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UK to sell 4.0 bln stg of 2044 gilt via syndication
January 29, 2013 / 10:38 AM / 5 years ago

UK to sell 4.0 bln stg of 2044 gilt via syndication

LONDON, Jan 29 (Reuters) - Britain will sell 4.0 billion pounds ($6.28 billion) of the 3.25 percent 2044 gilt via syndication after receiving orders of around 9.6 billion pounds, one of the bookrunners on the transaction said on Tuesday.

The gilt will be priced to yield 9.25 basis points more than the 2042 gilt, the current 30-year benchmark, suggesting investors are willing to pay prices at the top end of initial guidance.

Order books closed at 1000 GMT after opening at 0900 GMT, and final pricing details are expected later on Tuesday.

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.

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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