The FINANCIAL -- Barclays PLC has on November 6 successfully priced and issued a 0.625% €500m green bond.
This is a first for the UK market, as it represents the first green bond issued by a UK bank, using UK assets. The transaction was well received, attracting a final order book of €1.85bn.
Barclays will allocate the proceeds from this MREL eligible senior unsecured green bond issuance to the financing and refinancing of those Barclays residential mortgages on properties situated in England and Wales which are in the top 15% of the lowest carbon intensive buildings in these countries, based on estimated energy efficiency. Barclays was able to identify these properties thanks to the publication of Energy Performance Certificate (EPC) data by the UK government in bulk form earlier this year.
This issuance has received pre-issuance certification from the Climate Bonds Initiative. The Climate Bonds Certification Scheme allows investors, governments and other stakeholders to prioritise ‘low carbon and climate resilient’ investments, with confidence that the funds are being used to deliver these outcomes, according to Barclays.
Commenting on the issuance, Tushar Morzaria, Group Finance Director, Barclays, said:
“This issuance is an exciting step and complements Barclays’ existing involvement in the well-established green bond market. It will help us diversify our investor base, attracting interest from the growing group of environmental, social and governance (ESG) investors. Today’s announcement also reflects the efforts of our Green Banking Council, which is committed to the development of innovative products and services that support our clients and customers in their transition towards a low carbon and sustainable future.”
Green bonds are fixed income securities, designed to raise finance for assets that have positive environmental and climate benefits. The market has grown significantly and, according to the Climate Bonds Initiative, $93.6bn equivalent has been issued across a number of different companies and sectors in 2017.
Sean Kidney, Founder and CEO of Climate Bonds Initiative, said:
“Barclays has taken a lead among UK banks and FTSE 100 companies with this innovative certified green bond, that is an example of international best practice standards. The UK green bond market has been slow to develop, lagging many G20 and EU nations. This new Barclays green bond should trigger more global banks and FTSE companies to act and initiate their own green bond programs into 2018.”
Today’s announcement reinforces Barclays' support for, and participation in, the transition to a sustainable and low carbon global economy, following the publication of Barclays’ Green Bond Framework in September 2017.
Barclays remains committed to contributing to the growth of the green bond market. Not only is Barclays a signatory to the Green Bond Principles, it is an active lead manager of green bond issuances across jurisdictions, issuers and currencies within our investment bank and has also targeted a green bond investment of £2bn in its Liquidity Portfolio.
Claire Perry MP, Minister of State for Climate Change and Industry, said:
“The UK has demonstrated that tackling climate change and building a strong economy, can, and should, go hand in hand. The transition to a clean, low carbon economy presents a multi-billion pound investment opportunity and we want UK businesses to take full advantage of it.
“The Government recognises the potential for the UK to cement its position as a global hub for investment in clean growth, and this is why we set up the Green Finance Taskforce with Barclays as a member. Today’s announcement is an exciting moment for the UK market in demonstrating global leadership in the green finance sector and it’s great to see the first green bond for the UK market, using UK assets.”