F Classification: Public AGENDA Introductions Scheme Comparisons - PowerPoint PPT Presentation

Classification: Public F

Classification: Public AGENDA • Introductions • Scheme Comparisons • Coronavirus Business Interruption Loan Scheme (‘CBILS’) • Coronavirus Large Business Interruption Loan Scheme (‘CLBILS’) • Covid Corporate Financing Facility (‘CCFF’) • UK Export Finance (‘UKEF’) • Q&A 2

Classification: Public Introductions James Galea Richard Brown Glenn Forbes Head of Complex Lending Products Head of Lending Product Management, Managing Director, Corporate Commercialisation, Client Asset Client Asset Management, Debt Capital Markets, Management, Lloyds Bank Commercial Banking Lloyds Bank Commercial Banking Lloyds Bank Commercial Banking Olivier Khalife Craig Leighton Senior Adviser Export Finance, Director, Trade and Global Transaction Banking, Commodity Finance, Lloyds Bank Commercial Banking Global Transaction Banking 3

Classification: Public COVID-19 UK Government Funding Schemes CBILS CLBILS CCFF Government-backed guarantee scheme to support viable customers that Government-backed guarantee scheme to support viable customers that have Provision of funding to businesses through Description have been impacted by Coronavirus been impacted by Coronavirus purchasing of CP Availability from 23/3/20 to 30/09/20 (6 months) 20/04/20 to 20/10/20 or as extended 23/03/20 to 23/03/21 < GBP45m Turnover IG (rated or implied) Corporates and make > GBP 45m Turnover Turnover/ Credit “meaningful contribution to UK economy”; (EUR 50m Equivalent) Qualification CP issuer (new or existing) Max 20% refinance (portfolio) Max 20% refinance (portfolio) Short-term rating A3 / P3 / F3 / R3 a) The finance will hep the SME trade out in short to or above; Long-term rating of medium term EU ‘in difficulty’ tests , plus viable pre- and post-Covid-19 impact BBB-/ Baa3 / BBB- / BBB low or Viability No Change + b) The SME is not subject to collective insolvency above. If not public IG rating assessed by LBG c) If the facility is granted the SME will not become Banks’ internal rating as at 1 st insolvent in the short to medium term March 2020 A1/P1/F1/R1 Up to £1bn £50m >£250m turnover Loan Amount & 3 months to 3 years bullet/ amortisation 3 months – 6 years Up to £5m £25m <£250m turnover A2/P2/F2/R2 Up to £600m T enor subject to normal commercial principles Further limited by EU/HMG tests A3/P3/F3/R3 Up to £300m Term Lending Term Loan & Revolving Credit Facility Product Invoice, Asset and working capital finance also possible if developed by Commercial Paper Invoice and Asset Finance expansion possible LBG Spread + Sterling Overnight Index Swap 0% customer rate (OIS) rate First 12 months Bank reimbursed by Govt. for customer rate due Base Rate + Margin A1/P1/F1/R1 20bps + OIS Interest Rate Revert to customer rate which takes into account Calculated on a commercial basis A2/P2/F2/R2 40bps + OIS including the effects of the government guarantee the effects of the guarantee After 12 months Base Rate with option to convert to fixed rate A3/P3/F3/R3 60bps + OIS through subsequent informed choice sale Arrangement Fee 0% 0% (but may be charged by exception) Charge borne by Bank: 25bps – 200bps Guarantee Fee Charge borne by Bank: 50 bps Year 1; 100 bps Years 2 & 3 dependent on tenor & client size N/A Guarantee 80% 80% Amount & Type Proportional Proportional > £250k – no change Equivalent with at least 90% of the security you have granted for any financial Security Unsecured < £250k – removal of requirement to exhaust security indebtedness, excluding asset and invoice finance Other Notable Dividend Restriction, Restriction on Transfer by bank, Standard Documentation Terms eligibility criteria as reps/ warranties Conditions for Client option + None Early Repayment Customary mandatory prepayment events N/A Capital All CBIL facilities will have 6mths CRH at the start of the loan. Bullet repayment / repayment structure agreed case-by-case Repayment Hols Further CRH available on request, subject to Credit Excluded Banks and Insurance Companies; Financial Institutions; State Funded Primary and Secondary Education Financial Services Sectors State Funded Primary and Secondary Education Less than £45m Turnover Greater than £45m Turnover IG (rated or equivalent)

Classification: Public Coronavirus Business Interruption Loans Scheme (‘CBILS’) Scheme Overview GTB – Trade Product, May 2020

Classification: Public CORONA BUSINESS INTERRUPTION LOAN SCHEME (CBILS)  Base Rate Term Loan ( other variants across Overdraft, Asset Finance / Invoice Finance Corona may be available) Business  £25k up to £5m loan amount. Interruption  Scheme No arrangement fee.  First 12months interest free (covered by the Business Interruption Payment)  First 6mths capital repayment holiday,  Customer remains 100% liable for the loan  Supported by 80% guarantee from the British Business Bank  No guarantee fee payable by customer throughout life of loan Key Points:  Launched on 23/3 to support customers impacted by COVID.  Available across 40+ accredited providers.  Has undergone a number of iterations to extend the support offered by the scheme.  Customers will require to satisfy three main areas as part of application  Eligibility,  Undertaking in Difficulty  Viability 6

Classification: Public CORONA BUSINESS INTERRUPTION LOAN SCHEME (CBILS) Must be impacted by Covid-19. UK based Small or Medium businesses with 50%+ of consolidated group turnover from trading. Maximum £45m consolidated group turnover. Purpose for working capital, to support BAU trading. Eligibility Maximum loan must be i) less than double annual wages bill OR ii) less than 25% of 2019 turnover OR iii) appropriate to the liquidity need of the customer. Certain sectors are ineligible (Banks, Insurance Companies, public sector. Full list available). Certain sectors may not be able to borrow the full amount (aquaculture, agriculture, transport) The company must be able to attest that it has not had:  accumulated losses of more than half of its subscribed share capital for limited companies, or for unlimited liability companies its capital; or Undertaking  started, or had fulfilled the criteria to be put into, collective insolvency proceedings; or in Difficulty  previously received rescue aid that was yet to be reimbursed (or, in the case of a guarantee, terminated); or  received restructuring aid, and was still under a restructuring plan; The company have been viable prior to the Corona Crisis. Viability You must have a business borrowing proposal which the lender would consider viable, were it not for the current pandemic 7

Classification: Public Coronavirus Large Business Interruption Loans Scheme (‘CLBILS’) Scheme Overview GTB – Trade Product, May 2020

Classification: Public CLBILS - Background Following the launch of Coronavirus Business Interruption Loan Scheme (‘ CBILS ’) and Covid Corporate Financing Facility (‘ CCFF ’) at the end of March, the Chancellor of the Exchequer announced a new Coronavirus Large Business Interruption Loan Scheme (‘ CLBILS ’) on 3rd April to help support UK corporates that are too large for CLBILS and ineligible for CCFF (either too small to access commercial paper or sub investment grade). Coronavirus Large Business Interruption Loan Scheme  The CLBILS provides support to large businesses under the exceptional circumstances caused by the outbreak of COVID-19  The loan is provided under the CLBILS managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy and Industrial Strategy  The scheme can provide funding for eligible and viable businesses, across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cash flow  It is a UK Government backed loan guarantee scheme  The scheme is intended to allow businesses negatively impacted by COVID-19 who meet the criteria for the CLBIL scheme to borrow  The Department for Business Energy and Industrial Strategy (BEIS) provide the Accredited Lender with a limited guarantee for up to 80% of the balance of an eligible CLBIL  However, the Borrower remains liable for 100% of the outstanding debt, including any accumulated interest, even if the Government guarantee has paid out  No guarantee fee is payable by the Borrower to the Government under CLBILS, but note that the Bank does pay a guarantee fee to the Government  The interest rate is charged at the Bank of England Bank Rate (the “Base Rate”) + margin, which will be agreed at the outset. This means the interest rate on the loan will track the Base Rate. Therefore, if Base Rate increases your repayments on the loan will increase  Borrowers under the scheme must not have used CCFF and shall not be permitted to use CCFF if they are using CLBIL 9