Lloyds seals refinancing, state stake drops

Britain's Lloyds Banking Group rounded off a bumper, 23 billion pound ($36.1 billion) repair of its balance sheet, issuing a final tranche of new shares in a move that will trim the government's stake.

Lloyds, partly state-owned after being rescued by the taxpayer at the height of the financial crisis, will issue 3.14 billion new shares at 48.7 pence per share to close an earlier debt exchange programme, it said on Friday.

The issue price for the new shares, which will be used to pay off bondholders, is a 1.15 percent premium to Thursday's close. Shares in Lloyds were down 2 percent at 47.2 pence by 0938 GMT.

The bank had the opportunity of paying cash, but chose the most widely expected option paying in new shares, diluting the government's stake to 41 percent from 43 percent.

"Today's announcement marks the successful completion of our capital raising exercise," Lloyds said in a statement.

"We would like to thank our investors for their continued support."

Lloyds, Britain's largest retail banking group, raised 13.5 billion pounds in a record-breaking cash call last year, part of a bumper capital raising effort worth more than 23 billion pounds to help it avoid a state-backed scheme for bad debts.