Starling Bank secures £150M Tier 2 bond with record investor demand

Starling Group Holdings Limited has secured record pricing for its first £150 million Tier 2 bond. The issuance drew strong interest from major UK, European, and international investors, with demand exceeding £400 million at its peak. The bond sale was significantly oversubscribed, with international investors seeking more than 2.5 times the available notes. It carries an investment-grade Baa3 rating from Moody’s and was priced at a spread of 223.7 basis points over UK Gilts. The bond offers a fixed rate of 6.625%, includes a call option in 2031, and matures in 2036.

Moody’s also assigned Baa2 long-term deposit and issuer ratings to Starling Bank Limited, along with a Baa3 issuer rating to Starling Group Holdings Limited. Each rating comes with a stable outlook. NatWest and Morgan Stanley acted as Joint Lead Managers for the transaction.

Group Chief Financial Officer Declan Ferguson stated the issuance optimises the company’s cost of capital and diversifies its regulatory capital base. Chief Executive Officer Raman Bhatia highlighted the strong investor response as a sign of confidence in Starling’s long-term potential. The news follows the bank’s full-year results, which reported a fifth consecutive year of profitability, with £217.1 million in profit before tax for the year ending 31 March 2026. The bond’s pricing and strong demand reflect investor trust in Starling’s financial position. The proceeds will support the company’s capital structure and growth plans. Moody’s stable outlook ratings further reinforce the bank’s creditworthiness.