507A7B86-7507-41CB-8F0A-9AD191E32DA5 513D0B9D-7474-4D61-863F-70F1B3696FB7 60F0322F-B5F4-4A4F-B505-A8773B90F3B9 Comments A5B32EC7-3D41-482F-8D63-40B8CC4B0807 86DDA3D7-F193-4FF9-BE89-5AF7F4C92A8F 1FAE3C2F-8600-47BE-8D04-C46DC4FFD6B0 47ACF625-4F24-4613-9C4E-5E81CABE1FBA FB57FEB0-874D-4585-BF2D-FAAE8EBC17F6 AD97905C-02C9-4A07-9EEA-DA1F36CC7FA8 8727CDE7-CFD1-40EA-A8AF-256882E677CA B052573C-CEE4-4CD1-B86F-C9CB0202622C 1FDA88B9-6396-4BE0-B01D-4DC4FA38A632 6CD0F19E-3C61-44FC-9723-C7737416CD7C 62D3F811-1C6C-477C-972B-FE52539070FC•• 1FAE3C2F-8600-47BE-8D04-C46DC4FFD6B0 47ACF625-4F24-4613-9C4E-5E81CABE1FBA FB57FEB0-874D-4585-BF2D-FAAE8EBC17F6 EF459BAF-1347-4C71-9008-BDB3136FCCE8 3BB10396-3999-4821-82D8-3568DE598D06 F3D95CB7-5CF3-4B27-8B55-AA78EDF89759 63057605-E453-4FDE-89BC-ABD2BC6600E2 Views 6CD0F19E-3C61-44FC-9723-C7737416CD7C

Cookie settings

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer. Cookie policy

    image image

    Second issuance of green gilts

    Second issuance of green gilts

    22 October 2021 Responsible investment, Solutions

    To reach its target of net zero emissions by 2050, the UK government has published a 10-point ‘green industrial revolution’ plan1. As part of this, the government raised c.£6bn via a syndication of the second green gilt on 21 October 2021, in addition to the c.£10bn raised from the inaugural green gilt on 21 September 2021.

    The green financing framework, published on 30 June 2021, details how the proceeds from green gilt issuance will be used, monitored and reported.

    Results of the green gilt syndications

    The table below sets out high-level information in relation to the sale of the second green gilt, alongside the sale of the first green gilt for reference.

    Issuance date 21 September 2021 21 October 2021
    Gilt name 0⅞% Green Gilt 2033 1½% Green Gilt 2053
    Amount sold (£bn value) c.£10bn  c.£6bn
    Investor demand (£bn value) c.£100bn c.£74bn
    Issue price / yield £100.033p / 0.8721% £102.214p / 1.4133%
    Yield relative to nearest gilt  UKT 4.25% 2032 +7.5bp

    UKT 3.75% 2052 -1bp

    The new 2053 green gilt was issued with a 1bp lower yield than the reference 2052 non-green gilt, however the latter’s higher coupon means that this difference in yield is slightly misleading. Adjusting for the coupon difference, the market estimated that c.1bp above the reference 2052 non-green gilt would have been an approximate fair value if the green gilt was issued at around the same price as a non-green gilt. As a result, the green gilt was issued at a c.2bp lower yield (premium or 'greenium') relative to this fair value level.

    This is slightly higher than the ‘greenium’ of the first green gilt (0⅞% Green Gilt 2033), which was issued at a c.1.5bp lower yield or ‘greenium’ relative to fair value. Trades executed since in respect of both gilts suggest the ‘greenium’ has widened, with initial trading of the new 2053 green gilt indicating that the ‘greenium’ has widened by c.2.25bp to 4.25bp in the secondary market.

    For more information on how proceeds will be used please refer to our piece: First issuance of green gilts

     


    1https://www.gov.uk/government/publications/the-ten-point-plan-for-a-green-industrial-revolution/title

    Back to top