Closing of Green Tier 2 Bond

Summary by AI BETAClose X

Paragon Banking Group PLC has successfully issued £200 million of Green Tier 2 Bonds, upsized from an initial £175 million due to strong investor demand which resulted in a 2.8x oversubscribed orderbook. These bonds carry a 6.5% coupon with a September 2036 maturity, priced at 205 basis points above the UK five-year gilt, representing the tightest reset spread for a sub-benchmark sterling Tier 2 issue. This issuance, structured as a green bond, will support the funding of low carbon emission residential properties and motor vehicles, further optimising the Group's capital structure and comparing favourably to the 396 basis point spread on the replaced Tier 2 instrument.

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Paragon Banking Group PLC
21 July 2026
 

RNS ANNOUNCEMENT

PARAGON BANKING GROUP PLC
Closing of Green Tier 2 Bond

 

Paragon Banking Group today announces the successful issuance of £200 million of Green Tier 2 Bonds. The bonds have a coupon of 6.5% for a maturity date in September 2036 and were priced 205 basis points above the UK five-year gilt. This represents the tightest reset spread for any sub-benchmark sterling Tier 2 issue.

The strong demand allowed the Group to upsize the transaction from an initial size of £175 million and the final orderbook was 2.8x oversubscribed.

Nigel Terrington, Chief Executive, said: "This Tier 2 issuance builds on the successful completion of our inaugural AT1 transaction in February 2026, further optimising the Group's capital structure to support future growth and returns.

Structuring the Tier 2 transaction as a green bond supports our funding of low carbon emission residential properties and motor vehicles, which is at the heart of our sustainability programme.

The strength of investor demand enabled us to increase the size of the transaction and the 205 basis point spread to gilts compares very favourably to the 396 basis point spread on the Tier 2 instrument the issue replaces."

 

For further information, please contact:

Paragon Banking Group PLC                             Headland
Richard Woodman, Chief Financial Officer           Charlie Twigg                                                       
Tel: 0121 712 2505                                                Paragon@headlandconsultancy.com
                                                                                 Tel: 020 3805 4822

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