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11 July 2017
SYNDICATED RE-OPENING OF £2.5 BILLION NOMINAL OF 0⅛% INDEX-LINKED TREASURY GILT 2056: RESULT
The United Kingdom Debt Management Office (DMO) announces that the syndicated re-opening of £2.5 billion (nominal) of 0⅛% Index-linked Treasury Gilt 2056 has been priced at £177.716 per £100 nominal, equating to a gross real redemption yield of -1.361%. The transaction will settle, and the second tranche of this gilt will be issued, on 12 July 2017, at which date the gilt will have £4.75 billion (nominal) in issue.
Proceeds from today’s transaction are expected to amount to approximately £4.5 billion (cash1). Proceeds from the 2017-18 syndication programme to-date are £9.6 billion.
The offering was priced at a yield spread of 2.0 basis points (bps) above the yield on 0⅛% Index-linked Treasury Gilt 2058, which represented the tight end of the published price guidance. The UK domestic market provided the predominant support for the issue, taking around 89% of the allocation.
This was the second transaction of the DMO’s 2017-18 syndication programme, which was planned to raise a minimum of £21.5 billion (£9.5 billion of long conventional gilts in two transactions and £12.0 billion of index-linked gilts in three transactions).
The syndication programme and the unallocated issuance amount
Given the strength and quality of demand at this transaction, the DMO has decided to move £0.5 billion (cash) from the unallocated issuance amount to the index-linked syndication programme in 2017-18 (increasing the minimum size of that programme to £12.5 billion and the minimum size of the overall syndication programme to £22.0 billion). The size of the remaining unallocated amount has accordingly been reduced to £5.5 billion.
1 Figures in this Press Notice are in cash terms unless indicated otherwise.