It looks like plain sailing for Lloyds Banking Group's capital-raising plans after strong investor demand for its innovative CoCo bond issue, but other banks with similar plans may find the market isn't so sweet on a deal.

The UK group said on Monday that bond holders had snapped up an offer to exchange their existing notes for the CoCo - or contingent convertible - bonds. Indeed, demand has been so strong that the bank has expanded its original plan.