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LONDON - The UK Debt Management Office (DMO) successfully auctioned £1.25 billion of 4% Treasury Gilt 2063 on Monday, reflecting robust investor demand with bids totaling £4.39 billion, more than three times the amount offered.
The auction’s competitive bids were met with strong interest, as all bids at the lowest accepted price received 47% of the amount bid for. Higher bids were allotted in full, while those below the lowest accepted price were rejected. The highest accepted price was £79.067 with a corresponding yield of 5.277%, and the lowest accepted price was £78.967 with a yield of 5.285%. The non-competitive allotment price, which is the rounded average accepted price, was set at £79.013 with a yield of 5.281%.
The DMO also disclosed that an additional amount of the gilt totaling up to £312.5 million will be available for purchase at the non-competitive allotment price for successful bidders, as per the terms outlined in the Information Memorandum.
Gilt-edged market makers were allotted £187.5 million, while no allotments were made to other non-competitive bids. The total amount of competitive bids accepted was £1.0625 billion.
The DMO confirmed that the stock allotted to members of the electronic settlement system CREST will be credited to their accounts on the settlement date.
The auction results indicate a healthy appetite for UK government securities, with the coverage ratio, the number of times the auction was oversubscribed, at 3.51. This auction is part of the government’s ongoing debt management strategy.
This report is based on a press release statement from the UK Debt Management Office.
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