Standard Chartered on Monday offered to buy back or exchange more than $1.6 billion of subordinated Tier 2 bonds following similar offers from Royal Bank of Scotland and Lloyds Banking Group .

Banks have been taking advantage of low prices in the subordinated bond market in recent weeks to buy back or exchange this type of debt at heavily discounted prices to boost the quality of their balance sheets.

Standard Chartered <2888.HK> is offering to exchange a 675 million pound ($1 billion) undated Upper Tier 2 bond, callable in 2020, into new sterling-denominated senior fixed rated notes maturing in 2014, the lender said in a statement.

The Asia-focused bank is also offering to buy back $630.5 million worth of Lower Tier 2 bonds which mature in May 2031.

Senior bonds are the highest ranking debt in a bank's capital structure. Lower Tier 2 bonds rank just above Upper Tier 2, followed by lowest-ranked Tier 1, which has equity-like features.

Lloyds said on Thursday that investors have so far taken up over 65 percent of its offer to swap up to 7.5 billion pounds of subordinated bonds for higher quality debt.

Standard Chartered saw take-up of between 72.5 percent and 85.6 percent for an offer in December to buy back up to $1.3 billion of Upper Tier 2 bonds.

The deadline for Standard Chartered's latest exchange and buyback offer is April 21.

JP Morgan, Standard Chartered Bank and UBS are the dealer managers.

($1=.6702 pounds)

(Reporting by Natalie Harrison; Editing by Greg Mahlich)