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Tesco Bank's third retail bond set to raise £200m

Tesco Bank has closed the offer period for its third retail bond (the “Bond”), having taken orders of £200 million in less than two weeks. Demand from retail investors exceeded Tesco Bank’s expectations, allowing Tesco Bank to close the offer period two days ahead of schedule.

The 5.00% p.a. 8.5-year Sterling Fixed-Rate Bond will be issued as part of Tesco Bank’s strategy to diversify its funding base ahead of new product launches, including the introduction of mortgages, subject to regulatory approval, in the coming months.

Benny Higgins, Chief Executive of Tesco Bank, commented,

"We’re delighted by the excellent response from retail investors to the third issue of Tesco Bank Retail Bonds.

"This not only provides an important source of funding, but also reflects a strong level of confidence in Tesco Bank and our longer-term plans."

The Bonds are intended to pay a fixed rate of interest of 5.00% each year for as long as investors hold them until 21 November 2020 when the Bonds are intended to return 100% of the face value of £100*. Investors can buy and sell the Bonds at any time before maturity** on the open market exclusively through stockbrokers. Investors should seek independent advice from their tax adviser regarding the ISA and SIPP eligibility of the Bonds. The Bonds are expected to be listed on the Official List of the UK Listing Authority and admitted to trading on both the regulated market of the London Stock Exchange and the London Stock Exchange’s ORB.

Tesco Bank issued its first retail bond in February 2011, raising £125 million. Its second retail bond, issued in November 2011, raised £60 million.

The Bond is not covered by the Financial Services Compensation Scheme (“FSCS”). In the event Tesco Bank cannot pay its debts in full or goes out of business, investors may lose some or all of their investment.

--ENDS--

For more information and media enquiries please contact:

Tesco Bank press office

+44 (0) 131 274 3630 

Notes to Editors:

*  Before any deductions for dealing costs or other charges that may apply.

**  During market hours and subject to normal market conditions. The Bonds will not be available to buy directly from Tesco Bank.  Authorised Distributors are Barclays Stockbrokers, Charles Stanley, Killik & Co, Redmayne-Bentley LLP, Selftrade (Execution Only), Smith and Williamson, Stocktrade (a division of Brewin Dolphin Ltd) and Williams De Broe. Investors can check prices on the London Stock Exchange website, just like shares.  Further information can be found at www.londonstockexchange.com/newissues.

About Us:

Tesco Bank’s goal is to make banking and insurance easier and better value for people who shop at Tesco. We’ve been around since 1997 and today we help more than 5 million customers manage their money every day. Our 4,000 colleagues serve our customers seven days a week from our three main centres in Edinburgh, Glasgow and Newcastle, and we are also available through online and mobile banking 24/7. Tesco Bank participates in the Chartered Banker Professional Standards Board.

Tesco Bank is a trading name of Tesco Personal Finance plc. Registered in Scotland No. SC173199. Registered Office: 2 South Gyle Crescent, Edinburgh, EH12 9FQ

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