Lloyds Bank says retail investors agree to bond buyback

(Corrects to say bonds worth nominal 58.5 mln stg)

LONDON, April 17 (Reuters) - Lloyds Banking Group said private retail investors had agreed to sell bonds worth a nominal 58.5 million pounds ($98.2 million) which had been issued to rescue the bank during the 2008/9 financial crisis.

Lloyds, which is 25 percent owned by the government, also confirmed that institutional investors had agreed to exchange 5 billion pounds worth of the instruments, known as enhanced capital notes, for new bonds.

The bank issued the bonds, which were designed to boost the bank's capital if it ran into trouble, in 2009. But new UK and European capital rules in force this year mean the bonds may no longer count as capital when the bank hits trouble.

($1 = 0.5955 British Pounds) (Reporting by Matt Scuffham; Editing by Paul Sandle)