Commentary & Deal Flow

Final Books: £1.1bn (ex JLM)

Launched: 20NC10: £150m @ UKT+250bp - Books > £1.1bn (ex JLM)
Guidance: 20NC10: UKT+260a - Books >£900m (ex JLM)
Book Update: Books > £550m (ex JLM)
IPTs: 20NC10: UKT+280a (~7.97% annual yield)

• Issuer: LV Bonds plc
• LEI: 213800Q3EZSYWUQ1UM74
• Guarantor: Liverpool Victoria Financial Services Limited
• Issuer / Guarantor Rating: BBB+ (Stable) (S&P)
• Issue Ratings (expected): BBB- (S&P)
• Instrument: Fixed Rate Reset Callable Guaranteed Tier 2 Subordinated Notes due 2046
• Size: £150m
• Status and Subordination: Direct, unsecured and subordinated obligations of the Issuer
• Status of the Guarantee: The Notes will (subject as provided in the Conditions) be irrevocably guaranteed by the Guarantor on a direct, unsecured and subordinated basis
• Settlement / Issue Date: 05-May-26 (T+4)
• Maturity Date: 05-May-46
• Reset Date: 05-May-36 (the “First Reset Date”) and each fifth anniversary thereafter
• Reference Gilt: UKT 4.25% due 07-Mar-36
• Hedge Ratio: 95%
• Hedge Deadline: 14:20 LDN
• Redemption at the option of the Issuer: Subject to Conditions 8(b) and 8(h), the Issuer may, at its option, redeem all (but not some only) of the Notes on the First Reset Date or on any Interest Payment Date thereafter, in each case at their principal amount, together with all Arrears of Interest (if any) and any other accrued and unpaid interest to (but excluding) the date of redemption.
• Interest: From (and including) the Issue Date to (but excluding) the First Reset Date at [●] per cent. per annum, and thereafter at the applicable Reset Rate of Interest.
• Reset Rate of Interest: Reset Reference Rate (5-year gilt yield) plus the Reset Margin (Initial Margin + 100bps).
• Interest Payment Dates: Interest will (subject to deferral of interest as provided below and in the Conditions) be payable annually in arrear on 5 May in each year, commencing 05-May-27
• Day-Count Fraction / Business Days: Actual / Actual (ICMA), London
• Solvency Condition: Other than in circumstances where a Guarantor Winding-Up has occurred or is occurring, all payments under or arising the Notes or Trust Deed shall be conditional upon the Issuer (in the case of payments by the Issuer) or the Guarantor (in the case of payments by the Guarantor) being solvent (as defined in Condition 3(c)) at the time for payment by the Issuer, or as appropriate, the Guarantor, and no amount shall be due or payable under or arising from the Notes or the Trust Deed (including, without limitation, the Guarantee) unless and until such time as the Issuer, or as appropriate, the Guarantor could make such payment and still be solvent immediately thereafter.
• Optional Deferral of Interest: The Issuer or the Guarantor may elect in respect of any Interest Payment Date for payment of the accrued but unpaid interest to that date to be deferred (in whole or in part) for any reason.
• Mandatory Deferral of Interest: Payment of interest on the Notes and any Guaranteed Amounts are required to be deferred (subject to exceptional waiver of deferral by the Relevant Regulator in certain circumstances):
• • on each Regulatory Deficiency Interest Deferral Date (being an Interest Payment Date in respect of which a Regulatory Deficiency Interest Deferral Event has occurred and is continuing); or
  • if such payment could not be made in compliance with the Solvency Condition.
    The deferral of interest as described above will not constitute a default by the Issuer or the Guarantor under the Notes or the Trust Deed for any purpose.
• Arrears of Interest: Any interest on the Notes not paid on an Interest Payment Date as a result of (i) the exercise by the Issuer or the Guarantor of its discretion to defer such payment of interest, (ii) any mandatory deferral of such payment of interest or (iii) the operation of the Solvency Condition shall, to the extent and so long as the same remains unpaid, constitute “Arrears of Interest”. Arrears of Interest shall not themselves bear interest, and will be payable as set out in Condition 6(f).
• Redemption at Maturity: Unless previously redeemed or purchased and cancelled, the Issuer will (subject to deferral of redemption as provided below and in the Conditions) redeem the Notes on the Maturity Date at their principal amount together with all Arrears of Interest (if any) and any other accrued and unpaid interest to (but excluding) such date.
• Special Redemption Events: Subject to Conditions 8(b) and 8(h), the Issuer may at its option redeem all (but not some only) of the Notes at their principal amount together with all Arrears of Interest (if any) and any other accrued and unpaid interest to (but excluding) the date of redemption in the event of the occurrence of specified tax events, a Capital Disqualification Event, a Ratings Methodology Event (or if a Ratings Methodology Event will occur within six months) or if 75% or more of the aggregate principal amount of the Notes originally issued has been (or, in certain circumstances, will be) purchased by the Issuer, the Guarantor or any other member of the Insurance Group and cancelled, all as described in Condition 8
• Substitution or Variation: Subject to Conditions 8(b) and 8(h), the Issuer may, at its option, at any time substitute all (but not some only) of the Notes for, or vary the terms of the Notes so that they become or remain, Qualifying Tier 2 Securities or (as the case may be) Rating Agency Compliant Securities, in the event of the occurrence of specified tax events, a Capital Disqualification Event or a Ratings Methodology Event (or if a Ratings Methodology Event will occur within six months), all as described in Condition 8.
• Mandatory Deferral of Redemption: No Notes shall be redeemed on the Maturity Date or on any earlier date set for redemption pursuant to Condition 8 if a Regulatory Deficiency Redemption Deferral Event has occurred and is continuing or would occur if redemption were made on the otherwise applicable redemption date pursuant to Condition 8. If redemption of the Notes does not occur due to a Regulatory Deficiency Redemption Deferral Event or as a result of the Solvency Condition not being satisfied with respect to the relevant payment of principal, such redemption shall be suspended and shall occur thereafter only in accordance with Condition 8(b). The deferral of redemption as described above will not constitute a default by the Issuer or the Guarantor under the Notes or the Trust Deed for any purpose.
• Rights in an Issuer Winding-Up: If an Issuer Winding-Up occurs at any time when a Guarantor Winding-Up has also occurred or is occurring, the Trustee on behalf of the Noteholders may claim or prove in such Issuer Winding-Up for (in lieu of any other amount) an amount equal to the outstanding principal amount of the Notes together with all Arrears of Interest (if any) and any other accrued but unpaid interest on the Notes and any damages awarded for breach of any obligations under the Notes and the Trust Deed, such claims being subordinated as provided in Condition 3(b) and the Trust Deed. If and to the extent that the amount that the Noteholders could recover in such Issuer Winding-Up would exceed the amount per Note that would have been paid in respect of such Note in such Guarantor Winding-Up (had the Note been a subordinated obligation of the Guarantor for an amount equal to the relevant Guaranteed Amounts and ranking pari passu with the Guarantee), then the Noteholders shall, without the need for any further step or action, assign (and be treated as having assigned) irrevocably such excess amounts and the right thereto to the Guarantor. If an Issuer Winding-Up occurs at any time when a Guarantor Winding-Up has not also occurred or is not occurring, the Noteholders (in relation to any amount which they are entitled to receive in such Issuer Winding-Up in respect of, or arising under, the Notes and the Trust Deed) shall, without the need for any further step or action, assign (and be treated as having assigned) irrevocably such amounts and the right thereto to the Guarantor as consideration for the Guarantor’s agreement to assume, or procure the assumption by a Subsidiary of the Guarantor of, the obligations of the Issuer pursuant to, and in accordance with, Condition 4(c).
• Rights in a Guarantor Winding-Up: If a Guarantor Winding-Up occurs, the Trustee on behalf of the Noteholders may claim or prove in such Guarantor Winding-Up for (in lieu of any other amount) an amount equal to the outstanding principal amount of the Notes together with all Arrears of Interest (if any) and any other accrued but unpaid interest on the Notes and any damages awarded for breach of any obligations under the Notes and the Trust Deed, such rights and claims being subordinated as follows. If a Guarantor Winding-Up occurs, claims against the Guarantor will be subordinated to the claims of all Senior Creditors (as defined in the Conditions) but shall rank:
• • (A) at least pari passu with all claims in respect of (i) all other subordinated obligations of the Guarantor which constitute, and all claims relating to a guarantee of, or other like or similar undertaking or arrangement given or undertaken by the Guarantor in respect of, any obligations of any other person which constitute, or (in either case) would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital and (ii) all obligations which rank, or are expressed to rank, pari passu therewith (together, “Parity Obligations”); and
  • (B) in priority to (a) the claims in respect of (i) any subordinated obligations of the Guarantor which rank, or are expressed to rank, junior to the Guarantee, and (ii) all obligations of the Guarantor which constitute, and all claims relating to a guarantee of, or other like or similar undertaking or arrangement given or undertaken by the Guarantor in respect of, any obligations of any other person which constitute, or (in either case) would but for any applicable limitation on the amount of such capital constitute, Tier 1 Capital and all obligations which rank, or are expressed to rank, pari passu therewith, and (b) the claims of members of the Guarantor (under any applicable legislation relating to the winding-up of companies limited by guarantee and/or of insurers) in their capacity as members of the Guarantor (together, the “Junior Obligations”).
• No double recovery: Amounts received by Noteholders in an Issuer Winding-Up shall reduce pro tanto the amounts payable by the Guarantor under the Guarantee, and amounts received by Noteholders in Guarantor Winding-Up shall reduce pro tanto the amounts payable by the Issuer under the Notes and the Trust Deed.
• No set-off, etc.: Noteholders will, by virtue of holding any Note, waive any right of set-off, compensation, counterclaim, netting or retention that such Noteholder might otherwise have against the Issuer or the Guarantor in respect of or arising under the Notes or the Trust Deed (including the Guarantee) whether prior to or in the event of an Issuer Winding-Up or Guarantor Winding-Up (as applicable).
• Substitution of the Issuer or Guarantor: The Conditions and the Trust Deed will contain provisions requiring the Trustee to agree with the Issuer and the Guarantor, without the consent of the Noteholders, but subject to certain conditions:
• • (i) to the substitution of the Guarantor or its successor in business in place of the Issuer as principal debtor under the Notes; or
  • (ii) (subject to the Notes remaining unconditionally and irrevocably guaranteed on a subordinated basis by the Guarantor), to the substitution of a Subsidiary or parent company of: (a) the Issuer or its successor in business or (b) the Guarantor or its successor in business, in place of the Issuer or any previous substitute under Condition 15 as principal debtor under the Notes; or
  • (iii) to the substitution of a successor in business to the Guarantor in place of the Guarantor or any previous substitute under Condition 15
• Transfer of Business of the Guarantor: In connection with any transfer of the whole or a substantial part (as defined in Condition 17) of its business to (a) another body in accordance with Part VII (Control of Business Transfers) of the FSMA or (b) a single legal entity where such transfer is pursuant to the exercise by the Relevant Regulator under the Financial Services Compensation Scheme of its powers in connection with any applicable law, rule or regulation, the Guarantor shall procure that, subject to satisfaction of the Regulatory Clearance Condition, there shall be included in the transfer all the liabilities and obligations of the Guarantor as obligor under the Guarantee
• Enforcement: The rights of Noteholders to enforce payment obligations in respect of the Notes and the Trust Deed (including the Guarantee) are limited, as provided in Condition 11
• Target Market/PRIIPs/ CCI Regulations: Manufacturer target market (UK MiFIR product governance) is eligible counterparties and professional investors only (all distribution channels). No EU PRIIPs key information document (KID) or disclosure document required by the FCA Product Disclosure Sourcebook (DISC) has been prepared as not available to retail in the EEA or in the UK.
• Selling Restrictions: Reg S, Category 2. TEFRA not Applicable. Restrictions apply in the UK, EEA, Switzerland and Hong Kong. No sales in Italy. Singapore: institutional investor and accredited investors only. Other restrictions apply - see the Preliminary Admission Particulars.
• Stabilisation: Relevant stabilisation regulations including FCA/ICMA apply
• Governing Law: English Law
• Statutory Loss Absorption Powers: Each Noteholder, by its acquisition of any Note, will acknowledge and accept that any amounts due under the Notes or under the Trust Deed (including the Guarantee) may be subject to any applicable Statutory Loss Absorption Powers and will agree to be bound by the effect of the exercise of Statutory Loss Absorption Powers. In addition, the Issuer or the Guarantor shall be entitled to amend the Conditions and the Trust Deed, without Noteholder consent, to ensure that the Notes are subject to (or are otherwise acknowledged as being so subject to) any applicable Statutory Loss Absorption Powers.
• Listing: London Stock Exchange plc’s International Securities Market
• Settlement: Euroclear and Clearstream, Luxembourg
• Form/Denominations: Registered / £100k and integral multiples of £1k in excess thereof
• ISIN / Common Code: XS3336934701 / 333693470
• Use of Proceeds: General corporate purposes, including the refinancing of existing indebtedness
• Documentation: Stand-alone format. Preliminary Admission Particulars dated 27-Apr-26 and final Admission Particulars to be published prior to the Issue Date.
• Advertisement: This communication does not constitute a prospectus for the purposes of the Public Offers and Admissions to Trading Regulations 2024 and the Prospectus Rules: Admission to Trading on a Regulated Market sourcebook and no such prospectus is required to be (or will be) prepared in connection with the issuance of the Notes. Investors should not subscribe for or purchase the Notes except on the basis of information in the final Admission Particulars (including the section ‘Risk Factors’ therein) which, when published, will be available on the website of the Issuer (https://www.lv.com/about-us/company-information/returns) and of the London Stock Exchange (https://www.londonstockexchange.com)
• Joint Lead Managers: Barclays Bank PLC (B&D), Jefferies International Limited
• Timing: Books subject at 11:50 LDN.