Tuesday 12 December 2017

Lloyds to meet investors on potential covered bond sales

Esteban Duarte and Caroline Hyde

Lloyds Banking Group is meeting investors in cities including Amsterdam, Paris and London about potential issues of covered bonds, according to two people with knowledge of the plans.

The UK mortgage lender, 43pc owned by taxpayers, filed a prospectus with UK regulators to allow it to issue as much as €15bn of covered bonds.

In the so-called non-deal roadshow, Lloyds is giving bondholders details of its finances and the program, said the people, who declined to be identified as the details are private.

The bank set up the issuance program through its Lloyds TSB Bank Plc unit. European financial institutions raised over €28bn from covered bonds this year, the fastest pace of sales in four years, according to data compiled by Bloomberg.

Sara Evans, a spokeswoman for Lloyds in London, declined to comment.

Covered bonds are typically backed by mortgages or public-sector loans. The collateral underlying the debt remains with the borrower, which also guarantees the bonds.

The securities date back to the 18th century, when they were used in Prussia to finance agriculture, according to the European Covered Bond Fact Book.


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