Lloyd’s syndicates are set to receive a windfall of £335m after the corporation ann-ounced it was returning to the debt market for a second time.
Those syndicates that have paid into the Lloyd’s Central Fund, levied at the rate of 0.75% of capacity, will be repaid later this year.
Lloyd’s announced, at an investor roadshow earlier this week, that it hoped to raise between £300m and £500m, through the issue of Tier 1 perpetual subordinated debt.
The amount raised, which will depend on market conditions and interests from UK investors, will be finalised by next week.
Any excess above the £335m set aside for syndicate loans will be used for general purposes, as with other assets of the Central Fund.
Richard Ward, chief executive of Lloyd’s, said: “Lloyd’s has never been in better shape. In the last year we have reported record profits, been upgraded to A+ by two rating agencies, and have seen a line drawn under the past with the deal between Equitas and Berkshire Hathaway. Our return to the debt markets is testament to this strength.
“One of the key advantages of the Lloyd’s platform is our mutual structure that enables businesses to generate superior returns. This issue will further strengthen the capital advantages of Lloyd’s, enhancing the return our members can achieve.”
This is the second time that Lloyd’s has raised subordinated debt, having previously raised approximately £500m of lower Tier 2 debt in 2004.