Paragon Banking Group has issued £150m of tier 2 green bonds.

The subordinated bonds were issued at a coupon of 4.375 per cent.

The bond proceeds will be used to fund green loans to landlords in England and Wales who wish to improve the energy efficiency of their rental portfolio.

At the start of February this year, Paragon launched four green further advance products for landlords who had been accepted for the Green Homes Grant.

Paragon chief executive Nigel Terrington says: ““This green bond demonstrates our commitment to support more landlords improve the energy performance of their rental properties, reducing carbon emissions as well as energy bills for tenants.

“Under the government’s ambitious plans, 2.9 million rental homes will need to improve energy performance over the next few years. Government, landlords and lenders should work together to meet this target, and green finance will play a critical role.

“At Paragon, sustainability influences every aspect of our business. We’re delighted to have received overwhelming support from the investment community on our plans to put sustainable lending at the heart of our strategy.”