Kensington Completes £ 750million Green Bond Securitization

Kensington Mortgages has finalized a green bond securitization worth £ 750million, which the specialist lender says will help ‘get borrowers to buy energy efficient properties or renovate existing buildings’ .

It says the deal is a lender’s first green bond in the UK asset-backed securities market, making the company the third issuer in Europe to issue such a bond.

Kensington said the oversubscribed deal attracted 23 investors to three loan tranches at a total cost of 70 basis points in the UK residential mortgage-backed securities market.

The term of the bond is just over four and a half years and covers UK residential owner-occupied and rental mortgages.

He adds that the deal has been increased by £ 480million due to investor demand.

The move follows the company’s sale of a £ 472million social bond to investors in February. The company says it has issued £ 13bn of residential mortgage-backed securities to investors since 2015.

Kensington sells mortgages to the self-employed, people with multiple incomes and those over 55.

The company said it would use the funds generated from the sale to “develop new green products to incent borrowers to buy energy efficient properties or renovate existing buildings to improve their environmental performance.”

The group adds that under its guidelines, “the minimum standard required for a property to be designated as an eligible green project is an energy performance certificate rating ‘B’, which represents an emissions intensity within 15 % of the largest residential buildings in England and Wales “.

Alex Maddox, Head of Capital Markets and Digital at Kensington Mortgages, says: “The majority of UK housing stock is energy inefficient and is responsible for a fifth, or 21%, of all of the Kingdom’s carbon emissions. -United. Improving the efficiency of our existing building stock is one of the best ways to help the UK transition to a low carbon economy. “

Maddox adds: “Kensington sees the environmental, social and governance aspects [ESG] key factors in its long-term performance and, therefore, we integrate ESG into our business strategy. We were the first specialist lender to publicly publish corporate ESG objectives in August 2020.

“As part of our ESG objectives to address environmental and social risks, we have integrated ESG into our lending strategy, providing both green loans and loans to viable borrowers who are underserved by street banks, showing our commitment to accelerate progress towards a better, cleaner planet.

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