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Lloyd's to raise debt


LONDON— Lloyd's of London has announced that it is returning to the debt markets with a benchmark issue of Tier 1 perpetual subordinated debt.

Lloyd's previously raised £500 million ($996.7 million) of lower Tier 2 debt three years ago.

The idea behind the issue is to strengthen central assets, reduce the cost of mutuality to members and give greater flexibility and liquidity to Lloyd's, the market said.

An investor roadshow in the United Kingdom will determine the size and terms of the transaction, and there will be an application to list the debt on the London Stock Exchange.

Chief executive officer, Richard Ward, described the return to the debt market as a testament to strength of Lloyd's: "In the last year we have reported record profits, been upgraded to A+ by two rating agencies, and seen a line drawn under the past with the deal between Equitas Ltd. and Berkshire Hathaway Inc.," he said.

In a statement, Lloyd's said that it expected the debt to be rated A- (Stable Outlook) by Standard & Poor's and BBB (Positive Outlook) by A.M. Best. Co. Inc.