Closing of Green Tier 2 Bond
Paragon successfully issued £200m Green Tier 2 Bonds at 6.5% coupon maturing September 2036.
- Green Tier 2 Bonds issued £200 million
- Coupon 6.5%
- Maturity date September 2036
- Spread to gilts 205 basis points
- Orderbook oversubscription 2.8x
- Initial size £175 million
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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."
Cleaned text: letterheads, contacts and legal notices removed. View the original announcement ↗ · Company filings. Not investment advice.