January 29, 2013 / 9:13 AM / 5 years ago

Books open on sale of UK 2044 gilt via syndication

LONDON, Jan 29 (Reuters) - Books opened on Britain’s sale of a 2044 conventional gilt at 0900 GMT on Tuesday, with initial price guidance set to give a yield of 9.25-9.75 basis points above that of the 2042 gilt, one of the bookrunners said.

Strategists expect the UK Debt Management Office to sell 3.5-4.0 billion pounds of the 2044 gilt, which is likely to become Britain’s next 30-year benchmark.

The syndication is the last one scheduled for a conventional gilt in the 2012/13 financial year, with a further sale of an index-linked gilt planned for the second half of February.

So far the DMO has raised 24.9 billion pounds of its 32.25 billion pound full-year syndication target.

J.P. Morgan, HSBC, Morgan Stanley and Royal Bank of Canada are joint bookrunners for Tuesday’s transaction, with all other gilt-edged market makers (GEMMs) acting as co-lead managers.

While Britain issues most of its debt through auctions, the DMO favours syndications as a way to achieve a better price for less liquid bonds, which are typically new or recently issued long-dated conventional or index-linked gilts.

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