CTAs keep buying Treasuries, gold longs face stop-loss risk: BofA
LONDON - The UK Debt Management Office (DMO) announced the successful auction of £1.75 billion in 4% Treasury Gilt 2063, as investor demand showed a coverage ratio of 2.80 times, reflecting robust interest in the long-term government securities.
The auction, which took place on Tuesday, resulted in competitive bids that exceeded the amount on offer by nearly threefold, reaching a total of £4.9 billion. The 4% Treasury Gilt 2063, identified by the ISIN Code GB00BMF9LF76, saw competitive bids above the lowest accepted price of £81.799 allotted in full, while those below were rejected. Bids accepted at the lowest price received 94.4444% of the bid amount.
The highest accepted price for the gilts was £81.967, corresponding to a yield of 5.068%, while the non-competitive allotment price, which is the rounded average accepted price, was set at £81.845 with a yield of 5.076%. The lowest accepted price corresponded to a yield of 5.079%, with a tail of 0.3 basis points, indicating a small difference between the average and lowest accepted yields.
In a further attempt to satisfy market demand, the DMO will offer an additional amount of up to £437.5 million of the same stock for purchase at the non-competitive allotment price to successful bidders, following the terms outlined in the Information Memorandum.
Stock allotted to members of CREST, the UK's securities settlement system, will be credited via member-to-member deliveries on the settlement date.
This financial activity is part of the UK government's ongoing efforts to manage the national debt by issuing gilts, which are UK government bonds, to investors. Gilts are a common investment vehicle for institutions and individuals seeking relatively secure assets.
The information for this article is based on a press release statement from the UK Debt Management Office.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.