- £10bn raised in UK Government’s first ever green gilt issuance
- Gilt admitted on the London Stock Exchange will be available on the Sustainable Bond Market
- Gilt will be available for clearing through LCH Ltd RepoClear
- The London Stock Exchange is a leading global hub for sustainable finance, with more than 300 bonds on the Sustainable Bond Market and 100+ equity issuers recognised with the Green Economy Mark
LSEG (London Stock Exchange Group) welcomes the UK Government’s inaugural green gilt, a £10bn, 12-year bond maturing on 31 July 2033. Part of a commitment to issue two green gilts in 2021, and at least £15bn in the 2021-22 financial year, the £10bn bond admitted today is the largest sovereign green bond to list on the London Stock Exchange.
The UK green gilt will be available for clearing through LCH Ltd RepoClear and is eligible as non-cash collateral for members placing margin with LCH Ltd and LCH SA. It is also expected to be eligible for inclusion in FTSE Russell’s World Government Bond Index (WGBI), which provides investors with exposure to the global sovereign fixed income market. The gilt has been admitted to the Sustainable Bond Market and is also available for trading on the London Stock Exchange’s Order Book for Retail Bonds.
Issued through the UK Debt Management Office (DMO), proceeds of the green gilt will go towards six key categories, including clean transportation; renewable energy and living; and natural resources. In addition to the environmental impacts, HM Treasury intends to report on the social co-benefits generated through investment of the bond proceeds.
John Glen, The Economic Secretary to the Treasury, said: “The launch of the UK’s first green gilt is a demonstration of our commitment to tackling environmental challenges and the vital role that green finance plays in this fight.
“As the largest green issuance by any country, with the largest ever order book for a sovereign green bond, it’s clear that investors want to play their part in helping us to build back better and create green jobs across the UK.”
Julia Hoggett, CEO, The London Stock Exchange plc, said: “We congratulate the UK Government on the successful listing of its debut green gilt on the London Stock Exchange. The Government’s green financing framework is a positive step towards building a sustainable net zero UK economy, and funding innovation and job creation across the UK’s growing green industries. Public capital markets are key to mobilising investment in sustainable activities that serve to mitigate social and environmental risk.”
Bruce Kellaway, Global Head of Securities and Collateral, LCH, said: “We are delighted that the UK Government’s inaugural green gilt is available for clearing through LCH Ltd RepoClear as well as being accepted as collateral across LCH Ltd and LCH SA. LCH’s green offering continues to expand as investors and issuers globally increasingly implement sustainable investment strategies.”
LSEG is committed to supporting the global drive to a net-zero economy across its businesses. In February 2021, LSEG became the first global exchange group to become a member of the United Nations Climate Change ‘Race to Zero’.
A leading global hub for sustainable finance, the London Stock Exchange has supported investors and issuers in the transition to a low-carbon and sustainable economy for over a decade. Its Sustainable Bond Market (SBM) is home to more than 300 green, social, and sustainability bonds, raising a combined £87bn. In 2021, the SBM expanded to include a dedicated segment for Transition Bonds, to help companies in carbon-intensive industries raise the finance required to transition to lower-carbon operating models. In equity markets, more than 100+ issuers have been recognised by London Stock Exchange’s Green Economy Mark, which identifies London-listed companies and funds that derive more than 50% of their revenues from green products and services.
