Lloyds launched consent solicitations in relation to its outstanding sterling benchmark covered bonds today (Monday), seeking to gain approval to switch the coupon basis of the soft bullets’ extension periods from Libor to Sonia, after Nationwide expanded the transition beyond FRNs.

Lloyds Bank succeeded with the first switch from Libor to Sonia in the covered bond market in October, when it gained approval to convert the coupon on a £1bn (€1.17bn) March 2023 floating rate note sold in 2018. Nationwide Building Society then expanded the transition into fixed rate bonds in November, when investors approved the switch for the coupon in the potential extension period of a £750m January 2026 soft bullet covered bond.

Lloyds is now targeting four sterling benchmarks totalling £4.24bn: a £1.25bn February 2029 issue (ISIN XS0589945459), a £1.25bn March 2025 (ISIN XS0737747211), a £1.24bn March 2027 (ISIN XS0765619407), and a £500m March 2022 (ISIN XS1212747361).

Bondholder meetings in respect of each of the covered bonds are scheduled for 6 February. The quorum for each issue is two-thirds of the outstanding principal amount, with 75% of votes cast needing to be in favour for resolutions to be approved. Should an initial meeting be inquorate, at adjourned meetings the quorum is one-third.