UK’s second green gilt secures over £70bn of investor demand
More than £74bn has been offered to the government in demand for its second green government bond which had its order book gates thrown open today.
It comes a month after its first green gilt which attracted a record £100bn in demand from hungry investors.
The appetite for environment, social and governance (ESG) focussed loans has soared in recent months, particularly with the UN’s flagship climate conference COP26 looming.
Bookrunners have forecast that the government will sell £6bn of the new July 2053 gilt, compared with the £10bn of the July 2033 green gilt which became the largest green sovereign bond on record last month.
Proceeds from the sale, which make up a small portion of the £253bn of bond issuance the government has planned for this financial year, will be ring-fenced for renewables projects such as offshore wind and zero-emission buses.
The UK had been reluctant to embark on green gilts for some time, as Germany, Italy and Spain steamed ahead, for fear it would fail to pull in enough investors.
However, the latest green gilt secured over £48bn of demand in the first half an hour of it opening its order books, according to Reuters.