24 October 2014 Insurance

Lloyd’s £500m bond attracts £1bn in orders

A £500 million subordinated bond being placed by Lloyd’s has been doubly subscribed as it attracted £1 billion of orders from investors.

This is according to bank Citigroup, which said that Lloyd’s began testing investor interest at Gilts plus 275 basis points via Citigroup, Barclays and RBS.

It added that this quickly attracted orders in excess of £800 million and a further near £200 million of additional orders flowed in throughout the morning. The pricing was later fixed at Gilts plus 268 basis points for a £500 million size.

Lloyd’s has already bought back £280 million of its subordinated bonds, once in April 2009 when it reclaimed £100 million, and again in 2013 when it bought back £180 million.

Citigroup said the new bond will offer Lloyd’s a much more stable form of capital and make it less reliant on the liquidity of its members.

“The overall market backdrop is relatively supportive for insurance issuance in sterling, with the most recent deal from RSA outperforming insurer paper in dollars and euro,” said Citigroup.

A Lloyd’s spokesperson said: “We are very pleased with the quality and level of interest in the new bond.”

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