Barclays has announced that it successfully closed a £400m ‘Green Bond’ issue (the 2020 Green Bond) on 27 October – the second bond it has issued with a specific intention to support climate-related products and initiatives. The 2020 Green Bond, which matures in 2026, attracted strong institutional investor interest with orders amounting to more than £2bn (an oversubscription of five times). It will offer a yield of 1.70%.
The funds raised will be allocated towards the financing and/or re-financing of mortgages on energy efficient residential properties* in England and Wales originated within the last three years. More than half the funds raised will be allocated to refinance Barclays’ Green Home Mortgage Product+ mortgages, which are offered to customers at a discount provided their property meets certain energy efficiency thresholds.
Barclays has been a longstanding participant in the Green Bonds market. In 2015 the bank announced one of the largest Green Bond investment commitments globally – up to £2bn – and in 2017 issued its inaugural Green Bond, the first from a UK bank used to fund domestic residential mortgage assets.
In 2019 Barclays increased its Green Bond investment commitment, signalling an intention to invest up to £4bn in Green Bonds over time. It also committed to deliver £100bn of green financing by 2030. Since 2015 Barclays has also been a very active underwriter of ESG Bonds for clients through its Investment Bank, underwriting more than US$40bn of deals.
The 2020 Green Bond has received Climate Bonds Initiative certification and, in addition, Barclays has a second party opinion on its 2019 Green Bond Framework from the Carbon Trust as an assurance provider, confirming that the framework meets the International Capital Market Association Green Bond Principles 2018.
Sasha Wiggins, Group Head of Public Policy and Corporate Responsibility at Barclays, said:
“Barclays has been a leading participant in the Green Bonds market for over five years and the strong demand for our 2020 Green Bond underlines the continuing high levels of interest in securities that are used to fund climate-friendly activities. The funds we have raised today will further support the development of our Green Mortgages portfolio – notably the Green Home Mortgage Product, which has had the fastest uptake of any recent Barclays Mortgage product since its launch in 2018.
“Barclays is committed to aligning its financed emissions with the goals of the Paris Agreement, and has set an ambition to reduce those emissions to net-zero by 2050. We are accelerating the transition to a low-carbon economy through our target of providing £100bn of green financing by 2030, and by investing £175m over five years in innovative green companies.”