(Bloomberg) -- Demand for the UK’s green bonds held up in a sale on Tuesday, after speculation that Prime Minister Rishi Sunak’s changes to climate policies might hurt investor interest.

The nation sold £3 billion ($3.7 billion) of bonds due 2033 as targeted, with investors offering to buy 2.56 times the amount of securities available. That’s a greater bid-to-cover ratio than two of the three last sales of the gilt.

The watered-down climate goals announced by Sunak last week push back the deadline to bar sales of new petrol cars as well as the rollout of cleaner heat for homes. It’s the latest in a string of similar policy adjustments that include expanding North Sea oil and gas production. 

Read: Fund Managers in ‘Complete Shock’ After Sunak’s Green Pivot

Ulf Erlandsson, chief executive officer of the Anthropocene Fixed Income Institute, said before the sale that some investors who bought into the bond at previous auctions were “unlikely” to come back given the government’s policy shift. He added he was “not sure how it will affect the demand dynamics.”

The difference between the yield at the weighted average accepted price and the lowest accepted price — known as the tail — was 1.3 basis points, up from just 0.2 in the previous sale. That suggests the UK did have to accept a concession in order to shift the securities.

Previous sales of this bond

  • May 24, 2023: Allotted amt of GBP3 billion and yield 4.239%
  • Feb. 1, 2023: Allotted amt of GBP3 billion and yield 3.428%
  • Nov. 9, 2022: Allotted amt of GBP2.75 billion and yield 3.712%
  • May 10, 2022: Allotted amt of GBP2.25 billion and yield 1.951%
  • Aug. 27, 2021: Allotted amt of GBP10 billion

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