UPDATE 2-Lloyds bond exchange offer raised to 9 bln stg

* Lloyds ups non-US ECN exchange to 7 bln stg from 5.5 bln

* Lloyds may increase US exchange ECNs, if needed

* ECA remains unchanged at 1.5 bln stg (Adds detail, context)

By Alex Chambers

LONDON, Nov 11 (Reuters) - Lloyds (LLOY.L) said on Wednesday that it was increasing the size of its hybrid bond exchange to 9 billion pounds ($15.07 billion) due to strong investor demand.

The maximum amount of new bonds, known as enhanced capital notes (ECNs), under a non-US exchange offer may rise to seven billion pounds from 5.5 billion pounds.

The bank said all other parts of its exchange offer remain unchanged.

As part of an agreement on state aid with the European Union Lloyds is not able to pay coupons nor redeem bonds on its existing hybrids for two years.

Thus the motivation for bondholders to exchange is driven by a sweetener of between 1.5 and 2.5 percent additional yield if they do, and a very strong disincentive not to be left behind in the old Lloyds hybrid bonds.