That means it will have to issue £15-£20bn of new debt next year instead of the previous target of £20-25bn. The move reduces Lloyds’ short-term reliance on wholesale funding markets, which have seized up over the last quarter due to the Eurozone debt crisis and regulatory uncertainty.
The debt exchange effectively lengthens the maturity of Lloyds’ debt. The bank did not state the total it had to pay investors to participate, but said they were given a “premium”.
It comes at the start of a crucial week for Lloyds, whose board meets on Thursday to discuss the return of its ill CEO and its sale of 632 branches.