ÆLFR / EDREX ('King Alfred') and, on the reverse, LVNDONIA (monogram for 'London').
The 'monogram' type of coin
The large monogram on this coin spells out the name LVNDONIA. In the 8th and 9th centuries it was very unusual for coins to specify the place in which they were made.
This famous London monogram type was issued in the early 880s. It celebrates Alfred's assumption of control of Mercia after the demise of the last Mercian king, Ceolwulf II (874-879). Special named issues were also produced at two other Mercian towns, Oxford and Gloucester, stamping Alfred’s authority over them.
Alfred rebuilds London
Historians used to think that the Vikings were in control of London during most of the 870s and 880s. However, the coins provide decisive evidence that it remained a Mercian city and a flourishing emporium throughout.
In 886, Alfred restored and rebuilt parts of London, moving the focus of commercial and other activity into the refortified Roman city. This was part of his well-known policy of building a network of fortified boroughs to defend the kingdom against the threat of the Viking armies.
As well as consolidating the country’s fortifications, Alfred also embarked on a parallel reform of the currency system. He established a series of new mints around the country so eventually every borough was entitled to have its own mint to help pay for the costs of running and defending the borough.