UK’s ‘KfW’ to be major capital markets player

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By Burhan Khadbai
04 Mar 2021

Senior market participants welcomed the announcement of the UK Infrastructure Bank’s creation in this week’s Budget speech. While it is unlikely to tap capital markets in the near future, bankers hope the bank will evolve into a major government agency borrower that prints socially responsible bonds to help in the UK’s goal to reach net zero carbon emissions by 2050.

The bank will launch in the spring with a set of investment principles. Then, starting in the summer, it will offer local authorities loans at 60bp over Gilts to fund “high value and strategic projects” of at least £5m ($6.95m).

The government wants the Infrastructure Bank to become a ...

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