Market likes the statement so far

On a well down market FTSE losing 65 points the shares are risinng Strongly 88.50p +3.50p

I take it that the qualifying date for the rights issue will be at some future date

Fully Underwritten Rights Issue

To Raise: c.13.5bn / $22.1bn
New shares to be issued at a price equal to the higher of (i) 15 pence per new share and (ii) a price per new share which is within a range of 38% to 42% discount to TERP

Final rights issue price expected to be announced on or around 24 November

HM Government has undertaken to subscribe in full for its 43% entitlement
Expected Timetable:
Nov 3rd: Transaction announced to the market
Nov 24th: Announcement of Final Rights Issue Price
Nov 26th: General Meeting
Nov 26th: Subscription period starts
Nov 27th: Rights commence trading
Dec 11th: End of subscription and rights trading period
Dec 14th: Announcement of take-up and Rump Placement (if any)
Dec 17th: Settlement of Rump
Joint Global Co-Ordinators and Bookrunners: BofA Merrill Lynch, Citi, UBS
Joint Bookrunners: Goldman Sachs, HSBC, JP Morgan
Co-Bookrunner: Lloyds TSB Corporate Markets

am I alone in thinking that allowing the payment of a dividend would make the task much easier, boost the sp and get the gov off our backs in double quick time.

surely playing with N Rock & RBS would keep any chancelor happy for many a long day.

END-OF-DAY REPORT:

Lloyds had a bumpy ride but eventually closed up 2.33p at 87.33p, the best blue chip performer of the day, after announcing it will raise 21bn through a 13.5bn rights issue and 7.5bn swap of existing debt for contingent capital. The government will take up its rights, investing 5.7bn net of an underwriting fee to keep its stake in the bank at 43%.

Banks get 31 billion more aid, agree sell-offs
Tue 03 Nov, 2009 16:56 -- By Clara Ferreira-Marques and Steve Slater

LONDON (Reuters) - Britain's two largest retail banks secured another 31 billion pounds from the government on Tuesday and agreed to sell branches and key businesses to appease EU competition concerns over state aid.

Royal Bank of Scotland and Lloyds Banking Group also accepted drastic caps on bankers' bonuses in deals that pave the way for Britain to begin selling the bank stakes it bought during the crisis -- a crucial source of funds as the country struggles with a ballooning budget deficit.

Lloyds also freed itself from a government insurance scheme for bad debts by raising 13.5 billion pounds in the world's largest ever rights issue, as part of a 21 billion-pound capital raising.

PUNITIVE ASSET SALES

The government, which will inject 25.5 billion pounds into RBS and pay Lloyds a net 5.7 billion pounds to take up its rights in the cash call, said the disposals would shake up competition in retail banking, bringing "at least three new banks" to Britain's high streets over the next four years.

Lloyds and RBS will between them have to sell off businesses representing almost 10 percent of the UK retail banking market. Only new entrants or "small players" in the market will be allowed to bid, raising doubts about which buyers will step up.

Lloyds, which has avoided harsher penalties by staying out of the APS, said it would sell 600 of its retail branches, with disposals including Lloyds TSB Scotland, Cheltenham & Gloucester branches and its Intelligent Finance and the TSB brand.

To address EU concerns, it will face a dividend ban for two years and a prohibition on acquisitions for up to four years.

RBS will be forced to sell NatWest branches in Scotland

LLOYDS DEAL

To sidestep the APS, Lloyds confirmed market expectations it would raise 21 billion pounds via a discounted rights issue and by swapping 7.5 billion pounds in existing debt into contingent capital, which will support its capital requirements.

The move will allow Lloyds to avoid the fees associated with the costly APS scheme as the economy improves, and will cap the government's stake at 43 percent. However, Lloyds said it will pay the government a 2.5 billion pound break fee to avoid the APS.

The fully underwritten 13.5 billion-pound cash call, which will involve a massive operation to inform Lloyds's 2.8 million small shareholders, will be priced on Nov 24 at the higher of either 15p or a 38-42 percent discount to the ex-rights price.

Lloyds said it had received backing from shareholders and bond investors, but the response on Tuesday was mixed.

"This deal does not look especially attractive ... They can't pay a dividend until 2012 at least and we still have all the secondary issuance to come," one top ten investor said. "I find myself very underwhelmed."

But another top 10 investor added: "The issue will go through successfully. The deal is done effectively."

1:23 PM
RBS and Lloyds will take years to break free from the taxpayer's grip
Thanks to the European Union, the banking sector in the UK is set to change out of all recognition for better, or worse. Billion of pounds more need to be ploughed into our two worst casualties of the banking meltdown, Royal Bank of Scotland and Lloyds Banking Group, which also includes the basket case HBOS.

The Government ploughed a total of 37 billion into the pair of them last year and now needs to inject a further 5.7 billion into Lloyds so that it can turn to the City in order to raise a total of 21 billion. This will include a record breaking 13 billion rights issue at a deeply discounted level to the current ruling price of 86p.

But the EU doesn't like banks that are supported by taxpayers cash. It says that gives them an unfair competitive advantage. So, in return for the extra cash, Lloyds must follow the lead of other European banks and make itself smaller. It must divest itself of a total of 600 high street branches, including all 164 branches of Cheltenham & Gloucester, all of Lloyds TSB in Scotland and a further 280 branches across England and Wales. Also going within the next four years is the TSB brand name and it on-line business Intelligent Finance. RBS is unlikely to escape the cull in return for more taxpayers cash and will also see the Government's stake grow from 70% to a whopping 84%.

All these changes will make life exceedingly difficult for stock market investors. Existing shareholders at Lloyds must decided if they want to support the rights issue, commit more good money after bad and still face the prospect of being further diluted without seeing a return on their investment.

Others may look at the terms of the rights issue and be tempted to buy the heavily discounted shares, lock them away and see what happens. Then there are the fund managers who may look at both banks and wonder how you set about valuing them when a year down the line they may have changed out of all recognition.

Alan Capper asset allocation specialist at Pinner Park Investments says that if investors believe that either Lloyds or RBS shares look unbelievably cheap, they buy them and lock them away for the long-term. With the Government's stake in RBS set to grow, it is unlikely institutional investors will invest further in RBS. They will also have to think long and hard about allocating Lloyds any further funds. By any yardstick, these remains high risk investments. It will be years before either bank are able to break free of the taxpayers grip and, by then, who knows what shape the UK banking industry will be in.

looks like an almighty government f?ck up as usual...........a year ago they smashed competition rules for llloy and HBOS to merge.........now they saying we need lots of smaller banks for competition.

if a private company acted like this, lawsuits all over the place would be aimed at management........anyone wanting to take darling and brown to court?

all these rights issue........several each for all banks........what a waste of money with further FSA incompetent staff and trasury mulling over stuff......plus american banks charging huge sums for rights issue.

gov got lloy for nothing almost now as almost 3 billion paid back already.....and now 2.5 billion to be paid to not do this insurance crap.

northern rock have had the most money and they are just a tiny bank in north east england........ludicrous! and why are newcastlr united sponsored with a nationalised bank .......why are paying for 11 silly geordies running around with northern rock on their tops.

found this link to that dutch bitch.........but that was early in 2009 so the warning was there

http://purestyledc.com/top-10-most-evil-people-in-the-world-today/

text below says this bitch is 4th most evil in world.......yes, they called her a bitch!

Number 4: Neelie Kroes
Accused of:
Monopolistic Powers
Being a bitch
Egotistical
Didnt think we could go an entire ten with at least one woman did you? Who is Neelie Kroes you ask yourself? That in itself makes this bitch evil. She is the European Commissioner for Competition aka the Head Bitch in Charge of the EU.

So what does she do? She comes down on every single U.S. company that is moderately successful doing any business in Europe. While fining Microsoft a whopping 497 million, plus interest! She also has gone after Apple & Google as well. Why? Monopoly? Nope. Greed. Pushing those companies to the point of compliance. When they get pushed too far and threaten to pull out of Europe, she backs off, but like a snake, only temporarily to regroup and attack again. Hey, lets face it, we all know MS is evil, but they are our evil company and if Europe doesnt like it, tell them to build their own operating systems.

Oh, and she switches allegiances to whomever pays her the most. Not unlike other politicians, but then again, not all control all of Europe.

i say......lets shoot this ugly wrinkly bitch

Marni She does have a nice Elvis hair cut.and that look of Deborah Meaden..no you are right shoot her!!!!

i'm off shopping today..............arent there contract killers in this country.......surely the gov or one of the banks can bung them a bit of dosh to take out this vile evil dutch bitch

it really is a shame that the promised referendum will not be possible - nothing to do with cameron reneging on his promise, but reality

Lloyds upgraded to buy from hold at Citigroup, target price raised to 104p from 37p

citigroup has no reputation left.

and how can they almost triple their previous target price.....ridiculous! just goes to show why yanks went bust last year

marni, they have not lost their reputation amongst customers.
They might have lost it to the analysts, which is not a bad thing though!!!

ANalysts are responsible for the problems and they shpuld suffer as we recover.

Lloyds were one of the UKs most respected banks before the HBOS fiasco.
It seems to me,that one should not rubbish everything because of one tragic venture.
In other words,keep the baby,throw out only the bath water!

Chess, that would seem reasonable.

But do you expect this thread to be reasonable?

One can only hope,Fred!
I often get the impression that there are a good few trying to emulate a chicken that is minus its' head.