Lloyds in £4.9bn bond swap offer

Lloyds Banking Group has offered to exchange £4.9bn of its outstanding bonds in order to raise new capital.

The part-nationalised lender will offer investors in its Tier 2 securities the chance to swap their holdings for new bonds at a discount to face value of as much as 30%, the Telegraph reports. This transaction will contribute about 20% of the bank's funding needs for next year, according to Lloyds. By exchanging Tier 2 notes, banks dispose of securities that will start to lose their value as capital notes under new European rules from 2013. Lenders also get a boost to their capital against losses by swapping the debt at a discount. Lloyds said: "This decision has been taken in lig...