Bond buyers give Britain some green advertising

2 minute read

A farmer holds a bundle of paddy seeds at a rice field in Cianjur, West Java province June 12, 2014.

LONDON, Sept 21 (Reuters Breakingviews) - The UK is burnishing its help for the planet ahead of the upcoming COP26 climate summit in Glasgow. The day after Prime Minister Boris Johnson pressed leaders to deliver on their commitments for a global climate fund read more , investors placed orders worth 100 billion pounds for the country’s inaugural 10 billion pound green bond.

Green bonds help borrowers fund investments in wind farms and the like. Yet issuing such a security does not make a country any more virtuous than if it funded those projects with ordinary debt. Still, investors love them. Britain priced the bonds, which mature in 2033, at a yield of 0.87%. That’s up to 3 basis points lower than the return on equivalent conventional gilts, IFR reckons . A saving of perhaps 3 million pounds a year helps cover the cost of setting up and running a green bond programme. Yet everybody is jumping on board: the European Union could issue 250 billion euros of the securities in coming years. As the market grows, the “greenium” may shrink. (By Neil Unmack)

On Twitter

Capital Calls - More concise insights on global finance:

Shell’s U.S. exit gives investors a sugar rush read more

U.S. air reopening better late than never read more

Vaccines for kids could help labor read more

British Airways crosses recovery fingers tighter read more

Beijing steers around Biden’s nuclear subs

Editing by Peter Thal Larsen and Karen Kwok

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

Sign up for a free trial of our full service at and follow us on Twitter @Breakingviews and at All opinions expressed are those of the authors.

More from Reuters