SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.20549

FORM 6-K   

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

14 December, 2009

LLOYDS BANKING GROUP plc
(Translation of registrant's name into English)

5th Floor
25 Gresham Street
London
EC2V 7HN
United Kingdom

                   
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.

Form 20-F..X..Form 40-F.....

Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes .....No ..X..

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule
12g3-2(b): 82- ________

Index to Exhibits

Item

No. 1          Regulatory News Service Announcement, dated 14 December, 2009

                   re: Exchange of Preference Shares for ECNs

124

/09

14

 December

 2009

EXCHANGE OF PREFERENCE SHARES FOR ENHANCED CAPITAL NOTES

Lloyds Banking Group plc ("Lloyds Banking Group") announces that it has agreed to repurchase U.S.$15,400,000 of its U.S.$750,000,000 6.413 per cent. Non-Cumulative Fixed to Floating Rate Preference Shares (ISIN: GB00B3KSBH82), U.S.$183,610,000 of its U.S.$750,000,000 5.92 per cent. Non-Cumulative Fixed to Floating Rate Preference Shares (ISIN: GB00B3KSBJ07), U.S.$62,808,000 of its U.S.$750,000,000 6.657 per cent. Non-Cumulative Fixed to Floating Rate Preference Shares (ISIN: GB00B3KSBK12) and U.S.$14,840,000 of its U.S.$1,000,000,000 6.267 per cent. Non-Cumulative Fixed to Floating Rate Preference Shares (ISIN: XS0460002693), for new U.S.$276,658,000 8.50 per cent. Undated Enhanced Capital Notes (the "ECNs"). The ECNs will rank as upper tier two capital for regulatory purposes. It is expected that these exchanges will complete on or around 17 December 

2009.

-

 END 

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For further information:

Investor Relations

Michael Oliver

    +44 (0) 20 7356 2167

Director of Investor Relations

Email: michael.oliver@ltsb-finance.co.uk

Moira d'Arcy

    +44 (0) 20 7356 2164

Head of 

Debt 

Investor Relations

Email: 

moira

.

d'arcy

@ltsb-finance.co.uk

Media Relations

Sara Evans

+44 (0) 20 7356 2075

Media Relations Manager

Email: sara.evans2@lloydstsb.co.uk

This announcement and the information contained herein do not contain or constitute an offer for sale or the solicitation of an offer to purchase securities in the 

United States

. The ECNs referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States absent registration under the Securities Act or an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There will be no public offer of ECNs in the 

United States

.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                                                                          LLOYDS BANKING GROUP plc
                                                                                                (Registrant)

                                                                                                                               By:          M D Oliver

                                                                                                                               Name:     M D Oliver

                                                                                                                               Title:        Director of Investor Relations

Date:  14 December, 2009