Capital Securities Exchange Offer

 

 

 

 

 

 

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OF AMERICA OR THE DISTRICT OF COLUMBIA (THE "UNITED STATES") OR INTO ANY OTHER JURISDICTION OR TO ANY OTHER PERSON WHERE OR TO WHOM IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS DOCUMENT.

 

(SEE "OFFER AND DISTRIBUTION RESTRICTIONS" BELOW)

 

LLOYDS BANKING GROUP PLC ("LBG") ANNOUNCES INVITATIONS TO EXCHANGE THE STERLING DENOMINATED SUBORDINATED SECURITIES LISTED BELOW (THE "EXISTING NOTES") FOR A COMBINATION OF (I) A SINGLE SERIES OF NEW STERLING DENOMINATED SUBORDINATED NOTES (THE "NEW TIER 2 NOTES") TO BE ISSUED BY LBG AND (II) ANY APPLICABLE CASH CONSIDERATION AMOUNT

16 November 2020

 

Lloyds Banking Group plc (the "Offeror") has today launched an Offer to Exchange selected sterling denominated subordinated securities (totalling approximately £2.0 billion outstanding).

THE EXCHANGE OFFERS

On the terms of and subject to the conditions contained in an exchange offer memorandum dated 16 November 2020 (the "Exchange Offer Memorandum"), the Offeror has invited all Holders (subject to the Offer Restrictions referred to below) of:

·   the Existing Tier 1 Notes set out under the heading "Existing Tier 1 Notes" below to Offer to Exchange any and all of such Existing Tier 1 Notes which are outstanding; and

·   the Existing Tier 2 Notes set out under the heading "Existing Tier 2 Notes" below to Offer to Exchange such Existing Tier 2 Notes which are outstanding, subject to the Maximum New Issue Size,

 

together, 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 (subject to the Offer Restrictions referred to below).

 

The Existing Notes

The table below identifies the Series of Existing Notes which are subject to the Exchange Offers.

 

In respect of their Existing Notes which are accepted for exchange, Holders will receive the relevant Exchange Consideration, which comprises the New Tier 2 Notes Consideration Amount and, where applicable, a Cash Consideration Amount. In addition, the Offeror will pay, or procure payment to, Holders, in respect of their Existing Notes which are accepted for exchange, an Accrued Interest Payment and a Cash Rounding Amount (if applicable) on the Settlement Date.

 

ISIN	Issuer	Current Coupon (%)	Amount Outstanding	Maturity Date	First Call Date	Reference Benchmark	Exchange Spread	Exchange Consideration* (%)	New Tier 2 Notes Consideration Amount (per £1,000 in principal amount of Existing Notes)	Cash Consideration Amount (per £1,000 in principal amount of Existing Notes)	Amount Subject to the Offers
EXISTING TIER 1 NOTES
XS0125686229	Bank of Scotland plc	7.281[1]	£150,000,000	Perpetual	31 May 2026	Not Applicable	Not Applicable	121.75	£885.12	£332.38	Any and All
XS0408620721	Lloyds Bank plc	13.000[2]	£590,841,000	Perpetual	22 January 2029	Not Applicable	Not Applicable	181.75[3]	£1,428.55	£388.95
GB0058327924	HBOS Sterling Finance (Jersey) L.P.	7.881[4]	£245,000,000	Perpetual	9 December 2031	Not Applicable	Not Applicable	166.00	£1,660.00	£0.00
EXISTING TIER 2 NOTES
XS0043098127	Lloyds Bank plc	9.625	£300,000,000	6 April 2023	Not Applicable	0.750% Treasury Gilt due 22 July 2023 (GB00BF0HZ991) Bloomberg Page PXUK	85bps	To be determined as set out herein and announced on the Results Announcement Date	An amount reflecting the Exchange Consideration minus the relevant Cash Consideration Amount	£500.00	Expected to be an amount that would not cause the Maximum New Issue Size to be exceeded, after taking into account the principal amount of New Tier 2 Notes that will be issued in exchange for Existing Tier 1 Notes; the relative acceptance amount for each Existing Tier 2 Notes shall be determined in the Offeror's sole discretion
XS0503834821	Lloyds Bank plc	7.625	£750,000,000	22 April 2025	Not Applicable	0.625% Treasury Gilt due 7 June 2025 (GB00BK5CVX03) Bloomberg Page PXUK	100bps			£229.33

* Including both the consideration in the form of New Tier 2 Notes and the Cash Consideration Amount (where applicable). An Accrued Interest Payment will be paid in addition to this. The Exchange Consideration in respect of the Lloyds Bank Perpetual Securities shall be deemed to include consideration for  the deferred and unpaid coupons on the Lloyds Bank Perpetual Securities which are accepted for exchange.

 

The New Tier 2 Notes

The table below identifies certain key characteristics of the New Tier 2 Notes to be issued by LBG pursuant to the Exchange Offers.

 

Issuer of the New Tier 2 Notes	Capital Type	Currency	Reference Gilt	Reference Gilt Rate	New Tier 2 Notes Spread	New Tier 2 Notes Issue Price	Optional Redemption Date	Maturity Date	Minimum New Issue Size	Maximum New Issue Size*
Lloyds Banking Group plc	Tier 2	GBP	4.75% Treasury Gilt due 7 December 2030 (GB00B24FF097) Bloomberg Page PXUK	To be determined as set out herein and announced on the Results Announcement Date	240bps	100%	3 December 2030	3 December 2035	£350,000,000	£1,250,000,000

 

* Offers to Exchange Existing Tier 1 Notes shall be made on an any and all basis; if submissions of Existing Tier 1 Notes would result in a greater new issue size than the Maximum New Issue Size, then the final issue amount of the New Tier 2 Notes may be greater than the Maximum New Issue Size. In this case, no Existing Tier 2 Notes are expected to be accepted for exchange.

 

The New Tier 2 Notes will be in bearer form in denominations of £100,000 and integral multiples of £1,000 in excess thereof up to and including £199,000, 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 the New Tier 2 Notes to be admitted to the Official List of the Financial Conduct Authority and to the London Stock Exchange plc for the New Tier 2 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 Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments. Such admission is expected to occur on the Settlement Date.

 

Further details of the New Tier 2 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 Tier 2 Notes and, where applicable, a Cash Consideration Amount.

 

The Exchange Offers are part of the Group's continuous review and management of its outstanding capital issuance, maintaining a prudent approach to the management of the Group's capital position.

 

Minimum and Maximum New Issue Size

The Exchange Offers are conditional upon receiving valid Offers to Exchange that, if and when accepted, would result in the Offeror issuing New Tier 2 Notes in an aggregate principal amount which satisfies the Minimum New Issue Size Condition (as set out in the column entitled "Minimum New Issue Size" of the table set out under the heading "The New Tier 2 Notes" above).

 

The Maximum New Issue Size for the New Tier 2 Notes to be issued pursuant to the Exchange Offers is set out in the column entitled "Maximum New Issue Size" of the table set out under the heading "The New Tier 2 Notes" above, provided that if the Offeror accepts Existing Tier 1 Notes of any Series for exchange it will accept any and all Existing Tier 1 Notes of that Series for exchange and so such Maximum New Issue Size will not apply to New Tier 2 Notes issued in exchange for Existing Tier 1 Notes.

 

The Offeror reserves the right (in its sole discretion) to increase, decrease or waive the Maximum New Issue Size.

 

Exchange Consideration, New Tier 2 Notes Consideration Amounts and Cash Consideration Amounts

The Exchange Consideration comprises the New Tier 2 Notes Consideration Amount and, where applicable, a Cash Consideration Amount (as set out in the column entitled "Exchange Consideration" of the table set out above).

 

In relation to the Existing Tier 1 Notes, the New Tier 2 Notes Consideration Amount is set out in the column entitled "New Tier 2 Notes Consideration Amount" and the Cash Consideration Amount, where applicable, is set out in the column entitled "Cash Consideration Amount", each as set out in the table under "The Existing Notes" above.

 

In relation to the Existing Tier 2 Notes, the Exchange Consideration will be the price (expressed as a percentage and rounded to the nearest 0.001 per cent., with 0.0005 per cent. being rounded upwards) at which Existing Notes of the relevant Series will be accepted for exchange by the Offeror, determined at the Price Determination Time on the Price Determination Date as described in accordance with market convention, and is intended to reflect a yield to maturity of the relevant Series of Existing Tier 2 Notes on the Settlement Date equal to the relevant Exchange Yield (being the sum, which will be annualised in the case of the 2023 Notes, of the relevant (a) Exchange Spread and (b) Existing Tier 2 Notes Reference Benchmark Yield). Specifically, the Exchange Consideration for each Series of Existing Tier 2 Notes will equal (a) the value of all remaining payments of principal and interest on each such Series up to and including the relevant maturity date of such Series of Existing Tier 2 Notes, discounted to the Settlement Date at a discount rate equal to the relevant Exchange Yield, minus (b) the relevant Accrued Interest Amount.

 

In relation to the Existing Tier 2 Notes, the New Tier 2 Notes Consideration Amount will be equal to the Exchange Consideration (expressed as an amount per £1,000 Existing Notes) minus any applicable Cash Consideration Amount.

 

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 Tier 2 Notes in an amount (rounded down to the nearest £1,000) based upon the aggregate principal amount of such Existing Notes accepted for exchange and the relevant New Tier 2 Notes Consideration Amount, subject to the requirement for each Holder to exchange at least the relevant Minimum Offer Amount.

 

Where applicable, Holders who validly Offer to Exchange their Existing Notes at or prior to the Expiration Time and whose Offers to Exchange are accepted will also be entitled to receive, in respect of each £1,000 in principal amount of the Existing Notes so accepted for exchange, the Cash Consideration Amount (if any). For avoidance of doubt, sum of the New Tier 2 Notes Consideration Amount, the Cash Consideration Amount (if any) and the Cash Rounding Amount (if any, as detailed below) shall be equal to the Exchange Consideration when expressed as an amount per £1,000 in principal amount of the Existing Notes accepted for exchange.  

 

Accrued Interest Payments and Cash Rounding Amounts

If, as a result of the application of the relevant New Tier 2 Notes Consideration Amount (and, in the case of Offers to Exchange in respect of Existing Tier 2 Notes, after the application of the relevant Series Acceptance Amount and any pro-ration of Offers to Exchange), a Holder would be entitled to receive an aggregate principal amount of New Tier 2 Notes that is not an integral multiple of £1,000, the Offeror will pay, or procure that there is paid, in cash in sterling to that Holder on the Settlement Date, a Cash Rounding Amount, which is the amount equal to the fractional portion of such aggregate principal amount that is not such an integral multiple (rounded to the nearest £0.01, with half a penny being rounded upwards).

 

Each Holder will also be entitled to receive any applicable Accrued Interest Payments in respect of their Existing Notes so accepted for exchange. Accordingly, given that the Accrued Interest Payments will be paid pursuant to the relevant Exchange Offer, Holders whose Existing Notes are accepted for exchange pursuant to the Exchange Offers will not be entitled to receive any further payment pursuant to the terms of such Existing Notes in respect of accrued and unpaid interest. Furthermore, Holders of any Lloyds Bank Perpetual Securities which are accepted for exchange will not be entitled to receive any further payment, shares or other compensation in respect of any deferred and unpaid coupons in respect of such Lloyds Bank Perpetual Securities; consideration for deferred and unpaid coupons is deemed to be included in the applicable Exchange Consideration.

 

Acceptance; Tier 2 Notes Acceptance Amount

Upon expiration of the Exchange Offer Period, the Offeror may (but has no obligation to Holders to) accept valid Offers to Exchange, in which case such Offers to Exchange will be accepted at the Offeror's sole discretion.

 

If the Offeror decides in its sole and absolute discretion to accept valid Offers to Exchange in respect of a Series of Existing Tier 1 Notes pursuant to the relevant Exchange Offer, it will accept for exchange all Existing Tier 1 Notes of that Series in respect of which valid Offers to Exchange have been received without pro-ration. Existing Tier 1 Notes will be accepted for exchange in priority to any Existing Tier 2 Notes, subject to the right of the Offeror to withdraw or terminate any Exchange Offer. 

 

If the Offeror decides, in its sole and absolute discretion, to accept valid Offers to Exchange in respect of the Existing Tier 2 Notes, it intends to accept for exchange one or both Series of Existing Tier 2 Notes up to the Tier 2 Notes Acceptance Amount.  The Tier 2 Notes Acceptance Amount shall be equal to the maximum principal amount of Existing Tier 2 Notes that may be accepted without the aggregate New Tier 2 Notes Consideration Amount exceeding the Maximum New Issue Size, after taking into account the principal amount of New Tier 2 Notes that will be issued in exchange for Existing Tier 1 Notes, and may be subject to increase or decrease in the Offeror's sole discretion.

 

The Offeror will determine the allocation of the Tier 2 Notes Acceptance Amount among each Series of Existing Tier 2 Notes in its sole and absolute discretion, and reserves the right to accept significantly more or less (or none) of the Existing Tier 2 Notes of one Series as compared to the other Series of Existing Tier 2 Notes.

 

If the aggregate principal amount of Existing Tier 2 Notes of a Series validly offered for exchange is greater than the Series Acceptance Amount for such Series, the Offeror intends to accept for exchange Existing Tier 2 Notes of such Series on a pro-rata basis as set out in further detail in the Exchange Offer Memorandum.

 

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 any 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 Offers, will not be eligible to receive New Tier 2 Notes in exchange for such Existing Notes, will not be entitled to receive any Cash Consideration Amount and will continue to hold such Existing Notes subject to their terms and conditions.

 

None of the Offeror, the Issuers, the Joint Dealer Managers, the Trustees 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 (in the case of Offers to Exchange in respect of Existing Tier 2 Notes, after the application of the relevant Series Acceptance Amount and any pro-ration of Offers to Exchange) relates to an aggregate principal amount of Existing Notes of that Series such that, after the application of the relevant New Tier 2 Consideration Amount for such Series, a Holder of such Existing Notes is eligible to receive a principal amount of New Tier 2 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 a Series of less than the relevant 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.

 

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
16 November 2020	Commencement of the Exchange Offer Period Exchange Offers announced and notice of the Exchange Offers submitted to the Clearing Systems and published via RNS.   Exchange Offer Memorandum available from the Exchange Agent.
4.00 p.m. (London time) on 24 November 2020	Expiration Time and Date Deadline for receipt of all Exchange Instructions. End of the Exchange Offer Period.
Prior to the Price Determination Time on 25 November 2020 (or the Business Day following such date and time to which the Expiration Date, as applicable, has been so extended or the Exchange Offers re-opened)	Announcement of Indicative Results Announcement by the Offeror of a non-binding indication of whether it intends to accept valid Offers to Exchange Existing Notes pursuant to the Exchange Offers and, if so, (i) a non-binding indication of the principal amount of each Series of the Existing Tier 1 Notes to be accepted for exchange, (ii) a non-binding indication of the Tier 2 Notes Acceptance Amount  and (iii) a non-binding indication of the Series Acceptance Amount and the Pro-ration Factor(s), if applicable, in relation to each Series of Existing Tier 2 Notes.
Expected to be at or around 11.00 a.m. (London time) on 25 November 2020 (or the Business Day following such date and time to which the Expiration Date, as applicable, has been so extended or the Exchange Offers re-opened)	Price Determination Time and Date The time and date on which the Offeror will determine (i) the Reference Gilt Rate in respect of the New Tier 2 Notes, (ii) the New Tier 2 Notes Yield, the New Tier 2 Notes Initial Coupon, (iii) the relevant Exchange Yield and the relevant Exchange Consideration for each Series of Existing Tier 2 Notes and (iv) the New Tier 2 Notes Consideration  Amount for each Series of Existing Tier 2 Notes.
As soon as reasonably practicable after the Price Determination Time on the Price Determination Date	Results Announcement Date On the Results Announcement Date, the Offeror is expected to announce (i) the Reference Gilt Rate in respect of the New Tier 2 Notes, (ii) the New Tier 2 Notes Yield, the New Tier 2 Notes Initial Coupon, (iii) the relevant Exchange Yield and the relevant Exchange Consideration for each Series of Existing Tier 2 Notes, (iv) the New Tier 2 Notes Consideration Amount for each Series of Existing Tier 2 Notes, (v) whether valid Offers to Exchange pursuant to the Exchange Offers are accepted by the Offeror, (vi) the principal amount of each Series of the Existing Tier 1 Notes accepted for exchange, (vii) the Tier 2 Notes Acceptance Amount in respect of the Existing Tier 2 Notes, (viii) in relation to each Series of Existing Tier 2 Notes, the Series Acceptance Amount and any Pro-ration Factor(s), (ix) the satisfaction or otherwise of the Minimum New Issue Size Condition and (x) the New Issue Amount.
Expected to be on or around 3 December 2020	Settlement Date Settlement Date for the Exchange Offers, including (i) delivery of the New Tier 2 Notes in exchange for Existing Notes validly Offered for Exchange and accepted and (ii) payment of Accrued Interest Payments, Cash Rounding Amounts (if any) and Cash Consideration Amounts (if any).

 

Holders are advised to check with any bank, securities broker, Clearing Systems or other Intermediary (as defined herein) through which they hold their Existing Notes whether such Intermediary applies different deadlines for any of the events specified above, and then to allow for such deadlines if the deadlines set by such persons are prior to the deadlines set out above.

 

The Offeror may, in its sole discretion, extend, re-open, amend, waive any condition of, terminate and/or withdraw the Exchange Offer in respect of any one or more or all Series of Existing Notes (including, without limitation, amending the New Tier 2 Notes Conditions, any Exchange Consideration, the Minimum New Issue Size or the 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 Exchange Offers, 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 Exchange Offers are amended.

 

Exchange Instructions received by the Exchange Agent cannot be revoked except in the limited circumstances described in "Terms of the Exchange Offers - 15. Revocation Rights" of the Exchange Offer Memorandum.

 

The terms of the New Tier 2 Notes will be different from those of the Existing Notes. In addition to differences in financial terms which include, inter alia, the Issuer, the coupon and payment dates, the terms of the New Tier 2 Notes differ in respect of maturity, the possible redemption dates and ranking. 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 delivery of notices to the relevant Clearing Systems for communication to Direct Participants and (ii) through RNS. Announcements may also be issued by way of press release to a Notifying News Service and 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 Corporate Markets plc 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. 

 

Goldman Sachs International and Merrill Lynch International have been appointed by the Offeror as Joint Dealer Managers (together with the Global Co-ordinator & Joint Dealer Manager, the "Joint Dealer Managers") for the purposes of the Exchange Offers.

 

This announcement contains inside information in relation to the Existing Notes and is disclosed in accordance with the Market Abuse Regulation (EU) 596/2014 ("MAR"). For the purposes of MAR, this announcement is made by Douglas Radcliffe, Group Investor Relations Director.

 

For further information please contact:

 

Investor Relations:

Douglas Radcliffe
Group Investor Relations Director
Telephone: +44 (0)20 7356 1571
Email: [email protected]

Corporate Affairs:

Matthew Smith
Head of Media Relations
Tel: +44 (0) 20 7356 3522
Email: [email protected]

 

 

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

 

GLOBAL CO-ORDINATOR & JOINT DEALER MANAGER

 

Lloyds Bank Corporate Markets plc 10 Gresham Street London EC2V 7AE United Kingdom     Telephone: +44 20 7158 1719/1726 Attention: Liability Management Group email: [email protected]

 

JOINT DEALER MANAGERS

 

Goldman Sachs International Plumtree Court 25 Shoe Lane London EC4A 4AU United Kingdom   Telephone: +44 20 7552 6157 Attention: Liability Management Group email: [email protected]	Merrill Lynch International 2 King Edward Street London EC1A 1HQ United Kingdom     Telephone: +44 20 7996 5420 Attention: Liability Management Group email: [email protected]

 

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: +44 20 7704 0880 Attention: Arlind Bytyqi Email: [email protected]

 

 

 

DISCLAIMER

This announcement must be read in conjunction with the Exchange Offer Memorandum. This announcement and the Exchange Offer Memorandum contain important information which should 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 or is unsure of the impact of the Exchange Offers, it is recommended to seek its own financial and legal advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent financial or legal adviser. Any individual or company whose Existing Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee or intermediary must contact such entity if it wishes to participate in the Exchange Offers. None of the Offeror, the Joint Dealer Managers, the Exchange Agent (or any of their respective directors, officers, employees, agents or affiliates) is providing Holders with any legal, business, tax or other advice in the Exchange Offer Memorandum. Holders should consult with their own advisers as needed to assist them in making an investment decision and to advise them whether they are legally permitted to participate in the Exchange Offers.

 

OFFER RESTRICTIONS

Neither this announcement nor the Exchange Offer Memorandum constitutes 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 Offeror, the Joint Dealer Managers or the Exchange Agent that would constitute a public offering of the New Tier 2 Notes.

 

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 and other forms of electronic communication. 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 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 (as defined herein) 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 (where applicable) and the New Tier 2 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 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 the Exchange Offers 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 the Exchange Offers 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 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 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 "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, §2-4 of the Belgian Takeover Law and Article 3, §2-4 of the Belgian Prospectus Law. This announcement and the Exchange Offer Memorandum has been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Exchange Offer. 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

This announcement, the Exchange Offer Memorandum and any other documents or offering materials relating to the Exchange Offers may not be distributed in the Republic of France except to qualified investors (investisseurs qualifiés) as defined in Article 2(e) of the Prospectus Regulation. Neither this announcement nor the Exchange Offer Memorandum has not been and will not be submitted for clearance to the Autorité des marchés financiers.

 

Republic of Italy

Neither this announcement, the Exchange Offer Memorandum nor any other documents or materials relating to 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 an exempted offer 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 offer to exchange the 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. 20307 of 15 February 2018, 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 and the Exchange Offer Memorandum and any other documents or materials relating to the Exchange Offers is 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 otherwise within Article 43(2) 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.

 

Switzerland

 

The offering of the New Tier 2 Notes in Switzerland is exempt from requirement to prepare and publish a prospectus under the Swiss Financial Services Act ("FinSA") because the New Tier 2 Notes have a minimum denomination of CHF 100,000 (or equivalent in another currency) or more and the New Tier 2 Notes will not be admitted to trading on any trading venue (exchange or multilateral trading facility) in Switzerland. Neither this announcement nor the Exchange Offer Memorandum does not constitute a prospectus pursuant to the FinSA, and no such prospectus has been or will be prepared for or in connection with the offering of the New Tier 2 Notes.

 

General

The Issuers, the Joint Dealer Managers, the Trustees 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 the Exchange Offers. The Exchange Agent is the agent of the Offeror and owes no duty to any Holder. None of the Offeror, the Issuers, the Joint Dealer Managers, the Trustees or the Exchange Agent makes any recommendation as to whether or not Holders should participate in the Exchange Offers.

 

In addition to the representations referred to above in respect of the United States, each Holder participating in the Exchange Offers 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 Offer - 11. 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, 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 the Exchange Offers, 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 Tier 2 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.