UK lender Lloyds TSB is expected to re-open the European financial institution bond market for the first time since the Lehman Brothers bankruptcy last month, providing the freshest test yet of investor demand for bank debt in the wake of recent market turmoil and sweeping government intervention in the banking system.

Lloyds TSB, RBC Capital Markets and UBS are lead managing the new 10-year, sterling denominated transaction, which is not being issued with guarantees from the UK government, according to the sources at the UK bank. The leads said the deal is £400m (€513m) in size and has attracted £500m in investor demand.