Company Announcements

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LLOYDS BANKING GROUP PLC ("LBG") ANNOUNCES INDICATIVE RESULTS OF ITS OFFERS 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

 25 November 2020

Further to its announcement on 16 November 2020, Lloyds Banking Group plc (the "Offeror") is today announcing, on a non-binding basis, indicative results of its invitations to 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 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".

The Exchange Offers were made on the terms of and subject to the conditions contained in an exchange offer memorandum dated 16 November 2020 (the "Exchange Offer Memorandum"). Capitalised terms not otherwise defined in this announcement have the same meaning as assigned to them in the Exchange Offer Memorandum.

SUMMARY OF INDICATIVE RESULTS

The indicative results of the Exchange Offers are as follows:

For the Offer to Exchange the Existing Tier 1 Notes, the indicative aggregate principal amount accepted for exchange is £825,655,000.

For the Offer to Exchange the Existing Tier 2 Notes, the indicative aggregate principal amount accepted for exchange is £207,535,000.

All valid Offers to Exchange Existing Tier 1 Notes in the Exchange Offers are expected to be accepted in full without pro-ration. The Tier 2 Notes Acceptance Amount is expected to be £207,535,000.

Valid Offers to Exchange the 2023 Notes are expected to be accepted in full without pro-ration. The Offeror does not expect to accept any Offers to Exchange in respect of the £750,000,000 7.625 per cent. Dated Subordinated Notes due 22 April 2025 (XS0503834821) issued by Lloyds Bank plc.

*Including both the consideration in the form of New Tier 2 Notes and the Cash Consideration Amount (where applicable)

The Price Determination Time is expected to be at or around 11.00 a.m. (London time) on 25 November 2020.

As soon as reasonably practicable after the Price Determination Time, 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 and the New Tier 2 Notes Initial Coupon, (iii) the Exchange Yield and the Exchange Consideration for the 2023 Notes, (iv) the New Tier 2 Notes Consideration Amount for the 2023 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 the 2023 Notes, the Series Acceptance Amount and any Pro-ration Factor, (ix) the satisfaction or otherwise of the Minimum New Issue Size Condition and (x) the New Issue Amount.

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.

Further details of the New Tier 2 Notes are set out in the Exchange Offer Memorandum.

Settlement Date

The Settlement Date for each of 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), is expected to be on or around 3 December 2020.

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.

FURTHER INFORMATION

For further information please contact:

Investor Relations:

Douglas Radcliffe
Group Investor Relations Director
Telephone: +44 (0)20 7356 1571
Email: Douglas.Radcliffe@LloydsBanking.com

Corporate Affairs:

Matthew Smith
Head of Media Relations
Tel: +44 (0) 20 7356 3522
Email: matt.smith@lloydsbanking.com

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

GLOBAL CO-ORDINATOR & JOINT DEALER MANAGER

JOINT DEALER MANAGERS

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

DISCLAIMER

This announcement must be read in conjunction with the Exchange Offer Memorandum and the announcement in connection with the Exchange Offers published via RNS on 16 November 2020. 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.