January 29, 2013 / 12:47 PM / 5 years ago

UK sells 4 bln stg of 2044 gilt at yield of 3.4185 pct

LONDON, Jan 29 (Reuters) - Britain’s Debt Management Office said it had set the price of the 3.25 percent 2044 gilt sold via syndication on Tuesday at 96.795, equivalent to a yield of 3.4185 percent.

That is 9.25 basis points above the yield of the 2042 gilt , the current 30-year benchmark, suggesting investors were willing to pay prices at the top end of initial guidance.

The DMO confirmed that 4 billion pounds ($6.28 billion) of the 2044 bond had been sold.

One of the lead managers for the transaction said earlier on Tuesday that the syndication process attracted orders totalling around 9.6 billion pounds.

Strategists had expected the UK Debt Management Office to sell 3.5-4.0 billion pounds of the 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.

Before Tuesday’s syndication, the DMO had 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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