State-controlled Lloyds in deal with cluster bomb manufacturer

 

Lloyds TSB has signed up to a multi-million dollar bond deal with the arms manufacturer Lockheed Martin despite growing condemnation of the British banking industry's continued investments in cluster bomb manufacturers.

Lloyds Securities Inc, the US offshoot of the British banking group, was part of a syndicate that helped Lockheed raise $2 billion through bond deals. A copy of the bond brochure obtained by The Independent shows Lloyds agreed to underwrite $10m (£6.4m) worth of bonds, which will prove controversial when UK tax payers still own 41 per cent of the bank.

The deal comes at a time of growing criticism over the Government's failure to plug a legal loophole that allows companies to invest in cluster bomb manufacturers despite a ban on them.

Britain is a signatory to the Cluster Munitions Convention, a global treaty forbidding the use, production, stockpiling and transfer of cluster bombs which has been signed by more than 100 countries.

Yet there is nothing to stop British companies investing in cluster bomb manufacturers as long as they don't directly invest in the bombs themselves.

This summer, The Independent revealed how banks including Barclays, RBS and Lloyds had invested millions in known cluster bomb manufacturers. RBS promptly severed ties with defence companies known to be involved in the industry, including Alliant Techsystems and Lockheed Martin. HSBC had already blacklisted cluster bomb manufacturers. Barclays is in the process of wrapping up any outstanding contracts with companies that have been highlighted by arms campaigners as cluster bomb makers.

At the same time, insurance company Aviva confirmed that Lockheed was one of 12 companies it had blacklisted for its continued involvement in cluster bomb manufacturing.

But Lloyds TSB, which was bailed out with an injection of £20bn of state funds, has pressed ahead with renewed investment in Lockheed. The involvement in last month's bond deal is just one of a long line of investments in the American arms manufacturer. In November 2009, Lloyds contributed $62.5m as part of a 12-bank syndicate when Lockheed issued bonds for a total of $1.5bn.

A Lloyds spokesman said: "Lloyds does not knowingly provide bank finance to support the manufacture of any weaponry that breaches UK, US, EU legislation or UN directives, or weapons which have been outlawed by international treaty."

Oliver Sprague, Amnesty International's UK arms programme director, said: "We would strongly urge Lloyds to... remove itself from all investments and funding agreements which are related to cluster-munition producing companies."

Start your day with The Independent, sign up for daily news emails
Life and Style
love + sex
Arts and Entertainment
Victoria Wood, Kayvan Novak, Alexa Chung, Chris Moyles
tvReview: No soggy bottoms, but plenty of other baking disasters on The Great Comic Relief Bake Off
Sport
Ashley Young celebrates the winner for Manchester United against Newcastle
footballNewcastle 0 Man United 1: Last minute strike seals precious victory
Life and Style
Tikka Masala has been overtaken by Jalfrezi as the nation's most popular curry
food + drink
Arts and Entertainment
Seth Rogan is one of America’s most famous pot smokers
filmAmy Pascal resigned after her personal emails were leaked following a cyber-attack sparked by the actor's film The Interview
News
Benjamin Netanyahu and his cartoon bomb – the Israeli PM shows his ‘evidence’
people
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
80s trailblazer: comedian Tracey Ullman
tv
News
i100
Life and Style
A statue of the Flemish geographer Gerard Kremer, Geradus Mercator (1512 - 1594) which was unveiled at the Geographical Congree at Anvers. He was the first person to use the word atlas to describe a book of maps.
techThe 16th century cartographer created the atlas
Arts and Entertainment
Stephen Tompkinson is back as DCI Banks
tvReview: Episode one of the new series played it safe, but at least this drama has a winning formula
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Christine McCleave: FP&A Analyst

£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
Leonora Carrington transcended her stolid background to become an avant garde star

Surreal deal: Leonora Carrington

The artist transcended her stolid background to become an avant garde star
LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

Education: LGBT History Month

Pupils have been discussing topics from Sappho to same-sex marriage
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

Cricket World Cup runs riot to make the event more hit than miss...

The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot