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11 July 2018
SYNDICATED LAUNCH OF £3.25 BILLION NOMINAL OF 0⅛% INDEX-LINKED TREASURY GILT 2041: RESULT
The United Kingdom Debt Management Office (DMO) announces that the syndicated launch of £3.25 billion (nominal) of 0⅛% Index-linked Treasury Gilt 2041 has been priced at £148.973 per £100 nominal, equating to a gross real redemption yield of -1.617%. The transaction will settle, and the first tranche of this gilt will be issued, on 12 July 2018.
Proceeds from today’s transaction are expected to amount to approximately £4.8 billion (cash1). This was the second transaction of the DMO’s 2018-19 syndication programme, which was planned to raise a minimum of £19.0 billion (£10.5 billion of long conventional gilts in two transactions and £8.5 billion of index-linked gilts in two transactions). Following today’s operation syndication proceeds in 2018-19 will amount to £10.7 billion.
The offering was priced at a yield spread of 1.5 basis points (bps) above the real yield on 0⅝% Index-linked Treasury Gilt 2040, which represented the tight end of the published price guidance. The UK domestic market provided the predominant support for the issue, taking around 92% of the allocation.
The syndication programme and the unallocated issuance amount
Given the strength and quality of core demand at this transaction, the DMO has decided to increase the size of the syndication from the initially planned amount. Accordingly the DMO has moved £0.6 billion (cash) from the unallocated issuance amount to the index-linked gilt syndication programme.
As a result of the transfer of £0.6 billion from the unallocated portion of issuance to the index-linked syndication programme announced today, the minimum size of that programme has been increased to to £9.1 billion and the minimum size of the overall syndication programme to £19.6 billion. The size of the remaining unallocated amount has been reduced to £5.1 billion.
This press notice will be appearing on the DMO’s website at: www.dmo.gov.uk
1 Figures in this Press Notice are in cash terms unless indicated otherwise.