I'm not sure hangon. New car sales often offer quite small margins for dealers. They are often incentivised by manufacturers to sell a target number of units in return for a bonus. They also get a good cut from finance arrangements.Supplying of new parts has to be done by a main dealer and the margins on these are high far exceeding the cost of the car if bought individually. I see it as a symbiotic relationship

Lloyds Raises GBP8.5 Billion In Bond Exchange

LONDON -(Dow Jones)- Lloyds Banking Group PLC (LYG) Monday said it has raised GBP8.5 billion in new debt, most of which can convert to equity in times of stress, marking a major step in a GBP22.5 billion recapitalization that helps the U.K. bank move out from under the shadow of government support.

Later Monday, the bank is to price and set shareholder entitlement levels on a GBP13.5 billion rights issue.

Lloyds said the GBP8.5 billion of contingent core Tier 1 and core Tier 1 notes through its non-U.S. bond exchange offer, and said the U.S. exchange offer is already heavily over-subscribed.

As part of the move to strengthen its finances, the company earlier this month launched an offer to exchange some of its existing bonds for new enhanced capital notes, a type of bond, called contingent-capital securities, that convert to equity or equity-like instruments if a bank hits certain stress levels.

Lloyds said the non-U.S. offer attracted strong investor demand and the company had received offers to exchange GBP12.51 billion in existing securities.

The company said GBP6.99 billion of ECNs will be issued, while a further GBP1.48 billion will be issued in the form of new shares, additional ECNs and/or paid in cash on the late settlement date.

"We are pleased to announce that our non-U.S. Exchange Offer has been very positively received by investors and significantly oversubscribed," the company said, adding that "today's announcement represents an important milestone in our capital-raising exercise."

The second offer, which is a U.S. bond exchange offer, has already received over $2.7 billion of offers to exchange, even though the original maximum ECN available was only $800 million, Lloyds said Monday. The company will now increase this amount to $985.6 million and will announce the results of this offer Dec. 8.

The contingent-convertible bonds, or "CoCos," are designed to strengthen Lloyds' finances and are a crucial component of the 43.5%-government owned bank's plan to wriggle free of a government insurance program that would have added to its state aid bill.

The new form of securities are expected to be adopted by other banks looking for fresh capital, though analysts have mixed views on their appeal to investors.

Gary Jenkins, head of fixed-income research at Evolution Securities, said Monday that the success of the Lloyds' exchange doesn't necessarily mean CoCos will become "the next big thing."

"The real test would be if bond investors were prepared to invest in CoCos that were being issued as a new instrument in exchange for cash, rather than for existing impaired bonds," he said.

Lloyds and U.K. peer Royal Bank of Scotland Group PLC (RBS) were among many European banks that needed government bailout amid one of the worst financial crisis on record.

In exchange for the help they received, they now have to fulfill requirements from the European Commission, which wants to make sure aided banks aren't in competitive advantage to those that stayed independent.

Lloyds shareholders will vote on the capital-raising at an extraordinary general meeting in Birmingham on Thursday.

Surely what is really happening is that EU main countries are trying to take away UK financial income which aided by FSA they are in grave danger of doing.

Very confusing with the TERF. But everyone wants to speculate at what price the R I will be..........

Lloyds rights issue set for 60% discount
By Lee Wild ----Mon 23 Nov 2009

Lloyds Banking Group 90.60p +2.78%

LONDON (SHARECAST) - Lloyds Banking Group prices its 13.5bn rights issue, the biggest cash call in history, tomorrow and the maths suggest investors will be offered the shares somewhere between 33 and 37p.

The lender has said the final offer price will be either 15p, or a discount of between 38% and 42% to the theoretical ex-rights price (TERP), expected to be about 55p, whichever is the higher.

Its shares had traded as low as 83p after the bank announced its 22.5bn fundraising on 3 November, but theyve improved since, which will increase the rights price.

Investors liked the response to the part-nationalised lenders offer to swap existing debt for contingent capital, which encountered strong demand.

Offers to exchange 12.51bn of existing securities were received, of which 8.78bn have been accepted, said Lloyds today. Its issuing almost 7bn of enhanced capital notes (ECN), a new type of hybrid debt, plus a further 1.48bn of shares, cash or ECNs.

The company has also upped the maximum number of ECNs, or CoCos (contingent convertible core Tier 1 securities), it will issue as part of the US exchange offer from $800m to $986m.

The government is taking up its rights as part of the rights issue, investing 5.7bn net of an underwriting fee, to keep its stake in Lloyds at 43%.

Earlier this month, the UKs third-largest lender said it was raising 21bn from a 13.5bn rights issue and 7.5bn swap of existing debt for contingent capital.

The bond financing, later increased by 1.5bn due to high demand, counts towards core tier one capital and convert into equity in the event of a "stress scenario", such as Lloyds' core tier one ratio falling below 5%.

This massive fundraising exercise is all part of Lloyds plan to avoid being tied into the governments 260bn toxic asset protection scheme. Its already agreed to pay a 2.5bn break fee, having already received cover since the scheme was implemented earlier this year.

Shareholders will get their say later this week when Lloyds tries to convince them this is all a great idea.

A specially-convened meeting in Birmingham will house largely supportive institutional shareholders, although there are 2.8m private investors who may need a little more convincing.

Trading at 91.38p +3.20p

best of the day

Lloyds axes 800 jobs on Equitable contract loss

The latest cull at the bank, which is 43 per cent owned by the British taxpayer, comes at its offices in Aylesbury, Buckinghamshire, following the loss of a key contract with Equitable Life, the mutual life insurer.

The cuts, described by unions as a "body blow", come on top of a total 12,500 jobs already axed since the bank was created by the takeover of HBOS by Lloyds TBS in January and will be particularly felt in Aylesbury, where Lloyds is the biggest private sector employer.

i hope im in for a earner fellows bin sittin on 24000 of them for a year now

Rights Issue Price Announcement (Lloyds)

Lloyds Prices Rights Issue At 37p/Share To Raise GBP13.5 Billion





By Patricia Kowsmann
Of DOW JONES NEWSWIRES

LONDON -(Dow Jones)- Lloyds Banking Group PLC (LYG) Tuesday priced the largest-ever rights issue at 37 a share, a 60% discount from Monday's closing price.

The U.K. bank will offer 1.34 rights share for every one existing share in an effort to raise GBP13.5 billion, it said in a statement.

The rights offer is part of a plan announced last month to raise GBP22.5 billion in fresh capital, including through the conversion of debt, as the bank tries to avoid an expensive insurance scheme that would otherwise see the government increasing its stake in Lloyds to over 60% from 43% currently.

The U.K. bank said the figure was at a 38.6% discount to the theoretical ex-rights price, the bottom of the 38% to 42% range previously given. TERP is the calculated price for shares after issue of new stock.

The offer is subject to shareholders approval Thursday in Birmingham.

The U.K. government said it will take up its part in the issue, which is also fully underwritten.

The new shares will represent 57% of Lloyds' share capital, the bank added.

-By Patricia Kowsmann, Dow Jones Newswires. Tel +44(0)207-842-9295, patricia.kowsmann@dowjones.com

So have I got this right? I'm already entitled to my 1.34 per share as the record date is past. Right now I can sell them all at around 92p and use the proceeds to buy the rights issue @ 37p after which I will own 1.34 times more shares than now plus a lump of cash to eventually buy more at the ex rights price.

Sounds too good to be true.

RIGHTS ISSUE STATISTICS

+--------------------------------------------------------------+--------------------+
| Issue Price per New Share | 37 pence |
+--------------------------------------------------------------+--------------------+
| Discount of Issue Price to the Closing Price on 23 November | 59.5 per cent. |
| 2009 (being the last practicable date before the publication | |
| of this announcement) | |
+--------------------------------------------------------------+--------------------+
| Discount of Issue Price to theoretical ex-rights price based | 38.6 per cent. |
| on the Closing Price on 23 November 2009 | |
+--------------------------------------------------------------+--------------------+
| Basis of Rights Issue | 1.34 New Shares | for every 1 | Existing Ordinary | Share |
+--------------------------------------------------------------+--------------------+
| Number of Ordinary Shares in issue as at the date of this | 27,161,682,366 |
| announcement | |
+--------------------------------------------------------------+--------------------+
| Number of Ordinary Shares to be issued by Lloyds Banking | 36,505,088,579 |
| Group pursuant to the Rights Issue | |
+--------------------------------------------------------------+--------------------+
| New Shares as a percentage of Actual Enlarged Share Capital | 57.3 per cent. |
| of Lloyds Banking Group immediately following completion of | |
| the Rights Issue(1) and Share Subdivision | |
+--------------------------------------------------------------+--------------------+
| Expected gross proceeds of the Rights Issue receivable by | GBP13,506,882,774 |
| Lloyds Banking Group | |
+--------------------------------------------------------------+--------------------+
(1) On the assumption that no further Ordinary Shares are issued as a result of
the exercise of any options under any Lloyds Banking Group Employee Share Plans
between the date of this announcement and the closing of the Rights Issue.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS
+--------------------------------------------------------------+-------------------+
| Record Date for entitlement under the Rights Issue for | Close of business |
| Qualifying CREST Shareholders and Qualifying Non-CREST | on 20 November |
| Shareholders and for holders of Limited Voting Shares for | 2009 |
| the LVS Capitalisation Issue | |
+--------------------------------------------------------------+-------------------+
| Announcement of Issue Price and entitlements of Qualifying | 7.00 a.m. on 24 |
| Shareholders | November 2009 |
+--------------------------------------------------------------+-------------------+
| Latest time and date for receipt of Forms of Proxy for the | 11.00 a.m. on 24 |
| General Meeting | November 2009 |
+--------------------------------------------------------------+-------------------+
| General Meeting | 11.00 a.m. on 26 | November 2009 |
+--------------------------------------------------------------+-------------------+
| LVS Record Date for entitlement under the Rights Issue for | 4.30 p.m. on 26 |
| Qualifying LV Shareholders | November 2009 |
+--------------------------------------------------------------+-------------------+
| Share Subdivision becomes effective | Close of business | on 26 November |
2009 |
+--------------------------------------------------------------+-------------------+
| Despatch of Provisional Allotment Letters (to Qualifying | 26 November 2009 |
| Non-CREST Shareholders only) | |
+--------------------------------------------------------------+-------------------+
| Start of subscription period | 26 November 2009 |
+--------------------------------------------------------------+-------------------+
| Admission | 8.00 a.m. on 27 | November 2009 |
+--------------------------------------------------------------+-------------------+
| Dealings in New Shares, nil paid, commence on the London | 8.00 a.m. on 27 |
| Stock Exchange | November 2009 |
+--------------------------------------------------------------+-------------------+
| Existing Ordinary Shares marked "ex-rights" by the London | 8.00 a.m. on 27 | November 2009 |
+--------------------------------------------------------------+-------------------+
| Nil Paid Rights credited to stock accounts in CREST | 8.00 a.m. on 27 |
| (Qualifying CREST Shareholders only) | November 2009 |
+--------------------------------------------------------------+-------------------+
| Nil Paid Rights and Fully Paid Rights enabled in CREST | 8.00 a.m. on 27 |
| | November 2009 |
+--------------------------------------------------------------+-------------------+
| Recommended latest time for requesting withdrawal of Nil | 3.00 p.m. on 4 |
| Paid Rights and Fully Paid Rights from CREST (i.e. if your | December 2009 |
| Nil Paid Rights and Fully Paid Rights are in CREST and you | |
| wish to convert them to certificated form) | |
+--------------------------------------------------------------+-------------------+
| Latest time for depositing renounced Provisional Allotment | 3.00 p.m. on 8 |
| Letters, nil or fully paid, into CREST or for | December 2009 |
| dematerialising Nil Paid Rights or Fully Paid Rights into a | |
| CREST stock account (i.e. if your Nil Paid Rights and Fully | |
| Paid Rights are represented by a Provisional Allotment | |
| Letter and you wish to convert them to uncertificated form) | |
+--------------------------------------------------------------+-------------------+
| Latest time and date for splitting Provisional Allotment | 3.00 p.m. on 9 |
| Letters, nil or fully paid | December 2009 |
+--------------------------------------------------------------+-------------------+
| Latest time and date for acceptance, payment in full and | 11.00 a.m. on 11 |
| registration or renunciation of Provisional Allotment | December 2009 |
| Letters | |
+--------------------------------------------------------------+-------------------+
| Dealings in New Shares, fully paid, commence on the London | 8.00 a.m. on 14 |
| Stock Exchange | December 2009 |
+--------------------------------------------------------------+-------------------+
| New Shares credited to CREST accounts | by 14 December |
| | 2009 |
+--------------------------------------------------------------+-------------------+
| Despatch of definitive share certificates for the New Shares | by 29 December 2009
| in certificated form |
+--------------------------------------------------------------+-------------------+

You wish Kernow! Share sub division doesn't become effective until close of trading on the 26th Nov, so that is the date you want to watch.

kernow

re -So have I got this right? I'm already entitled to my 1.34 per share as the record date is past

Announcement of Issue Price and entitlements of Qualifying Shareholders 7.00 a.m. on 24 November 2009

The Qualifying date at 7.00 am ( this morning is the important date) . The record date is for the registrars paper work.

kernow

re -So have I got this right? I'm already entitled to my 1.34 per share as the record date is past

you will not be able to get the intitelment till it goes Ex - date , and that is the day after the AGM


Once Dealings in New Shares, nil paid, commence on 8.00 a.m. on 27 November 2009 ........... then you can sell, if you need to raise money to buy the R I @ 37p

OK guys - thank you.

any thoughts on lloyds share price after the x rights? with this amount of shares it could drop to 40pence ish ?

Yeah .... and it may not.

Broker comment (WestLB) this morning:
"We change our rating on Lloyds Banking Group (LBG) from Neutral to Add,
and set our target price at 105p (cum-rights). We have revised our estimates
following the announcement of the new restructuring plan, the rights issue
and the Q3 interim management statement (IMS) on 3 November. We have
now also taken into account the rights price of 37p announced this morning.
LBGs share price has underperformed the sector by c.20% since the end of
August. We believe that a significant layer of uncertainty has been removed
now that the rights price and the nature of the EC restructuring plan are
known. Nevertheless we acknowledge that certain risks remain, especially for
banks undergoing an EC restructuring plan, and in which the government
owns a significant stake. We therefore set our target price at a 10% discount
to the intrinsic value (IV). As the 105p target price is more than 10% above the
current share price, we change our rating from Neutral to Add."

ex rights sp will be around 62p at current 94p

i have lloyds shares will i be able to sell the right to the new shares , without actually buying them ?