Starling secures £150m in landmark Tier 2 bond debut for growth

Starling Group Holdings Limited has completed its debut £150m Tier 2 bond sale. The deal marks the first rated public issuance by a European neobank. Moody’s assigned a Baa3 rating to the bond, which was heavily oversubscribed by investors. The bond carries a fixed rate of 6.625% and includes a call option in 2031, with maturity set for 2036. Demand from international investors reached over £400m, more than 2.5 times the amount on offer. NatWest and Morgan Stanley acted as Joint Lead Managers for the sale.

Proceeds will fund general corporate purposes, including investment in Engine by Starling and potential acquisitions. After the sale, Starling will retain a capital surplus exceeding £600m. The transaction also achieved record pricing for a Tier 2 issuance under £200m.

Moody’s has given Starling Bank Limited a Baa2 long-term deposit and issuer rating. Its parent company, Starling Group Holdings Limited, received a Baa3 issuer rating. The baseline credit assessment highlighted strong capital, liquidity, a stable deposit base, and consistent profitability.

Starling recently reported its fifth consecutive year of profit, with £217.1m in pre-tax earnings for the year ending 31 March 2026. The bond sale strengthens Starling’s financial position and supports its growth plans. The oversubscription and tight pricing reflect strong investor confidence. The funds will help expand the bank’s operations and explore new opportunities.