LONDON - The UK Debt Management Office (DMO) has successfully completed the sale of £350 million in index-linked gilts, due in 2073, with a real yield of 1.179%. The sale, conducted by tender, saw competitive bids totaling £949 million, indicating a subscription rate 2.71 times the amount allotted.
The 0 1/8% Index-linked Treasury Gilt, with an ISIN code of GB00BM8Z2W66, had a striking price set at £61.265, and an inflation-adjusted clean price of £77.284572. The DMO reported that all accepted bids at the striking price received an allotment of 76.0000% of the bid amount, while bids above the striking price were allotted in full. Any bids below were rejected.
Following the sale, the total nominal amount in issue for this particular gilt will increase to £5,372.850 million as of Friday. The DMO did not retain a residual amount from this tender.
This transaction is part of the UK government's ongoing debt management operations, aimed at financing government borrowing by issuing gilts to investors, which include pension funds, insurance companies, and other institutional investors.
The DMO's announcement of the tender results is based on a press release statement and provides investors with the latest information on the government's debt issuance activities. It is important for market participants to have access to such data to make informed decisions regarding government securities.
The index-linked gilt sale is a component of the broader strategy employed by the DMO to manage the national debt effectively, ensuring that funding needs are met while minimizing the cost to the taxpayer over the long term. These index-linked gilts provide investors with protection against inflation, as the principal and interest payments are adjusted to reflect changes in the consumer price index.
The DMO's issuance of index-linked gilts is closely watched by the market, as it offers insights into investor appetite for UK government debt and the government's cost of borrowing.
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