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UK debt office urged to launch green gilts with 10-12 year maturity

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By Reuters
UK debt office urged to launch green gilts with 10-12 year maturity
UK debt office urged to launch green gilts with 10-12 year maturity   -   Copyright  Thomson Reuters 2021

LONDON – Investors and dealers recommended that Britain’s debt office should put a 10-12 year maturity on its first green government bond sale next month with 2033 the preferred maturity year, the Debt Management Office said on Tuesday.

A planned second sale in October was recommended to have a maturity of around 30 years with 2053 the preferred option, the DMO said on Tuesday.

Britain’s government plans to issue at least 15 billion pounds ($20.6 billion) of new debt this financial year which is designed to tap into investor demand for bonds to fund environmental investments.

Last year Germany launched green bonds which offered a lower interest rate than standard debt.

The DMO also said it planned to hold 20 gilt auctions in the October-to-December period, three of them of index-linked bonds.

Investors and brokers were split over the merits of selling an ultra-long index-linked bond with a maturity of around 50 years, it said.

The DMO is due to announce details of its bond sales between October and December at 0630 GMT on Aug. 31.

($1 = 0.7283 pounds)