Date		2
XS0980066996	Lloyds Bank plc	1.875	€1,000,000,000	10 October 2018	+0 basis points	To be determined as set out in the Exchange Offer Memorandum and announced on the relevant Results Announcement Date		3
XS1109333986	Lloyds Bank plc	3 month EURIBOR +0.45% per annum Floating Rate	€1,350,000,000	10 September 2019	n/a	101.00		4
XS0449361350	Lloyds Bank plc	5.375	€1,062,350,000	3 September 2019	+0 basis points	To be determined as set out in the Exchange Offer Memorandum and announced on the relevant Results Announcement Date		5

Euro Exchange Offer B

ISIN	Issuer	Coupon (%)	Amount Outstanding	Maturity Date	Relevant Exchange Spread	Exchange Price (%)	Eligible Series of New Notes	Acceptance Priority Level
XS1167204699	Lloyds Bank plc	1.250	€1,250,000,000	13 January 2025	+30 basis points	To be determined as set out in the Exchange Offer Memorandum and announced on the relevant Results Announcement Date	Euro B New Notes	1
XS1139091372	Lloyds Bank plc	1.000	€1,500,000,000	19 November 2021	+25 basis points			2
XS1280783983	Lloyds Bank plc	1.375	€1,250,000,000	8 September 2022	+30 basis points			3

The New Notes

The table below identifies certain key characteristics of the New Notes to be issued by LBG pursuant to the Exchange Offers.

Eligible Existing Notes	New Notes	Issuer	Relevant New Notes Spread	Currency	Maturity Date	Minimum New Issue Size	Maximum New Issue Size
Euro Exchange Offer A	Euro A New Notes	Lloyds Banking Group plc	+80 basis points	EUR	9 November 2021	€500,000,000	€1,500,000,000
Euro Exchange Offer B	Euro B New Notes	Lloyds Banking Group plc	+90 basis points	EUR	9 November  2023	€500,000,000	€1,500,000,000

The New Notes will be in bearer form in denominations of €100,000 and integral multiples of €1,000 in excess thereof, and will initially be issued in global form.

Applications are intended to be made to the Financial Conduct Authority under Part VI of the Financial Services and Markets Act 2000 for each Series of New Notes to be admitted to the Official List of the UK Listing Authority and to the London Stock Exchange plc for each Series of New Notes to be admitted to trading on the London Stock Exchange's regulated market. The London Stock Exchange's regulated market is a regulated market for the purposes of the Markets in Financial Instruments Directive (Directive 2004/39/EC). Such admission is expected to occur on the relevant Settlement Date.

Further details of the New Notes are set out in the Exchange Offer Memorandum.

Rationale for the Exchange Offers

The Offeror is undertaking the Exchange Offers in order to provide the Holders of the Existing Notes with an opportunity to exchange their Existing Notes for New Notes. The Exchange Offers are expected to complete the Group's funding plans in core funding markets in 2016.

Concurrently with the Exchange Offers, the Offeror has separately offered to purchase for cash certain U.S. dollar denominated notes issued by the Offeror pursuant to the Global U.S. Dollar Tender Offer.

Offers to Exchange

Holders of Existing Notes should refer to the detailed terms of the Exchange Offer Memorandum in order to ascertain how to validly Offer to Exchange their Existing Notes in accordance with the terms of the relevant Exchange Offer(s) and the requirements of the relevant Clearing System(s).

Notwithstanding any other provision of the Exchange Offer Memorandum, whether the Offeror accepts Offers to Exchange from Holders is at its sole and absolute discretion and the Offeror may decide not to accept Offers to Exchange for any reason.

Holders whose Existing Notes Offered for Exchange are not accepted, or who do not participate in the relevant Exchange Offer, will not be eligible to receive New Notes in exchange for such Existing Notes and shall continue to hold such Existing Notes subject to their terms and conditions.

None of the Offeror, the Joint Dealer Managers, the Trustee or the Exchange Agent (or their respective directors, employees or affiliates) makes any representation or recommendation whatsoever regarding the Exchange Offer Memorandum or the Exchange Offers, or any recommendation as to whether Holders of Existing Notes should participate in the Exchange Offers.

Minimum Offer Amount

No Offer to Exchange Existing Notes of a Series will be accepted by the Offeror unless such Offer to Exchange Existing Notes (after the application of the relevant Exchange Priority and any pro-ration of Offers to Exchange) relates to an aggregate principal amount of the Existing Notes such that a Holder of the Existing Notes is eligible to receive a principal amount of New Notes of at least €100,000 (the "Minimum Offer Amount"). Where a Holder submits an exchange instruction in respect of a principal amount of Existing Notes of less than the Minimum Offer Amount, such Holder's exchange instruction will be rejected. Exchange Instructions must also be submitted in an aggregate principal amount of at least the relevant minimum denomination for the relevant Series of Existing Notes.

Minimum and Maximum New Issue Size

Each Exchange Offer is conditional upon receiving valid Offers to Exchange that, if and when accepted, would result in LBG issuing New Notes of the relevant Series satisfying the relevant Minimum New Issue Size Condition (the Minimum New Issue Size being as set out in the column entitled "Minimum New Issue Size" of the table set out under the heading "The New Notes" above).

The Exchange Offers are not inter-conditional and the Offeror may proceed with any Exchange Offer where the Minimum New Issue Size Condition has been satisfied irrespective of whether or not the Minimum New Issue Size Condition has been satisfied in respect of the other Exchange Offer. If the Minimum New Issue Size Condition for a Series of New Notes is not satisfied, the Offeror reserves the right (at its sole discretion) to waive such Minimum New Issue Size Condition or reduce the Minimum New Issue Size and to proceed with the relevant Exchange Offer.

The aggregate principal amount of New Notes of a particular Series to be issued will be capped at the relevant Maximum New Issue Size (as set out in the column entitled "Maximum New Issue Size" of the table set out under the heading "The New Notes" above).

The Offeror reserves the right (in its sole discretion) to increase, decrease or waive each specific Maximum New Issue Size. Further New Notes of the same or different series may be issued in the future for cash or otherwise.

The Maximum New Issue Size applicable to each Exchange Offer is independent from those set for the other Exchange Offers.

Exchange Ratio

The aggregate principal amount of the relevant Series of New Notes that each Holder whose Existing Notes are accepted for exchange pursuant to the relevant Exchange Offer will receive on the relevant Settlement Date will be determined pursuant to the Exchange Ratio applicable to such Holder's Series of Existing Notes.

The Exchange Ratio applicable to a Series of Existing Notes will be calculated as the ratio (rounded down to six decimal places) resulting from the division of the relevant Exchange Price for such Series of Existing Notes by the relevant New Notes Issue Price. A Holder who validly Offers to Exchange its Existing Notes at or prior to the Expiration Time and whose Offer to Exchange is accepted will receive relevant New Notes in an amount (rounded down to the nearest €1,000) equal to the aggregate principal amount of such Existing Notes accepted for exchange multiplied by the relevant Exchange Ratio.

Exchange Price

The Exchange Price for each Series of Fixed Rate Existing Notes (expressed as a percentage) will be determined at the Price Determination Time on the Price Determination Date by reference to the relevant Exchange Spread and announced on the Results Announcement Date. The Exchange Price for each Series of Floating Rate Existing Notes is set out in the table under "Details of the Existing Notes -Euro Exchange Offer A" above.

The Exchange Price will determine the aggregate principal amount of the relevant Series of New Notes that each Holder whose Existing Notes are accepted for exchange pursuant to the relevant Exchange Offer will receive on the relevant Settlement Date.

New Notes Pricing

The relevant New Notes Yield and the relevant New Notes Coupon for each Series of New Notes and the Exchange Ratio for each Series of Existing Notes and relevant Series of New Notes will be announced on the Results Announcement Date.

The relevant New Notes Issue Price and relevant New Notes Coupon will be calculated in accordance with market convention and the relevant New Notes Issue Price will be as close as possible to 100 per cent. of the principal amount of the relevant New Notes, allowing for rounding down of the relevant New Notes Coupons to the nearest 0.125 per cent. and the relevant New Notes Issue Price up to the nearest 0.001 per cent., in accordance with market convention.

Exchange Ratio, Accrued Interest Payments and Cash Rounding Amounts

Holders who validly Offer to Exchange their Existing Notes at or prior to the Expiration Time and whose Offers to Exchange are accepted will receive New Notes of the relevant Series in an amount (rounded down to the nearest €1,000) equal to the aggregate principal amount of such Existing Notes accepted for exchange multiplied by the relevant Exchange Ratio, subject to the requirement for each Holder to exchange at least the relevant Minimum Offer Amount.

Each such Holder will also be entitled to receive any Cash Rounding Amount (if any) and any applicable Accrued Interest Payments in respect of their Existing Notes so accepted for exchange.

Acceptance Priority Level and Scaling

The "Acceptance Priority Level" is the relative ranking of a Series of Existing Notes in the relevant numerical order of acceptance priority for each Series of Existing Notes in an Exchange Offer (the "Exchange Priority").

The maximum aggregate principal amount of each Series of Existing Notes that may be accepted for exchange by the Offeror in any Exchange Offer will be based on the relevant Exchange Ratio, the Maximum New Issue Size for the relevant Exchange Offer and the Exchange Priority set out in the column entitled "Acceptance Priority Level" in each table set out under the heading "The Existing Notes" above (in each case, with the Existing Notes that are ascribed Acceptance Priority Level "1" having the highest priority for acceptance).

Upon expiration of the relevant Exchange Offer Period, the Offeror may (but has no obligation to Holders to) accept Offers to Exchange in the relevant Exchange Offer, in which case such Offers to Exchange will be accepted in accordance with the Exchange Priority for the relevant Exchange Offer. The Offeror intends to accept Offers to Exchange in accordance with the relevant Exchange Priority for the relevant Exchange Offer until either (i) it has accepted all of the Existing Notes validly offered and eligible for exchange or (ii) the aggregate principal amount of the relevant Series of New Notes to be issued in exchange for Existing Notes is the maximum such amount that can be issued without exceeding the relevant Maximum New Issue Size, all in accordance with the relevant Exchange Priority.

Where the acceptance in accordance with the relevant Exchange Priority of all valid Offers to Exchange of a Series of Existing Notes in the relevant Exchange Offer would require a greater aggregate principal amount of the relevant Series of New Notes to be issued than the relevant Maximum New Issue Size, the Offeror will accept Offers to Exchange in respect of the Series of Existing Notes with the lowest ranking Acceptance Priority Level that is being accepted for exchange on a pro-rata basis, as described in the Exchange Offer Memorandum, and the Offeror will not accept any Offers to Exchange in respect of any Series of Existing Notes with a lower ranking Acceptance Priority Level in the relevant Exchange Priority than that Series of Existing Notes.

The Exchange Priority applicable to each Exchange Offer is independent from those set for the other Exchange Offer.

INDICATIVE TIMETABLE

The following table sets out the expected dates and times of the key events relating to the Exchange Offers. This is an indicative timetable and is subject to change.

Date and Time	Action
27 October 2016	Commencement of the Exchange Offers Exchange Offers announced through RNS announcement and may also be made by announcement on the relevant Reuters International Insider Screen, publication on a Notifying News Service and by delivery to the Clearing Systems. Exchange Offer Memorandum available from the Exchange Agent.
4.00 p.m. (London time) on 4 November 2016	Expiration Deadline Deadline for receipt of all Electronic Instruction Notices. End of the Exchange Offer Period.
Prior to the Price Determination Time on 7 November 2016 being the Business Day following the Expiration Date (the "Price Determination Date")	Announcement of Indicative Results Announcement by the Offeror of (i) the indicative aggregate principal amount of each Series of Existing Notes validly offered for exchange and (ii) in respect of the relevant Exchange Offer, whether Offers to Exchange for each Series of Existing Notes included in that Exchange Offer are expected to be accepted in full (if at all) or on a pro-rata basis and, where expected to be accepted on a pro-rata basis, an indication of the extent to which such Offers to Exchange will be scaled.
At or around 2.00 p.m. (London time) on the Price Determination Date	Price Determination Time and Date The time and date on which the Offeror will determine (i) the relevant New Notes Mid-Swap Rate, (ii) in relation to each Series of New Notes, the relevant New Notes Issue Price, the relevant New Notes Yield and the relevant New Notes Coupon for each Series of New Notes, (iii) the relevant Existing Notes Interpolated Mid-Swap Rate, the relevant Exchange Yield and the relevant Exchange Price for each Series of Fixed Rate Existing Notes and (iv) the Exchange Ratio for each Series of Existing Notes and relevant Series of New Notes.
As soon as reasonably practicable after the Price Determination Time	Results Announcement Date Announcement by the Offeror of (i) the relevant New Notes Mid-Swap Rate, (ii) in relation to each Series of New Notes, the relevant New Notes Issue Price, the relevant New Notes Yield and the relevant New Notes Coupon for each Series of New Notes, (iii) the relevant Existing Notes Interpolated Mid-Swap Rate, the relevant Exchange Yield and the relevant Exchange Price for each Series of Fixed Rate Existing Notes, (iv) the Exchange Ratio for each Series of Existing Notes and relevant Series of New Notes, (v) whether valid Offers to Exchange pursuant to the relevant Exchange Offer are accepted by the Offeror, (vi) the aggregate principal amounts of each relevant Series of Existing Notes the Offeror will be accepting for exchange, (vii) the satisfaction or waiver of the relevant Minimum New Issue Size Condition for each Series of New Notes, (viii) in respect of the relevant Exchange Offer, whether Offers to Exchange for each Series of Existing Notes included in that Exchange Offer are to be accepted in full (if at all) or on a pro-rata basis and, where accepted on a pro-rata basis, the extent to which such Offers to Exchange will be scaled and (ix) the relevant New Issue Amount for each Series of New Notes.
Expected to be 9 November 2016	Settlement Date Expected Settlement Date for each of the Exchange Offers, including (i) delivery of the New Notes in exchange for Existing Notes validly Offered for Exchange and accepted and (ii) payment of Accrued Interest Payments and Cash Rounding Amounts (if any).

Holders should check with any bank, securities broker or other Intermediary through which they hold their Existing Notes whether such Intermediary will apply different deadlines for participation to those set out in the Exchange Offer Memorandum and, if so, should factor in additional time, as necessary, to follow those deadlines.

The Offeror may, in its sole discretion, extend, re-open, amend, waive any condition of, terminate and/or withdraw any one or more of the Exchange Offers (including, without limitation, early closure of the relevant Exchange Offer Period and amending the terms and conditions of any or all Series of the New Notes, any Exchange Price, any Minimum New Issue Size and any Maximum New Issue Size) at any time up to and including when the Offeror announces whether it accepts valid Offers to Exchange pursuant to the relevant Exchange Offer, which the Offeror expects to do on the Results Announcement Date in relation to each relevant Series of Existing Notes.

Notice will be given to Holders of the relevant Series of Existing Notes if the terms and conditions or timing of the relevant Exchange Offer are amended.

Electronic Instruction Notices received by the Exchange Agent cannot be revoked except in the limited circumstances described in "Terms of the Exchange Offers - 13. Revocation Rights" of the Exchange Offer Memorandum.

The terms of the New Notes will be different from those of the Existing Notes. Holders are advised to read carefully the Exchange Offer Memorandum, including in particular the section headed "Risk Factors", for full details of, and information on the procedures for participating in, the Exchange Offers.

Unless stated otherwise, announcements will be made by the Offeror (i) by the issue of a press release to a Notifying News Service, (ii) by the delivery of notices to the relevant Clearing Systems for communication to Direct Participants and (iii) through RNS, and may also be found on the relevant Reuters International Insider Screen. Copies of all such announcements, press releases and notices can also be obtained from the Exchange Agent, the contact details for which are specified below. In addition, Holders of Existing Notes may contact the Joint Dealer Managers for information using the contact details specified below.

FURTHER INFORMATION

Lucid Issuer Services Limited has been appointed by the Offeror as exchange agent (the "Exchange Agent") in connection with the Exchange Offers.

Lloyds Bank plc (acting as Dealer Manager)  has been appointed by the Offeror as Global Co-ordinator & Joint Dealer Manager (the "Global Co-ordinator & Joint Dealer Manager") for the purposes of the Exchange Offers. 

BNP Paribas, Deutsche Bank AG, London Branch, Lloyds Bank plc (acting as Dealer Manager) and UBS Limited have been appointed by the Offeror as Joint Dealer Managers (the "Joint Dealer Managers") for the purposes of the Exchange Offers.

This announcement contains inside information.

For further information please contact:

Investor Relations:

Andrew Downey

Director, Investor Relations

Tel:        [phone]

Email:    [e-mail]

Corporate Affairs:

Matthew Smith

Head of Corporate Media

Tel:        [phone]

Email:    [e-mail]

Requests for information in relation to the Exchange Offers should be directed to:

GLOBAL CO-ORDINATOR & JOINT DEALER MANAGER

Lloyds Bank plc 10 Gresham Street London EC2V 7AE United Kingdom Telephone: [phone] Attention: Liability Management Group email: [e-mail]

JOINT DEALER MANAGERS

BNP Paribas 10 Harewood Avenue London NW1 6AA United Kingdom Telephone: [phone] Attention: Liability Management Group email: [e-mail]	Deutsche Bank AG, London Branch Winchester House 1 Great Winchester Street London EC2N 2DB United Kingdom Telephone: [phone] Attention: Liability Management Group email:[e-mail]
UBS Limited 5 Broadgate London EC2M 2QS United Kingdom Telephone: [phone] Attention: Liability Management Group email: [e-mail]

Requests for information in relation to, and for any documents or materials relating to, the Exchange Offers should be directed to:

EXCHANGE AGENT

Lucid Issuer Services Limited Tankerton Works 12 Argyle Walk London WC1H 8HA United Kingdom Tel: [phone] Attention: David Shilson / Arlind Bytyqi Email: [e-mail]

DISCLAIMER

This announcement must be read in conjunction with the Exchange Offer Memorandum. This announcement and the Exchange Offer Memorandum contain important information which must be read carefully before any decision is made with respect to the Exchange Offers. If any Holder is in any doubt as to the action it should take, it is recommended to seek its own legal, tax, accounting and financial advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent financial adviser. Any individual or company whose Existing Notes 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 Exchange Offers. None of the Offeror, the Joint Dealer Managers, the Exchange Agent and any person who controls, or is a director, officer, employee or agent of such persons, or any affiliate of such persons, makes any recommendation as to whether Holders should participate in the Exchange Offers.

OFFER RESTRICTIONS

This announcement and the Exchange Offer Memorandum do not constitute an offer or an invitation to participate in the Exchange Offers in the United States or in any other jurisdiction in which, or to any person to or from whom, it is unlawful to make such offer or invitation or for there to be such participation under applicable laws. The distribution of this announcement and the Exchange Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and/or the Exchange Offer Memorandum comes are required by each of the Offeror, the Joint Dealer Managers and the Exchange Agent to inform themselves about and to observe any such restrictions.

No action has been or will be taken in any jurisdiction by the Issuer, the Joint Dealer Managers or the Exchange Agent that would constitute a public offering of the New Notes other than the preparation of the Exchange Offer Memorandum in compliance with articles 652a and 1156 of the Swiss Code of Obligations for purposes of making the Exchange Offer in Switzerland.

United States

The Exchange Offers are not being made, and will not be made, directly or indirectly, in or into, or by use of the mail of, or by any means or instrumentality of interstate or foreign commerce of, or of any facilities of, a national securities exchange of, the United States. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone and the internet. The Existing Notes may not be Offered for Exchange by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States as defined in Regulation S of the U.S. Securities Act of 1933, as amended (the "Securities Act") or to U.S. persons as defined in Regulation S of the Securities Act (each a "U.S. person"). Accordingly, copies of this announcement, the Exchange Offer Memorandum and any other documents or materials relating to any one or more of the Exchange Offers are not being, and must not be, directly or indirectly, mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to U.S. persons. Any purported Offer to Exchange Existing Notes resulting directly or indirectly from a violation of these restrictions will be invalid, and any purported Offer to Exchange made by a person located in the United States or any agent, fiduciary or other Intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.

Neither this announcement nor the Exchange Offer Memorandum is an offer of securities for sale in the United States or to U.S. persons. Securities may not be offered or sold in the United States absent registration under, or an exemption from the registration requirements of, the Securities Act. The Existing Notes, the guarantees in respect thereof and the New Notes have not been, and will not be, registered under the Securities Act or the securities laws of any state or jurisdiction of the United States, and may not be offered, sold or delivered, directly or indirectly, in the United States or to, or for the account or benefit of, U.S. persons. The purpose of this announcement and the Exchange Offer Memorandum is limited to the Exchange Offers, and the Exchange Offer Memorandum may not be sent or given to a person in the United States or otherwise to any person other than in an offshore transaction in accordance with Regulation S under the Securities Act.

Each Holder of Existing Notes participating in one or more of the Exchange Offers will be deemed to represent that it is not a U.S. person and it is not located in the United States and is not participating in such an Exchange Offer from the United States or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in such an Exchange Offer from the United States. For the purposes of this and the above paragraph, "United States" means United States of America, its territories and possessions, any state of the United States of America and the District of Columbia.

Belgium

Neither this announcement, the Exchange Offer Memorandum nor any other documents or materials relating to any one or more of the Exchange Offers have been submitted to or will be submitted for approval or recognition to the Financial Services and Markets Authority (Autorité des services et marches financiers / Autoriteit financiële diensten en markten) and, accordingly, the Exchange Offers may not be made in Belgium by way of a public offering, as defined in Articles 3 and 6 of the Belgian Law of 1 April 2007 on public takeover bids (the "Belgian Takeover Law") or as defined in Article 3 of the Belgian Law of 16 June 2006 on the public offer of placement instruments and the admission to trading of placement instruments on regulated markets (the "Belgian Prospectus Law"), both as amended or replaced from time to time. Accordingly, the Exchange Offers may not be advertised and the Exchange Offers will not be extended, and neither this announcement, the Exchange Offer Memorandum nor any other documents or materials relating to any one or more of the Exchange Offers (including any memorandum, information circular, brochure or any similar documents) has been or shall be distributed or made available, directly or indirectly, to any person in Belgium other than (i) to persons which are "qualified investors" in the sense of Article 10 of the Belgian Prospectus Law, acting on their own account; or (ii) in any other circumstances set out in Article 6, §4 of the Belgian Takeover Law and Article 3, §4 of the Belgian Prospectus Law. This announcement and the Exchange Offer Memorandum have been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Exchange Offers. Accordingly, the information contained in this announcement and the Exchange Offer Memorandum may not be used for any other purpose or disclosed to any other person in Belgium.

France

The Exchange Offers are not being made, directly or indirectly, to the public in France. Neither this announcement, the Exchange Offer Memorandum nor any other documents or offering materials relating to any one or more of the Exchange Offers have been or shall be distributed to the public in France and only (i) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers) and/or (ii) qualified investors (investisseurs qualifiés) acting for their own account, all as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 of the French Code monétaire et financier, are eligible to participate in any one or more of the Exchange Offers. Neither this announcement nor the Exchange Offer Memorandum has been nor will be submitted for clearance procedures (visa) of the Autorité des marchés financiers.

Italy

Neither this announcement, the Exchange Offer Memorandum nor any other documents or materials relating to any one or more of the Exchange Offers have been or will be submitted to the clearance procedure of the Commissione Nazionale per le Società e la Borsa ("CONSOB") pursuant to Italian laws and regulations.

The Exchange Offers are being carried out in the Republic of Italy as exempted offers pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the "Financial Services Act") and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of 14 May 1999, as amended (the "Issuers' Regulation"). The Exchange Offers are also being carried out in compliance with article 35-bis, paragraph 7 of the Issuers' Regulation.

A holder of Existing Notes located in the Republic of Italy can tender Existing Notes through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007, as amended from time to time, and Legislative Decree No. 385 of September 1, 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority.

Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Existing Notes or the Exchange Offers.

United Kingdom

The communication of this announcement, the Exchange Offer Memorandum and any other documents or materials relating to any one or more of the Exchange Offers are not being made, and such documents and/or materials have not been approved, by an authorised person for the purposes of section 21 of the FSMA. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials is exempt from the restriction on financial promotions under section 21 of the FSMA on the basis that it is only directed at and may be communicated to (1) those persons who are existing members or creditors of the Group or other persons within Article 43 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, and (2) any other persons to whom these documents and/or materials may lawfully be communicated.

General

The Joint Dealer Managers, the Trustee and the Exchange Agent (and their respective directors, employees or affiliates) make no representations or recommendations whatsoever regarding this announcement, the Exchange Offer Memorandum or any of the Exchange Offers. The Exchange Agent is the agent of the Offeror and owes no duty to any Holder. None of the Offeror, LBG, the Dealer Managers, the Trustee or the Exchange Agent makes any recommendation as to whether or not Holders should participate in any one or more of the Exchange Offers.

In addition to the representations referred to above in respect of the United States, each Holder participating in an Exchange Offer will also be deemed to give certain representations in respect of the other jurisdictions referred to above and generally as set out in "Terms of the Exchange Offers - 9. Procedures for Offering to Exchange Existing Notes" of the Exchange Offer Memorandum. Offers of Existing Notes for Exchange from a Holder that is unable to make these representations may be rejected. Each of the Offeror, LBG, the Joint Dealer Managers and the Exchange Agent reserves the right, in their sole and absolute discretion, to investigate, in relation to any offer of Existing Notes for exchange pursuant to an Exchange Offer, whether any such representation given by a Holder is correct and, if such investigation is undertaken and as a result the Offeror determines (for any reason) that such representation is not correct, such instruction may be rejected.

The Exchange Offers do not constitute an offer to buy or the solicitation of an offer to sell the Existing Notes and/or the New Notes in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities or other laws require the relevant Exchange Offer to be made by a licensed broker or dealer and any of the Joint Dealer Managers or, where the context so requires, any of their respective affiliates is such a licensed broker or dealer in that jurisdiction, the relevant Exchange Offer shall be deemed to be made on behalf of the Offeror by such Joint Dealer Manager or affiliate (as the case may be) in such jurisdiction.

FORWARD LOOKING STATEMENTS

Certain statements included herein may constitute forward looking statements with respect to the business, strategy and plans of the Offeror, LBG or the Group and their current goals and expectations relating to their future financial condition and performance. Statements that are not historical facts, including statements about the Group or its directors' and/or management's beliefs and expectations, are forward looking statements. Words such as 'believes', 'anticipates', 'estimates', 'expects', 'intends', 'aims', 'potential', 'will', 'would', 'could', 'considered', 'likely', 'estimate' and variations of these words and similar future or conditional expressions are intended to identify forward looking statements but are not the exclusive means of identifying such statements. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will or may occur in the future.

The forward looking statements contained in this announcement are made as of the date hereof, and the Offeror, LBG or the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained in this announcement to reflect any change in the Offeror, LBG or the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

 

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